By - August 5, 2025
Categories: Bookkeeping, Financial Reports, Financial Statements, Taxes
How small businesses can benefit from investing in innovation under new tax provisions.
If you’re improving how your shop runs, whether that’s testing new tools, tweaking your internal systems, or upgrading your tech, you could be sitting on a hidden tax break.
Thanks to a recent change in tax law, immediate R&D expensing is now officially back on the table. That means qualifying research and development costs can be deducted immediately…no more spreading them out over several years.
It’s a smart move that puts more money back in your pocket now, helping you invest in what matters most: growing your shop.
This recent change is a big win for small business owners, and it’s especially important if you’re looking for ways to reduce your tax liability while continuing to grow and invest in your shop.
Let’s break down what this new law means, how it benefits you, and where to go for expert help in navigating R&D tax credits.
What Changed with the R&D Expensing Law?
Previously, businesses had to capitalize and amortize research and development (R&D) expenses over five years. That meant waiting to fully realize the financial benefits of your investments.
But now, thanks to a major update, you can expense those R&D costs immediately.
This change is officially part of the “Big Beautiful Bill” tax package, and it means you can now deduct 100% of qualifying R&D costs in the year they’re incurred. That’s money back in your pocket right away.
Why This Matters for Auto Repair Shops
You might be thinking, “We’re not inventing electric engines here. Do we really qualify for R&D credits?”
Actually, yes.
The R&D tax credit is broader than many shop owners realize. You may be eligible if you’re:
- Developing or customizing shop management software
- Testing new diagnostic tools or procedures
- Improving efficiency in your internal systems or processes
- Creating better customer service technology or integrations
Even if you’ve never claimed R&D credits before, the new law makes it worth revisiting. Immediate expensing means you can invest in your shop now and reap the tax benefits this year.
How This Supports Business Growth
The new provisions give business owners like you the flexibility to innovate without financial hesitation (plus they come with some great tax savings).
- More cash flow – Use your tax savings to hire, upgrade equipment, or expand services
- Faster return on investment – Immediate deductions help offset the cost of R&D now, not later
- Encouragement to innovate – Take more risks with new tools, tech, and systems that streamline your operations
In short: it’s a great time to get creative in your business.
Partnering with Experts to Maximize R&D Credits
Navigating the R&D tax credit can get tricky, and not all expenses qualify. That’s why we’ve joined forces with a trusted partner that specializes in helping small businesses make the most of these opportunities.
They’ll walk you through:
- What qualifies as R&D in your specific business
- How to document eligible expenses properly
- How to file and claim credits accurately
At Three Rivers Bookkeeping, we’ll work hand-in-hand with them to ensure your books are audit-ready and your savings are maximized.
Don’t Miss This Opportunity
If you’ve been considering investing in technology, staff training, or internal system upgrades, this is the time to do it. The new Immediate R&D Expensing law is designed to reward businesses that keep pushing forward, and we’re here to help you take full advantage.
Want to learn how this applies to your shop?
Let’s chat. We’ll walk you through your options and introduce you to our expert R&D tax credit partner.
