Most of what you capitalized last year was deductible.
The tangible property regulations decide whether a dollar spent on an existing asset is an expense now or a capitalized cost recovered over decades. Registers get this wrong in volume, and the correction reaches back.
A capitalization policy is a contract cost policy too.
For a government contractor the question is not only when a deduction lands. What you capitalize changes the asset base, and the asset base drives the depreciation charged to your contracts.
A review that moves treatment on the tax side without reading the contract-cost consequence creates the same split this firm exists to prevent. We establish the contract side first.
Improvement, or not.
The unit of property is determined before anything is tested, because the wrong unit produces the wrong answer on every question that follows.
Each expenditure runs the improvement tests: betterment, restoration, and adaptation to a new or different use.
The safe harbors are applied where they fit, including routine maintenance, the small-taxpayer safe harbor, and de minimis expensing under a written policy.
Where prior treatment was wrong, the correction is an accounting-method change rather than an amended return, and the cumulative adjustment is computed and carried on Form 3115.
Partial-disposition opportunities are identified, so the remaining basis of a replaced component is written off rather than depreciated alongside its replacement.
You choose the delivery tier.
FactorTax delivers the analysis and the filing-ready documentation, built to withstand examination. Your tax provider implements it.
FactorTax delivers the study and implements it end to end, preparing and filing the accounting-method change and signing as practitioner of record under Treasury Circular 230.
Every engagement is a single flat fee, fixed in the engagement letter before work begins. No ranges, no hourly billing, and no fee that moves with the size of the result.