Whether you license software in shrink wrap, on the Internet or embedded within a product, the Section 199 deduction provides software developers with an opportunity to reduce their tax rate. Our Deloitte Tax LLP professionals have helped many software developers to assess their opportunities for Section 199 and implement recurring compliance solutions.

This team includes specialists who understand the challenges that software developers face in qualifying for the Section 199 deduction. For example, identifying receipts associated with software embedded in a product or service can be challenging. And, software developers’ complex structures and business arrangements can complicate the calculation process.

Our consultation services address all aspects of the Section 199 deduction, including:

• Identifying and documenting qualifying revenue
• Assisting with prefiling agreements
• Analyzing partnerships, joint ventures and international structures, as well as buy-in payment arrangements
• Analyzing cost allocations
• Conducting scenario planning and validation
• Performing tax rate impact analysis
• Assisting with tax compliance and Internal Revenue Service exams

For more information, see the PDF attached below.