5 strategies construction firms use to lower their taxes

Kennith Bogan

This article is the second in a series looking at what public and private construction firms pay in federal taxes and the techniques some of them use to minimize their tax burden. Click here for the first article.

A recent Construction Dive analysis revealed that public construction firms’ effective federal tax rates are among the lowest of any sector. The 19 largest profitable firms in the industry paid a collective 16.8% on their U.S. profits in federal taxes in 2020, a fifth lower than the 21% statutory rate set by Congress.

Of those, 12 — or nearly two-thirds — paid less than the statutory rate. 

These construction firms relied on several provisions to reduce their tax liability, all of which are completely legal. Here is a look at the top techniques they used:

1. Depreciation on assets

The intensive capital investments construction companies make are one of the main avenues

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Study: Lowest-Income Homeowners Pay More Property Taxes

Kennith Bogan

A University of Chicago analyze uncovered that property valued in the bottom 10% in a metro commonly averaged an productive tax charge double of those in the major 10%.

CHICAGO – The Middle for Municipal Finance at the University of Chicago Harris College of Public Plan has concluded a nationwide assessment revealing that property taxes, which crank out around $500 billion and represent the one major revenue supply for regional governments just about every year, are inequitable, with the stress falling disproportionally on proprietors of the least valuable homes in most counties, metropolitan areas, and other taxing jurisdictions throughout the United States.

The research finds that a residence valued in the base 10% within just a distinct jurisdiction pays an powerful tax amount that is, on ordinary, much more than double that paid by a assets in the major 10%. This suggests that, on a nationwide foundation, the least expensive-cash

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PPP loans and taxes: what to consider before you file

Kennith Bogan

Tax season is upon us, and for contractors that borrowed dollars beneath the federal government’s Paycheck Protection Software last yr in get to aid their organizations survive the economic hardships introduced by the COVID-19 pandemic, there are a handful of challenges really worth noting.

The biggest influence to their 2020 corporate tax returns submitted this calendar year will be that, following a lot of back again and forth, these getting forgiveness for the financial loans will be ready to deduct the charges permitted beneath the plan.

This is excellent news for financial loan recipients considering the fact that deductibility was up in the air till the stop of previous calendar year, reported Michael Ceschini, handling member at Ceschini CPAs Tax & Advisory in New York. The loans are forgivable if at minimum 60% of the proceeds are spent on payroll expenditures and the remaining 40% on outlays for rent, utilities

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How To Compute Rental Home Cash Flow Soon after Taxes (CFAT)

Kennith Bogan

Our mission at Kittle Real Estate is to be your greatest resource for real estate tips. The answer I’ve received has been worded differently depending on the lawyer I was asking, but ultimately, the answers have been usually the exact same. But for training in marketing and advertising, sales or motivational stuff, the requirements of one particular agent could differ greatly from these of the other people. When you are purchasing the biggest investment of your life make certain you are using a qualified real estate agent. Following you’ve completed your courses, passed the licensing exam, received your background verify, and met a quantity of other minor needs, you will be awarded your real estate license. Once you have completed your core educational specifications, the school will send your certificates to TREC in most circumstances. What most agents don’t realize is that you are not required to turn into a … Read More

Residence Improvements And Your Taxes

Kennith Bogan

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House Improvements And Your Taxes

Kennith Bogan

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