Download - Year End Tax Planning Tips for Contractors
Year End Tax Strategy for the Contractor
We will begin shortly, please dial into the conference line:1-877-380-7755 x8702678
Presenters
Steve Ball, CPA, CVA, CCIFP Scott Handwerger, CPA
• Using the right long-term accounting method can defer contract profits and the associated taxes.
• Small Business Jobs Act of 2010• Small Contractor Exemption
Accounting Methods
4
American Recovery and Reinvestment Act of 2009
Small Business Jobs Act of 2010
• Many small businesses report income on the accrual method, which generally accelerates income, when they could use the cash method of reporting for tax purposes.
Cash vs. Accrual Methods
• Create a fixed asset purchase strategy that will minimize taxes.
• 50% bonus depreciation extended into 2010.• Bonus depreciation for 2011 will likely be
increased to 100%.
Expensing Assets vs. Depreciation
• This provides for faster write-off of buildings used in a business by segregating the cost into smaller components, and using a shorter tax depreciation life for items specific to the use of the building and not merely a structural component.
Cost Segregation Studies For Real Property
• Certain contractors are allowed a deduction based on their profits. Careful planning can maximize this tax benefit.
Production Deduction
• This came about because of a law change regarding the deductibility of assets that have a useful life of one year or less.
Deduction Of Prepaid Expenses That Meet Certain Criteria
• Taking distributions versus drawing a salary for the owners of the business can save payroll taxes.
Payroll Taxes
• The right retirement plan can reduce current taxes and create a comfortable retirement for the owner.
Contributions To Qualified Retirement Plans
• Employee Stock Ownership Plans are gaining popularity as a tax-advantaged exit strategy for retiring business owners.
ESOPs For Retiring Owners
• Includes 5-year NOL carry back for losses in 2009, irrespective of size of company.
Worker, Homeownership, and Business Act of 2009
• No AGI limit on traditional IRA rollovers to Roth IRA in 2010. Tax can be deferred until 2011 and 2012.
IRA Rollovers
• Always consider the impact of the AMT in tax planning.
Beware Of The Alternative Minimum Tax
Questions?
Bill Reading
[email protected] | 410.900.1385 | www.gma-consult.com
www.facebook.com/GrossMendelsohn
www.twitter.com/GrossMendelsohn
