Choosing the right executor — sometimes known as a “personal representative” — is critical to the smooth administration of an estate. Yet many people treat this decision as an afterthought. Given an executor’s many responsibilities and complex tasks, it pays to put some thought into the selection.
Now is the time to determine if you made any payments during the 2018 tax year that would require you to file Form 1099. If you paid $600 or more in compensation to a non-employee or an unincorporated business, you are most likely required to report the amount on a Form 1099. Generally, any person, including a corporation, partnership, individual estate, and trust which makes reportable transactions must file a Form 1099. The type of reportable transaction determines the specific Form 1099 which must be filed. One of the most common forms issued is Form 1099-MISC. Form 1099-MISC is required for each person to whom you have paid any of the following during the year: Read More
In many parts of the country, summer is peak season for selling a home. If you’re planning to put your home on the market soon, you’re probably thinking about things like how quickly it will sell and how much you’ll get for it. But don’t neglect to consider the tax consequences. Read More
Manufacturers are being revolutionized by digital technologies. Digitalization is the use of digital technologies and data in order to create revenue, improve business, replace and transform processes, and create a new environment for digital business. Digitalization is integrated into all aspects of our life, and the manufacturing industry is no different. Digitalization is enabling end consumers to be more empowered, creating transparency with suppliers, enabling flexible business models with more customer-focused business processes, enhancing security, and at the same time, allowing for better analysis.
Accounting methods used in the construction industry are unique and typically require a business owner to use two different methods of accounting for their construction activity – one for the bank or bonding company and one for tax filings.
How to Better Control Direct Construction Costs
With rising materials costs and downward price pressures, it is more important than ever to manage project expenditures. There are fewer jobs out there so it is essential to make a profit on every project.
Customers are looking for efficiencies and are examining quotes closely. Stay one-step ahead by managing your direct and indirect costs and their impact on gross margin, which must cover administrative overhead and profit. The gross margin – what’s left after job costs are subtracted from revenue – will vary according to the type of construction project. The percentage can range from under 10 percent on large commercial jobs to more than 40 percent for home remodeling.
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.
In July of 2015, the Financial Accounting Standards Board (FASB) issued Update 2015-11 Inventory (Topic 330), which will amend guidance within Topic 330. If you are currently valuing your inventory using a method other than Last-in, First-out, (LIFO) or the retail inventory method, you need to make sure you are aware of this update to implement and follow it. This standard was written as part of FASB’s Simplification Initiative and should hopefully simplify your valuation of inventory approach. What this update does is change the approach to value inventory from a lower of cost or market test, to a lower of cost and net realizable value approach. The following is further information on what you need to be aware of and consider when implementing this update.
Of course, as a company owner, you prefer your company’s tax liability to be as small as possible. Transfer pricing is a gray area of business tax law that is becoming increasingly more challenging for taxpayers who are multinational enterprises (MNE). Proper transfer pricing practice through strategic tax planning can reduce your overall tax liability while ensuring compliance with government regulations.
To help you remain on the right side of transfer pricing, and to help you avoid an IRS audit as a result of poor transfer pricing planning, we’ve compiled some basic information and direction. In addition, the MKS&H accounting experts are available to answer your specific transfer pricing questions and help you remain compliant.
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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