Is it more tax-efficient to expense or capitalize software development costs for my small business?

I am a small business owner, and I am spending about $25,000 this year for custom software development. I’ve never done this before, and I don’t know whether it is better for tax purposes to expense this cost or capitalize it?

It is a judgment call on your part. If you income this year is going to be small and you expect future years to be big, it would be better to depreciate or amortize the asset against income at a high tax rate. If you feel you need the write-off now, you can take it if you want to.

Originally posted 2016-02-06 01:38:37.