With the falloff in residential and commercial construction in many markets, some construction contractors have considered expanding their revenue horizons by investigating contracts funded by the American Recovery and Reinvestment Act of 2009.

However, locating, pursuing, and meeting the requirements of government contracts is vastly different from private sector work. Construction professionals should be aware of some of the key challenges and best practices of government contracting.

To get started, spend some time examining where contract dollars are spent in your area and which companies are winning contracts. The databases at www.usaspending.gov and www.fedspending.org contain a wealth of free information.

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While many home builders are still stuck in the housing slump and look for the economy to make a recovery, the nation’s biggest builders are buying lots again, and this is good news for consumers, REALTORS and investors. Due to an influx of extra cash from tax refunds last year, the nation’s building titans are beginning to find stability. Business Week’s Peter Coy and John Gittelsohn report in their article “Housing: Hope on the Horizon” that “their shares have nearly doubled over the past year and they’re back in the game of competing for land, reflecting confidence that after years of falling prices, rising foreclosures, and busted dreams, better days are ahead.”

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Last week, President Obama signed into law the Hiring Incentives to Restore Employment (HIRE) Act (HR 2847). The law includes several major tax provisions designed to promote job creation as the nation’s economy continues to recover from recession.

The Act introduces the “Hire Now Tax Cut” to qualified employers both in the form of payroll forgiveness for Social Security taxes paid for qualified new hires, as well as a tax credit for keeping those employees on payroll for 52 consecutive weeks. Click here to read CB&H’s recent Tax Bulletin on the HIRE Act for more information about these provisions.

The Act also extends enhanced Code Sec. 179 expensing threshold levels through December 31, 2010. This extension means that the previous limits of $125,000 with a $500,000 cap will remain increased to $250,000 with an $800,000 cap through the end of the calendar year. Code Sec. 179 expensing, unlike bonus depreciation, is available on both new and used property.

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As tax time approaches, businesses in the real estate and construction sectors will have to reconcile a challenging 2009. However, several pieces of legislation were signed into law over the course of the year that can provide some assistance, particularly to the residential construction industry. Before starting on your 2009 tax return, you should be aware of the following provisions.

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As 2009 closes in just a few days, there are some important tax changes that will help you save money and prepare to file your 2009 tax return in the spring. We have summarized many of the major changes in our blog post, “Tax Planning Strategies & Year-End Considerations” in November, and since it has been one of our most popular posts, we’ve reposted it here and encourage you to review this information again before starting the process for your 2009 tax return.

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President Obama announced yesterday that he is currently working with Congressional leaders on a new economic stimulus package that will include tax cuts and new spending. Many of the initiatives outlined include incentives for businesses to create jobs, construction spending for roads and other infrastructure projects, and weatherizing rebates for homeowners. Consideration of the proposed legislation will not occur until early next year. As reported today in The New York Times:

The president’s new proposals include eliminating capital gains taxes on small business investment and creating “cash for caulkers” rebates for consumers who invest in home-weatherization projects — an idea modeled on the popular “cash for clunkers” program that increased auto sales over the summer.

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As the end of the year approaches, now is the time to evaluate your business and your personal tax strategies. By taking the time to prepare now, using this checklist, you will be able to develop a clearer picture of what your tax picture will look like while there’s still time to maximize current-year savings.

Retirement Planning

Look to maximize tax-deductible retirement plan contributions. The following table provides the maximum amounts that can be deferred under several popular retirement plan options during 2009.

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On November 6, 2009, President Obama signed into law the Worker, Homeownership, and Business Assistance Act of 2009 (H.R. 3548), extending and enhancing a popular but temporary tax incentive — the five-year net operating loss (NOL) carryback provisions.

Under the new law, the expanded five-year NOL carryback, which was originally available to qualifying small businesses for their years beginning in 2008, has been extended and enhanced to include 2009 NOLs for nearly all businesses, regardless of size. Qualifying small businesses that utilized the five-year carryback provisions for their 2008 tax year may also take advantage of the five-year carryback provisions for 2009.

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A Series of Brown Bag Seminars to Cover the Basics

Are you interested in getting a government contract but having trouble deciphering the alphabet soup of acronyms?

Are you confused by the different types of contracts and what they would mean to you and your business?

Do you feel lost when government personnel and contractors talk to you because even though they’re speaking English, you just don’t understand them?

If so, then this series of seminars is for you.

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Taxpayers looking to take advantage of the $8,000 First-Time Homebuyer Tax Credit have only a few months to close on their home purchases. Eligible purchases must be completed before December 1st.

But as reported in The New York Times, the success of the program, which was enhanced and extended by the American Reinvestment and Recovery Act earlier this year, has many calling for Congress to extend the benefit into next year and enlarge the pool of eligible recipients:

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