As the year comes to a close, it’s time to think about year-end tax planning. Construction companies continue to face unique challenges in today’s marketplace, such as rising construction costs, bank financing and keeping up with the strong demand with a shortage of skilled workers, which is why it’s critical to make the right moves now to ensure your company’s future financial strength.
- Use this checklist for contractors as you work on your year-end tax planning:
- Review your current tax structure
- Determine your contractor status (employee vs. independent)
- Define your accounting method (accrual or cash)
- Create a strategic plan and project your income for 2015
- Know your tax rate
- Consider your financial impact on bank loans
- Defer your income
- Tax advantage of tax breaks before they expire, such as:
- Equipment and machinery purchases
- Bonus depreciation
- Energy-efficient processes/projects
- Research & experimentation tax credit (R&D)
- Retirement contribution
- Workforce development
- Plan for benefits, i.e. the Affordable Care Act and Medicare
- Watch for year-end changes
- Review and review some more, then submit
There are numerous ways to be strategic with your year-end tax planning. Your tax advisor can help you develop the best long-term strategy to optimize your construction company’s overall savings.
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