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.