Section 174 was rewritten in the TCJA so that seemingly all R&D costs must now be amortized over 5 to 15 years versus immediately deducted as a business expense. Moreover, Section 174 explicitly notes that "any software [development] shall be treated as a research or experimental expenditure."
If you search around, there's a ton of hand-wringing around this situation. On the one hand, most people thought that this would be repealed by now... but it hasn't been. On the other hand, small dev shops are parsing Section 174, Section 41, and related CFRs looking for escape hatches. For example, there's a lot of focus on language indicating "for purposes of this section" that may indicate that one can opt for dev to be a normal expense and not fall under 174 purview.
For more info, see: - https://www.wsj.com/articles/small-businesses-face-big-tax-bills-from-research-deduction-change-a189b113 - https://www.law.cornell.edu/uscode/text/26/174 - https://www.journalofaccountancy.com/issues/2022/nov/amortizing-r-e-expenditures-under-tcja.html - https://news.ycombinator.com/item?id=34627712 - https://www.law.cornell.edu/cfr/text/26/1.174-3
