How can you save taxes with the DPAD?

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How can the DPAD help construction companies save?

The Domestic Production Activities Deduction (DPAD) is a term that every owner of a construction company should know. It is a free tax deduction that is allowed for any US company that produces goods. While this deduction is often called the manufacturer’s deduction, it truly is much broader than that. Not only do construction contractors qualify for this deduction, but so do those providing architecture and engineering services to construction contractors.

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Are you taking advantage of this huge tax opportunity?

  energy efficient deduction

When clients call me looking to create tax deductions before year end, I generally deliver the bad news that if they want to bring their taxable income down they are going to have to spend some of their money or at least put it in a restricted account.  This, however, is not necessarily the case with clients working in the construction industry.  Clients in this industry do have an opportunity to create tax deductions for jobs that they have already completed that vastly exceeds any additional cash they will need to spend to create those deductions. 

This elusive opportunity, to magnify the deductibility of cash outlays, is called the “179D Deduction”.  The 179D deduction is available to the owner of a building that meets certain energy efficiency guidelines. More importantly for those of you who own or manage a construction, engineering or architecture firm; the government has the ability to allocate a 179D deduction to a contractor, engineer or architect who designed a newly constructed building or upgraded building system.

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The Protecting Americans from Tax Hikes Act Passed! Here’s All the Info You Need.

tax-1501475It’s official! The House, Senate, and President passed the Protecting Americans from Tax Hikes Act of 2015 (PATH Act), which includes momentous tax breaks and incentives for taxpayers. Included in this legislation are over 20 vital permanent provisions that will benefit individuals and businesses alike, including a permanent R&D credit, Section 179 deduction, and the American Opportunity Tax Credit.

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Working out at the Office is a Tax-Free Perk

fitness-series-2-1467446Your company probably offers an array of fringe benefits to its employees, including health insurance and group-term life insurance. While there are certain requirements, these fringe benefits are generally deductible by the company and tax-free to the employees as long as they are not discriminatory in nature. (If your company decides to reward a select group, such as limiting benefits to only the corporate officers, the benefits are generally taxable to the recipients.)

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Handling Interest on Loans to Inject Capital in your Business

capital; money; businessThere are instances when you can write off interest on personal loans used for business purposes, such as injecting capital into an S corporation, multi-member LLC, partnership or C corporation. But keep in mind that interest expenses must be classified into one of four categories (see box at the bottom of this article for details).

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Tax Structuring for Exporters – IC-DISC

ship-1460134In my previous article, How to Start a Global Sales Strategy for Your Exports , I discussed some significant incentives and resources Maryland offers manufacturers that are considering an export initiative. This second article of the three part series will look at tax structures for exporters and the incredible tax savings these structures provide.

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