Has your construction client adopted the most appropriate tax accounting method for its company?
A considerable number of contractors have failed to adopt the most propitious method of tax accounting for their companies. Yes, it's true, that those having revenues of less than $1 million annually are on the cash method. But many are unaware of their eligibility to continue using the cash method as long as their revenues do not exceed on average $10 million annually.
What is equally egregious is the number of contractors who have failed to select a method of accounting for long-term construction contracts. The Internal Revenue Service does not restrict companies from adopting more than one method of accounting, and accepts different methodology for long-term contracts.
When cash flow is as important as profitably in these very challenging times for contractors, it is imperative that contractors elect the appropriate methods for its tax accounting, particularly one that maximizes the deferral of its tax liabilities.
The Barefoot Accountant—is a Certified Public Accountant, Certified QuickBooks ProAdvisor, operating an accounting, tax, and QuickBooks consulting firm in Berlin, Connecticut, Accountants CPA Hartford, Connecticut, LLC. Bill has instructed graduate and undergraduate courses in Accounting, Auditing, and other subjects at the University of Hartford, Central Connecticut State University, Hartford State Technical College, and Purdue University. He also taught GMAT and CPA Exam Review Classes at the Stanley H. Kaplan Educational Center and at Person-Wolinsky, and is certified to teach trade-related subjects at Connecticut Vocational Technical Schools. His articles on tax and accounting have been published in several professional journals as well as on several accounting websites. William was born and raised in New Britain, Connecticut, and served on the City's Board of Finance and Taxation as well as its City Plan Commission. Bill is a crazed animal lover, feeding birds, squirrels, chipmunks, skunks, possums, stray cats, and any two-legged or four-legged critter traversing through his yard. His backyard in Berlin, Connecticut has been certified as a habitat suitable for wildlife by the National Wildlife Federation.
Bill also writes an Accounting, QuickBooks, and Tax blog: Accounting, QuickBooks, and Taxes by the Barefoot Accountant. For entertaining articles, please see his listing at The Amazing Brighenti.