Attention to detail is critical when dealing with sales and use taxes, as personal liability can result even when conducting business as a corporation or limited liability company. The sales tax is an additional cost tacked on to purchases of tangible personal property and certain services. The use tax, however, is a compensatory tax paid directly by the purchaser when the seller doesn’t collect the sales tax.
Unfortunately, sales and use tax complexities are compounded in the construction industry. Sales of real estate typically are not subject to tax, but contractors are subject to tax on their purchases of tangible personal property that are subsequently incorporated into real estate improvements. Therefore, barring any special exemptions, both general contractors and subcontractors must pay taxes on the majority of their purchases.
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.
For decades, small business owners, accountants, and others have argued the need for different accounting standards to be used by smaller, privately held companies as a replacement for the complex and burdensome standards issued by the Financial Accounting Standards Board (FASB). Opponents, on the other hand, have argued for only one set of accounting standards, pleading that multiple accounting standards could only lead to confusion and a lack of credibility for issuers of financial statements prepared under “lesser” standards.
Compelling arguments can be made by both camps, but the practical portion of the argument has, in recent years, tilted in favor of some version of “Little GAAP.” The continued proliferation of complex and controversial standards, some of which are costly and difficult to apply, has lead the American Institute of Certified Accountants (AICPA) and the FASB to increase their efforts regarding this difficult issue.
Two years ago, FASB established the Private Company Financial Reporting Committee (PCFRC) to address standards for private companies. The PCFRC recently issued a significant statement suggesting that the International Financial Reporting Standards for Small and Medium-Sized Entities (IFRS for SMEs) represent an “attractive alternative for U.S. private companies.”
If your business has a foreign bank account or other foreign financial interest, you need to make certain that you comply with reporting rules because the penalties for noncompliance can be substantial.
U.S. persons with a financial interest in or signature authority over a foreign financial account are generally required to file Form TD F 90-22.1, Report of Foreign Bank and Financial Accounts (“FBAR”) with the Department of the Treasury. The FBAR is due by June 30 for a foreign account in which the aggregate value exceeded $10,000 at any time during the previous calendar year.
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 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.
Selling the business you’ve built can be a difficult decision for any entrepreneur, but it is just the first step in a long and complex process. The New York Times reviews the actions necessary once you say “let’s sell.”
There is no way to overstate the intensity with which buyers will scrutinize your business. But here are things you can do to put your best foot forward.
First, get your books in order. Not being able to provide accurate financial statements in a timely manner can cause a deal to unravel in short order. Be sure to have the following on hand before you go to market:
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.
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.
Ted Turner took over his father’s billboard business and turned it into a multi-billion dollar empire. Bill Marriott took over his father’s role as CEO of Marriott. Herbert Fisk Johnson III is the seventh generation to lead SC Johnson & Son. With names like these, one would be led to believe that second generation CEOs are primed for success. Unfortunately, for many family-run organizations, statistics show a different story.
According to the USA Today, successfully passing the leadership of a company from one generation to the next is much more rare than expected.
Last week, President Obama signed into law the 
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. 
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, 
