Gumbiner Savett Inc. has been working with the construction industry since we opened our doors in 1950. I have seen many ups and downs in the industry throughout the years and in these uncertain economic times, many construction projects have been put on hold — sometimes indefinitely and other times for a relatively short duration. If you find yourself in such a predicament, here are four steps to stopping and restarting a project effectively:
Cash flow is the lifeblood of any business, but it’s particularly critical for construction companies. And, in today’s economy, the construction industry’s typically modest profit margins are even thinner than usual. That’s why it’s essential to lay a solid foundation for healthy cash flow, starting with the contract. In many cases, it’s possible to negotiate contract terms that can accelerate the flow of cash.
Construction businesses are usually very busy during the summer months. A little forethought and planning during this busy time could make the difference when tax time rolls around.
During slow periods, manufacturing companies try to reduce costs. They scale back production by idling machines or shuttering plants. Reducing costs means cutting capacity, which shrinks your potential for profits and can leave you hurrying to catch up when demand returns.
I discuss how the IRS distinguishes business activities with those of a hobby. In this post, I will review how the Tax Court concluded, in one decision, a taxpayer who bred and raced horses was involved in a hobby instead of operating what was intended to be a for-profit business for two out of four tax years in question. This decision allowed the taxpayer to deduct the net losses from only two years, even though the horse racing activity never generated a profit. (Merrill C. Roberts, TC Memo 2014-74)
If you have a sideline business that throws off a net loss (deductible expenses in excess of revenue), you may think you can write off the loss. But the IRS may claim your purported business loss is from a hobby that never had a chance of being profitable. The IRS likes to make that argument because the tax rules for hobby losses are strongly in the government's favor.
Does your business offer a retirement plan for employees? If not, it may be time to consider setting one up. A retirement plan may be beneficial for several reasons. It can help you to recruit employees as part of your overall compensation package, and can help your employees by giving them a tax-advantaged way to save for their retirement.
Have you been lucky at the track, or won a nice raffle prize? Did your numbers hit in the lottery? Or maybe you had a really good night at bingo or the casino? While congratulations may be in order, we have a bit of bad news. Whether you are a professional gambler or made a [...]
If you withhold retainage (known as a portion of a contract's final payment withheld by a principal — client or owner — until the project is complete in all respects), from subcontractors, you may be able to defer some of your taxable income to future years. This opportunity stems from the way retainage payable is [...]
Every business needs an accounting system. The type of system depends on the sector and the size of your business. As a starting point, your main concern should be that your accounting records and filing system are adequate to support the income and expenses that you show on your income tax returns. Intelligent Business Decisions: [...]