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Learn how to set up and run your construction business to minimize taxes. This isn't a guide to filling out your tax return. It's a complete tax advisor for contractors, revised to conform to the latest changes in the tax code. Filled with the type of advice high-priced accountants and tax pros give their contractor clients, it shows how to set up and run your business to minimize your tax burden. Covers tax shelters for builders, write-offs and investments that will reduce your taxes, accounting methods that are best for contractors, and what raises red flags with the I.R.S. If your company is making money and paying taxes, Contractor's Year-Round Tax Guide can save you thousands of tax dollars. Why will this new tax manual help you?:
The Author: Michael C. Thomsett, an accounting consultant to several construction and engineering firms in the Northwest, has written 46 books on business and finance, and published over 500 articles for trade and business magazines. He specializes in introducing practical business systems for builders and contractors. Table of Contents: 1. Taxes and Forms of Organization, 5 A New Tax-Planning Strategy, 6 The Corporation, 7 The S Corporation, 8 Partnerships, 9 Proprietorships, 9 Self-Employment Tax, 10 When to Incorporate, 11 Subsidiary Corporations, 11 First-Year Tax Strategy for Corporations, 14 Owners As Consultants, 16 2. Capital Assets, 7 Modified Accelerated Cost Recovery, 18 Personal Property Depreciation, 18 Real Estate Depreciation, 19 Expensing Assets, 20 Capital Asset Tax Benefits, 21 3. The Ordinary and Necessary Rule, 23 Deciding to Capitalize Expenses, 24 Expenses Not Allowed, 24 High-Visibility Categories, 25 4. Compensation, 29 Reasonable Payments, 29 Dividends, 30 Salaries and Wages, 30 Bonuses, 31 Stock Options, 32 Consulting Fees, 32 Contracts with Employees and Consultants, 35 5. Profit Sharing and Pension Plans, 39 Why Have a Plan? 39 Qualified Pension and Profit-Sharing Plans, 40 Other Retirement Plan Options, 41 Social Security Retirement, 42 6. Tax Shelters, 45 At-Risk Limits, 46 Real Estate Investments, 46 Consider the Tax Consequences, 47 Expectation of Profit, 47 Tax Shelter Checklist, 48 7. Real Estate Transaction, 49 Tax Advantages, 49 Buying and Selling Property, 51 Who Should Own the Property? 52 Real Estate Income, 55 Deductions, 55 Record Keeping, 57 Real Estate As a Tax Shelter, 58 8. Write-Offs, 59 Bad Debts, 59 Casualty Losses and Theft, 61 Abnormal Obsolescence and Abandonment, 62 Inventory Write-offs, 63 Involuntary Conversions, 64 Intangible Asset Write-Offs, 64 Organizational Costs, 65 9. Accounting Methods, 67 Cash Accounting, 67 Accrual Accounting, 68 Completed-Contract vs. Percentage-of- Completion Rules, 69 Cash or Accrual Accounting: Other Considerations, 71 The Importance of Record Keeping, 73 10. Documenting Tax Deductions, 75 The Need to Document, 75 The Burden of Proof, 76 Travel and Entertainment, 77 Documenting Other Expenses, 80 Proper Documentation, 85 Subsidiary Accounts, 85 Tax Return Support, 86 Record Retention Rules, 86 11. Taxes and Cash Accounting, 89 Cash: A Tax Control Account, 89 Statement of Cash Flows, 90 Reducing Expenses, 91 Multiple Accounts, 92 Specialized Accounts, 93 Petty Cash Account, 93 12. Investing Fundamentals, 95 Compound Interest, 95 Income Taxes and Inflation, 96 Dividends and Capital Gains, 97 Types of Investments, 98 Finding Investment Advice, 102 Investment Objectives, 103 13. Buying and Leasing Equipment, 107 Advantages of Leasing, 107 The Option to Buy, 108 Rental Deductions, 108 Other Tax Aspects of Leasing, 109 14. Transactions Between Related Parties, 111 Other Related Party Transactions, 112 Consequences of Reallocation, 113 Multiple Corporations, 114 15. Corporate Contributions, 115 Reasons for Making Contributions, 115 Other Contribution Rules, 116 Contribution Strategies, 116 16. Death of Partner or Stockholders, 119 Comparison Between Organizations, 119 Buy-Out Agreements, 121 Consequences of Liquidation, 122 17. Taxpayers' Elections, 125 Extending Filing Deadlines, 125 Amending Tax Returns, 126 Form of Organization, 126 Accounting Methods, 127 Fiscal Year, 127 Depreciation Methods, 127 Auto Mileage, 127 Contributions, 128 Deferrals, 128 Expensing, 128 Inventory Valuation Methods, 128 Retirement Plans, 129 Capital Gains and Losses, 130 18. Tax Planning, 131 Tax Avoidance vs. Tax Evasion, 132 Sound Business Purpose, 132 Tax Avoidance Plans, 133 Interim Statements, 134 19. Filling Tax Returns, 135 Corporate Tax Return 135 S Corporation Tax Return, 136 Partnership Tax Return, 137 Individual Taxation and Schedule C, 138 Supporting Schedules, 139 / Schedule E, 140 20. Getting Professional Advice, 143 Preparing for the Tax Return, 144 Tax Professionals, 146 Special Situations, 146 Periodic Meetings, 147 21. Tax Records You Need, 149 Cash Controls, 149 Accounts Receivable Controls, 150 Inventory Controls, 151 Capital Asset Controls, I51 Accounts Payable Controls, 151 Notes Payable Controls, 151 Other Controls, 153 22. Changing Your Tax Year, 155 The Natural Business Year, 155 Changing Tax Years, 157 Taxes in a Short Year, 158 Ending-Day Methods, 158 Monthly Accounting Alternatives, 159 Fiscal Years and Personal Cash Flow, 159 Tax-Year Selection Strategies, 159 23. The Profit Motive, 161 The Business Purpose, 161 Examples of Intent, 162 24. Deductions, 165 25. Taxable Income, 171 Damages Received Through Legal Action, 172 Other Special Situations, 173 26. Nontaxable Income, 175 Tax-Free Exchanges, 176 27. Nondeductible Expenses, 179 28. Inventories, 183 Recording Inventory, 183 Inventory Valuation Methods, 185 What You Can't Do, 187 Writing Off Inventory, 187 29. Benefits, 189 Common Flows, 190 Basic Rules for Coding, 191 Mid-Year Changes, 192 Timing of Corrections, 192 Tax Considerations, 193 Budgeting Time for Account Analysis, 194 Identifying and Solving Coding Problems, 194 Accounting Entry Classifications and Taxes, 189 Appendix: Tax Publications, 195 Index, 197 Includes: Book By: Michael C. Thomsett Published by: Craftsman Book Company 208 Pages, 8-1/2 x 11 ISBN: 1-57218-006-4 |
