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Multiple Tax Entities: The Pros and Cons for Construction

Posted by Concannon Miller on Thu, Oct 18, 2018

It might be advantageous from a tax standpoint to run a business through multiple entities. For example, a construction company might form a separate company to own and lease its trucks and equipment back to its related entities. Or a corporation might transfer appreciated property to an affiliated corporation in order to limit risk in case it is sued.

However, the IRS may look twice at an operation if it includes multiple business entities -- especially if recordkeeping and filing requirements aren't handled properly. One construction firm in Georgia discovered that lesson the hard way when it took deductions that actually belonged to one of its corporate affiliates.

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Topics: Construction & Real Estate Development

Thinking of Buying Another Construction Firm? What to Consider

Posted by Concannon Miller on Thu, Sep 20, 2018

Buying another construction firm can be an attractive way to grow your company's revenue base. A merger or an acquisition can allow you to: 

  • Add a new subcontracting specialty,
  • Acquire an experienced labor force to reach new markets, and
  • Deepen your penetration into the market your firm already serves.
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Topics: Business Valuation, Construction & Real Estate Development

Tax Reform Expands Simpler Accounting Method for More Small Businesses

Posted by Concannon Miller on Thu, Sep 6, 2018

Thanks to changes included in the Tax Cuts and Jobs Act, many more businesses can now use the simpler and more-flexible cash method of accounting for federal income tax purposes. The new law also includes some other tax accounting changes that are good news for small businesses. Like many TCJA changes that apply to businesses, these provisions are permanent. Here's what you need to know.

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Topics: Construction & Real Estate Development, 2017 Federal Tax Reform

New Guidance on Taking Advantage of Expanded Bonus Depreciation

Posted by Concannon Miller on Tue, Aug 21, 2018

Federal tax reform through the Tax Cuts and Jobs Act significantly expands bonus depreciation under Section 168(k) of the Internal Revenue Code for both regular tax and alternative minimum tax purposes. Now, the IRS has released proposed regulations that clarify the requirements that businesses must satisfy to claim bonus depreciation deductions.

Although the regs are only proposed at this point, the IRS will allow taxpayers to rely on them for property placed in service after September 27, 2017, for tax years ending on or after September 28, 2017.

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Topics: McDonald's management, Business tax planning, Manufacturing, Construction & Real Estate Development, 2017 Federal Tax Reform

Construction Companies: Work with an Industry Specialist for Most Savings (Video)

Posted by Andy Kahn on Thu, Jul 19, 2018

The tax laws and accounting policies for construction and real estate development companies are unique and particular. If your accountant doesn’t have the industry experience, you’re likely missing out on some significant tax savings.

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Topics: Construction & Real Estate Development

Construction Companies: Tips to Keep Cash Flow High During Busy Season

Posted by Concannon Miller on Thu, Jun 21, 2018

Everyone struggles to keep up when business really takes off. Projects come all at once. You may hire additional field workers to meet the demand. Payroll is stretched because payments which come in on your new projects lag months behind the large sums you lay out weekly to pay your workers.

This type of project financing concern is not yours alone. All construction contractors face this type of project financing snafu to some degree. The basic problem is your firm gets paid months after you need the money to run your projects.

There is something you can do to counteract the project financing snafu. The following are four great ways your firm can keep your bank balances high during busy season.

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Topics: Construction & Real Estate Development

Tax Benefits for Developers: Cost Segregation Study (Video)

Posted by Andy Kahn on Thu, May 17, 2018

Did you incur costs during the building and construction or purchase of your facility? You can likely accelerate some deductions with a cost segregation study, an engineering-based analysis of the costs associated with the acquisition, construction, or renovation of a building.

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Topics: Construction & Real Estate Development

Construction Accounting 101: Top Deductions, Accounting Methods

Posted by Concannon Miller on Thu, Apr 19, 2018

The IRS continues to zero in on what it calls the "tax gap" — the amount between the taxes that are voluntarily paid and the amount the tax agency believes is actually due.

To this end, the IRS has issued a series of documents to provide better understanding of the tax code. One example is specifically directed at the construction industry.

The tax agency emphasizes instances where taxpayers failed to report, or under-reported, income from construction activities. This applies to individual workers as well as contractors and subcontractors. Following are the highlights:

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Topics: Construction & Real Estate Development

New Tax Reform Rules Include Big Benefits for Construction Companies

Posted by Andy Kahn on Tue, Mar 20, 2018

No matter how your construction or construction-related company is set up tax wise, the new federal tax reform rules should offer your company some significant tax benefits.

If you’re a C Corporation, the biggest benefit is the reduction of tax rates ranging from 15% to 35% to a flat 21% rate. The Corporate Alternative Minimum Tax also has been repealed.

If you’re the owner of pass-through entity – an S Corporation, partnership or sole proprietorship – there’s also a major new business deduction for you. It’s not as easy to understand, but in some cases may be more beneficial.

And while the new federal tax law includes many benefits for businesses, there are some losses as well. Read on to learn about the most significant changes.

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Topics: Construction & Real Estate Development, 2017 Federal Tax Reform

Residential and Commercial Landlords: The Key Tax Reform Changes

Posted by Concannon Miller on Thu, Mar 1, 2018

Do you own residential or commercial rental real estate? Federal tax reform through the Tax Cuts and Jobs Act (TCJA) brings several important changes that owners of rental properties should understand.

In general, rental property owners will enjoy lower ordinary income tax rates and other favorable changes to the tax brackets for 2018 through 2025. In addition, the new tax law retains the existing tax rates for long-term capital gains.

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Topics: Construction & Real Estate Development, 2017 Federal Tax Reform

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