The year 2023 is ending and people are busy planning the holiday season. At this stage, the companies within the construction industry are getting ready to plan and prepare their taxes. If you are a business owner looking to make your mark in the construction industry, you need to deal with the increasing inflation levels and manage your resources carefully to fund your upcoming projects. You also need to learn about the key factors that are going to affect your year-end tax planning.

Basta & Company offers complete tax planning and preparation services for their clients in the construction industry. We understand the tax challenges you may encounter. We offer solutions to simplify your tax filing needs..

Factors that will influence year-end tax planning in 2023

Here are some of the factors that will affect year-end tax planning in 2023.

Bonus Depreciation

Bonus depreciation enables the construction business taxpayers to effectively deduct the additional depreciation for the price of the qualifying business property, apart from the normal depreciation allowances. This can lead to capital purchases by the taxpayers. As per the Tax Cuts Jobs Act (TCJA), business entities can deduct 80% of the cost of obtaining a qualified property.

Section 179 Deduction:

Take advantage of the Section 179 deduction, which allows you to deduct the cost of certain business assets in the year they are placed in service. This can provide a substantial tax benefit for purchasing equipment or vehicles.

Tax Credits:

Explore available tax credits, such as the Work Opportunity Tax Credit (WOTC) or energy-efficient building incentives. These credits can reduce your tax liability significantly.

Contract Accounting:

Construction contracts can be complex, and how you account for them can impact your taxes. Proper contract accounting can help you match income and expenses more accurately.

Summing Up

Year-End Tax Planning can be a challenging and complicated process, but with our guidance, you can avoid errors and manage your resources smartly. Since we have been offering construction business CPA in California for a long time, we can guide you at every step of the way when you want to prepare your taxes efficiently.