Your resource for timely tax updates and news.

Tax Court Sets Boundaries on Commuting Deductions

Although you usually can't deduct typical "commuting" expenses from home, you may qualify for a special exception if you're away working on temporary assignments. But the IRS and the U.S. Tax Court won't allow borderline deductions, as evidenced by one case involving a construction worker. "A taxpayer's costs of commuting between his or her [...]

IRS Increases Annual Gift Tax Exclusion for 2018

The IRS has announced that the annual gift tax exclusion is increasing next year due to inflation. After five years of being stuck at $14,000, the exclusion will be $15,000 per recipient for 2018 — its highest point ever. Section 529 Plans: Make Five Years of Gifts in a Year Normally, a gift made directly to [...]

How Much Will Social Security Recipients Collect Monthly in 2018?

Monthly Social Security and Supplemental Security Income (SSI) benefits for more than 66 million Americans will increase just 2.0% in 2018, the federal government recently announced. The 2.0% cost-of-living adjustment (COLA) will begin with benefits that more than 61 million Social Security beneficiaries will receive in January 2018. Increased payments to more than 8 million SSI [...]

Employers Affected by Recent Hurricanes Get a Valuable Tax Credit

A new law, signed by President Trump on September 29, 2017, provides various tax breaks for victims of Hurricanes Harvey, Irma, and Maria. Among them is a valuable tax credit for eligible employers affected by the devastating hurricanes. The Disaster Tax Relief and Airport and Airway Extension Act of 2017 allows an "employee retention credit". In [...]

Putting ESOPs to Work for You and Your Employees

Employee stock ownership plans (ESOPs) provide tax-saving opportunities for business owners who want to exit the business and are committed to employee ownership. A business valuation is the first step to determining whether this option makes sense for you. How ESOPs Save Taxes When business owners sell C corporation stock for a big profit, they usually qualify [...]

Coming Soon: Deadline to Reverse 2016 Roth Conversions

Do you regret converting your traditional IRA into a Roth IRA? Fortunately, a taxpayer-friendly aspect of the Roth conversion rules is that you have until October 15 (adjusted for weekends) of the year following the year of a conversion to reverse it. In other words, the deadline for reversing any 2016 Roth conversions is October 16, [...]

Work Opportunity Tax Credit: What Business Owners Need to Know

The Work Opportunity tax credit (WOTC) is a federal income tax credit that's available to businesses that hire members of certain "targeted" groups. Here's how your business may be able to benefit from this potentially lucrative tax break. WOTC at Work Calculating the Work Opportunity tax credit (WOTC) can be confusing. Here's an example to illustrate [...]

Year-end tax planning: Explore 2017’s key areas

As we approach the end of 2017, it’s once again time to explore strategies for reducing your construction company’s tax bill. Because every business is different, it’s important to work directly with your CPA to determine the right moves for you. Nonetheless, here are some key areas to explore when looking for savings. Deferrals and [...]

Are You Ready for the New IRS Partnership Audit Rules?

Legislation enacted in 2015 established a new IRS audit regime for partnerships and limited liability companies (LLCs) that are treated as partnerships for tax purposes. Here's a comparison between the old and new partnership audit rules, along with a summary of recently proposed guidance to help partners prepare for the changes that are effective starting with [...]

Taking Advantage of the Research and Development (R&D) Tax Credit

U.S. taxpayers claim nearly $10 billion in R&D tax credits each year. Many people assume that these credits are going only to the large companies that are revolutionizing the world. That’s not true. In fact, R&D tax credits are available for companies of all sizes, particularly because of new legislation enacted in December 2015.   In [...]

Boost retirement benefits with a cash balance plan

Construction business owners may not be able to set aside as much as they’d like in tax-advantaged retirement plans. Typically, they’re older and more highly compensated than their employees, but restrictions on contributions to 401(k) and profit-sharing plans can hamper retirement-planning efforts. One solution may be a cash balance plan. Defined benefits with a twist [...]

Are you getting all that you deserve?

Don’t overlook the research credit Construction businesses are often surprised to learn that they may be eligible for the research tax credit, often referred to as the “research and development,” “R&D” or “research and experimentation” credit. Too often, they assume that this tax break is for only large pharmaceutical, biotechnology, software and aerospace companies, so [...]

Maximizing the Section 199 deduction

As a construction business, your company may be eligible for the Section 199 deduction for “domestic production activities.” This tax break is known by several names, including the “domestic production activities deduction” and the “manufacturers’ deduction.” In fact, many contractors overlook the Sec. 199 deduction because they believe it’s only for manufacturers. But it’s also [...]

Important things to know about the Nevada Commerce Tax

On June 10, 2015, Nevada Governor Sandoval signed a bill enacting a new annual commerce tax (which became effective July 1, 2015) applicable to each business entity engaged in business in Nevada with Nevada-sitused gross revenue exceeding $4,000,000 in a taxable year. If a business entity’s Nevada gross revenue exceeds $4,000,000, the excess is subject [...]

3 tax deductions that could lead to an IRS audit

For too many taxpayers’, the worst nightmare is getting audited. However, you should still take advantage of tax deductions that you are entitled to take. Keeping the correct documentation to back up the deductions is key when the IRS decides to take a further look at your return. Listed below are three deductions that frequently [...]

TAX UPDATE: Tax extenders bill signed into law

On December 18, 2015, the President passed the “Protecting Americans from Tax Hikes Act of 2015” (The PATH Act). The bill extends various expired tax provisions, “extenders,” in three ways. Some tax breaks have been made permanent, some have been extended through 2016, and some have been extended through 2019. The following are some of [...]

Reporting business charitable deductions

Giving to charities and other non-profit organizations is a good way for your small business to build goodwill within the community and is often part of an overall public relations strategy. For businesses, making charitable donations in cash, property and time can be a benefit when it comes time to file your business taxes. Many [...]

Year end tax planning for construction companies

As year end approaches, construction company owners should work with their tax advisor to review options for reducing their 2015 tax bills. There’s no cookie-cutter formula for year end tax planning — the right approach depends on your particular situation — but here are several strategies to consider. Look ahead Although the primary goal of [...]

New Due Dates for Tax Returns – How Does This Affect You?

If you read about the due dates of all of the different types of tax returns changing, you are probably wondering how these changes affect you. This is where things get interesting. The new law changes a number of due dates for tax returns. The Surface Transportation and Veterans Health Care Choice Improvement Act of [...]

The Child and Dependent Care Credit, Do You Qualify?

During the summer months, many children attend daycare and summer camps while their parents are at work since school is out. What you may not be aware of is that the costs for these may qualify for a federal tax credit (Child and Dependent Care Tax Credit). Below are a few things that you should know about [...]