PaintSquare.com


The First Word in Protective & Marine Coatings

A Product of Technology Publishing / PaintSquare
JPCL | PaintSquare News | Durability + Design | Paint BidTracker

Get Paint BidTracker's Water Facility Painting Opportunities of 2015

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.

Minerals Research & Recovery

HIGH PERFORMANCE ABRASIVES


“Made in the USA!”

Why recycle waste from other countries? Go FASTER, CLEANER, at 1/3 THE COST with MR&R “All-American” Sharpshot®HP!!

WATCH THE VIDEO


SAFE Systems, Inc.
SAFE Systems'
Blast Lights &
Deadman Switches

Halogen or LED blast lights available with our NEW urethane bumper. Switches available in many colors for color coding your hoses.


KTA-Tator, Inc. - Corporate Office
KTA-Tator EH&S Services

• Ambient & Worker Exposure Air Monitoring
• Safety & Health Program Development
• Lead Paint Assessments
& Specifications
• Health Hazard & Jobsite Safety Assessments
Call 1-800-245-6379


Carboline Company
Carboline Company
www.carboline.com

Coatings Done Right™
For over sixty years, Carboline has been considered the standard of superior high-performance coatings, linings, and fireproofing products.


Mitsubishi Gas Chemical America
Performance Amine 1,3-BAC

A highly reactive cycloaliphatic diamine offering superior performance. Reasonable cost and curing efficacy makes it suitable for all types of epoxy resin applications.


Wasser High-Tech Coatings Inc.
Wasser Coatings Protect

some of the most important bridges in the country; learn about our NEPCOAT-approved system and our entire range of MCU & Polyurea coatings. 1-800-627-2968 www.wassercoatings.com


Barton International
Garnet Replaces Staurolite at Gulf Coast Shipyard

Learn how Barton 100HPA® was proven to cut 33% faster used 35% less abrasive with 50% less dust than Staurolite at a Gulf Coast Shipyard. (800)741-7756 info@barton.com

 
 
 
Technology Publishing

The Technology Publishing Network

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

 
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 2000-2014, 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