Combining new and old tax strategies to minimize your liability
A cutting-edge tax strategy for construction companies requires staying on top of the ever-changing tax policies and maintaining tax compliance at the state and local levels, as well as going back to the basics to ensure that you are using the appropriate accounting methods to minimize your tax liability.
Should you use PCM, CCM, or EPCM?
Choosing a permissible method of accounting for tax purposes is a complicated process and something contractors need to review every year.
Most contractors will use the accrual method for their overall accounting, but the cash method could be an option. Under the cash method, you would pay taxes on revenues only when the cash is received. In some instances, the cash method has saved contractors hundreds of thousands of dollars.
Our tax consultants could help you investigate what the cash method could mean to your company. If it makes a significant difference, you can rely on our tax specialists to help you petition the Internal Revenue Service (IRS) to make the tax-saving conversion.
You can also rely on us to help you decide which accounting method to use for your long-term contracts. Should it be percentage of completion method (PCM), completed contract method (CCM), or exempt percentage of completion method (EPCM)?
Tax minimization strategies in challenging times
Our tax experts will take a proactive approach to your tax planning and compliance needs. Our industry specialists are part of a larger tax practice that continually monitors legislative, regulatory, and precedent-setting developments in tax to better serve you. Are tax experts are well-versed in federal, state, and local tax issues that can affect contractors.
On the state and local levels, sales and use taxes are often misunderstood and can be complicated especially when working with not-for-profit or government organizations.
There are also nexus questions. Now that the IRS and state tax authorities are collaborating, companies can be surprised to find that they owe state taxes.
Do you have enough presence in a particular state to be subject to a tax? Our state and local tax specialists can help you with planning and preparation so you know the answer. If you have a tax presence, but haven’t been filing, they can help you determine if you should consider filing, as well as how to avoid penalties and potentially interest if you do file.
You can also rely on us to ensure that you benefit from all possible federal and state tax credit opportunities. Often times there are state tax incentives that are similar to or linked to federal incentives. Many construction companies are going international. We have a dedicated group of international tax advisors in key locations throughout the world who support you with international tax planning solutions and assist with compliance issues, such as value-added taxes and foreign earnings repatriation.
You will appreciate the efforts of our tax consultants to make sure you have a tax strategy that optimizes every opportunity for savings.