PaintSquare.com
      | Connect Follow us on Twitter Like us on Facebook
About | Subscribe | Advertise
  

 

Download our free Bridge Coating Systems eResource Book

Paint and Coatings Industry News

Main News Page


Tax Breaks to Expire; Tips Offered

Friday, March 16, 2012

More items for Program/Project Management

Comment | More

Without action from Washington, painters and other specialty trade contractors “could see a significant tax increase next year, as about 50 tax provisions expire at the end of this year,” the American Subcontractors Association warns.

The vanishing benefits include favorable capital-gains rates, favorable individual income-tax rates, lower dividend rates, numerous energy incentives, bonus depreciation and most of the estate and gift tax reform provisions passed at the end of 2010, according to ASA.

Without action from Washington, painters and other specialty trade contractors “could see a significant tax increase next year, as about 50 tax provisions expire at the end of this year,” the ASA warns.

Drawing on advice from global tax advisors Grant Thornton LLC, ASA advises subcontractors to employ careful tax planning and work closely with tax advisers on how these potential changes will affect them, while taking advantage of the current benefits.

For example, Grant Thornton advises:

• Use bonus depreciation in 2012 while you can. Subcontractors can continue to write off half of qualifying asset purchases throughout 2012.

• Review deferred compensation plans. Many subcontractors are struggling to remain profitable in this difficult economic environment. If your company can’t afford large bonuses to retain key employees, it may be time to revisit alternative compensation arrangements.

• Be aware of “hidden” deferred tax liabilities: Subcontractors should work with their tax advisers to make sure that future cash taxes are taken into account in cash-flow planning.

• Take full advantage of capital asset expensing deductions. Rules originally intended for small businesses were significantly expanded to allow contractors to expense up to $500,000 of 2010 fixed asset costs, provided that assets of less than $2 million were placed in service throughout the year. Unlike bonus depreciation, this applies to new or used assets. A subcontractor who is already in a tax-loss position, however, cannot take this deduction.

• Determine whether your company can reduce property taxes. A property-tax review can ensure that real and intangible property is excluded from the personal property tax base.

 Examine capital asset depreciation methods and lives. Depreciation of fixed assets is one of the most complex aspects of tax law. Understanding and properly applying these rules can accelerate income tax deductions.

 Consider establishing a separate entity to own and lease fixed assets used in the business. These entities can help manage assets and may significantly reduce sales-and-use tax, which is collected and remitted regardless of whether a company is profitable.

 Maximize Section 199 deductions. The Section 199 domestic production activities deduction is a unique tax incentive allowing taxpayers to deduct 9 percent of qualifying production activities, which include the construction or substantial renovation of domestic real property.

For more information, contact Todd Taggart, a partner and national construction practice leader, at Grant Thornton.

   

Tagged categories: American Subcontractors Association (ASA); Business matters; Economy; Taxes

Comment from Tom Schwerdt, (3/19/2012, 8:32 AM)

This emphasizes how overly complex the tax code is. It is silly that a business should have to worry about fifty different tax provisions expiring.


Comment Join the Conversation:

Sign in to our community to add your comments.

Chicago Corrosion Group
Vendor-neutral corrosion consulting

What you don’t know about painting is costing you a fortune. Call today to see how CCG’s vendor-neutral, owner’s advocacy saves our clients millions.


Armakleen Company, The
ARMEX when nondestructive cleaning is critical

The gentle physical propriety of baking soda but yet aggressive cleaning ability is what makes ARMEX the only choice for nondestructive abrasive blasting.


SAFE Systems, Inc.
Custom blast rooms
by SAFE Systems

Don't waste time and money "making do" with a "standard" design. Let us work with you to design and build the
system that best fits
your requirements.
Call 1-800-634-7278


Sidewinder/Persyst Enterprises, Inc.
The Sidewinder Model M2 Solvent Recycler

Combat the rising cost of gunwash, thinners, acetone & more while drastically reducing waste disposal coat.


WINOA Group
W Abrasives : Bullets for cost killers

WA COST is the right solution for cost killers who want to reduce their blasting costs. Visit us during the GIFA (Hall15 - D14).


Sherwin-Williams
Sherwin-Williams Protective & Marine Coatings

With 4,000 distribution points and 3,700+ years of experience, Sherwin-Williams delivers the products, support and expertise you need, right where you need it.


Modern Safety Techniques
Modern Safety Techniques

See our Low Temperature Catalyst for your CO removal needs. Help to provide your workers with safe, comfortable breathing air!


HoldTight Solutions Inc.
NO FLASH RUST -
NO CONTAMINANTS

Our HoldTight®102 salt remover & flash rush inhibitor prevents flash rust by removing surface contaminants.
Contact us for your nearest distributor. (800) 319.8802 sales@holdtight.com


Termarust Technologies
Termarust (HR CSA) Chemically Stops
Active Corrosion

Pipeline Utility Aerial crossings coated since 1992. Termarust's (HR CSA) was used to overcoat lead paint and preserve cables, pipes and support towers.

 
 
 
Technology Publishing

The Technology Publishing Network

The Journal of Protective Coatings & Linings (JPCL) PaintSquare
Durability + Design Paint BidTracker

 
EXPLORE:      JPCL   |   PaintSquare News   |   Interact   |   Buying Guides   |   Webinars   |   Resources   |   Classifieds
REGISTER AND SUBSCRIBE:      Free PaintSquare Registration   |   Subscribe to JPCL   |   Subscribe to PaintSquare News
MORE:      About PaintSquare.com   |   Privacy policy   |   Terms & conditions   |   Site Map   |   Search   |   Contact Us
 

© Copyright 2000-2015, Technology Publishing / PaintSquare, All rights reserved
2100 Wharton Street, Suite 310, Pittsburgh PA 15203-1951; Tel 1-412-431-8300; Fax 1-412-431-5428; E-mail webmaster@paintsquare.com