The Contractor’s Toolbox for Year-End Tax Planning

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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