How to Determine the Best Accounting Software for your Construction Company

invoice business flat lay

Changing your construction company accounting software may be stressful, time-consuming, and costly. However, making a switch to the right accounting software may help:

  • reduce manual work,
  • double tracking of jobs, and
  • help your construction company processes flow more smoothly.

Before committing to a new software package, a construction company should consider the following:

New Limit on Deductions for Business Interest Expense

The Tax Cuts and Jobs Act (TCJA) imposes a new limitation on deductions for business interest expense. This is a permanent change for tax years beginning in 2018 and beyond. Will your business be affected? Here is what you need to know.

 

To Elect Out … Or Not?

Qualifying real estate and farming businesses that elect out of the interest expense limitation must use the ADS to depreciate certain assets. Using the ADS results in lower annual depreciation deductions, because the ADS depreciation periods are longer than the depreciation periods under the regular MACRS rules that usually apply.

Understanding Local Sales Tax for your Minnesota Hospitality Business

Coffee shop front desk

As a general rule, local sales tax should be charged to customers on all sales made in a local taxing area. The local tax applies to anyone who is from outside the city or county and picks up items in the local area for business or personal use. This applies even if the customer takes the items outside of the local tax area.

 

Exemptions

Do not charge local sales tax on sales of taxable items when:

  • You receive a completed Form ST3 – Certificate of Exemption.

  • You ship or deliver the items to your customer outside the local area.

Construction Industry: What you Need to Know About Employee Benefit Plan Audits

paperwork between two people

Is your construction company required to undergo an employee benefit plan audit? This audit is required under federal law to ensure the plan’s functions, operations and processes are in compliance with established regulations. Unfortunately, these audits do not always go smoothly because the plan sponsor does not always understand the documentation, information and financial statement requirements for the audit. To help construction companies streamline the employee benefit plan audit process, Smith Schafer has provided a list of steps below to help companies prepare.

 

South Dakota v. Wayfair: Online Sales Tax Decision

person browsing the internet on computer

In the recent landmark South Dakota v. Wayfair, Inc. case, the U.S. Supreme Court struck down the physical presence nexus standard established in the 1992 decision Quill Corp. v. North Dakota. This means states can require certain retailers, with no physical presence, to collect and remit the applicable sales or use tax on sales delivered in locations within their state.

The decision removes a major barrier to online sales taxation, but the U.S. Supreme Court stopped short of formally declaring South Dakota’s law, which many states have mimicked, is valid in the absence of Quill. The U.S. Supreme Court made clear Quill is no longer a required part of any commerce clause test to determine when states may impose taxes. 

C Corporations - Tax Reform Affecting Tax Planning

One of the biggest changes under the Tax Cuts and Jobs Act (TCJA) is the permanent installation of a flat 21% federal income tax rate for C corporations for tax years beginning after 2017. The new 21% rate applies equally to personal service corporations (PSCs). (Under prior law, PSCs were taxed more heavily than other C corporations.)

This is great news if you own or manage a C corporation, including a PSC. Here are specific tax planning considerations for these entities under the TCJA:

Succession Planning for Family-Owned Hospitality Businesses: 5 Questions to Ask Yourself

Baby boomers privately-own more than 12 million businesses in the U.S., with many of the owners approaching their mid-70s, according to California Association of Business Brokers. A 2016 survey of small businesses in the U.S. indicates, 72 percent of small business owners DO NOT have an exit plan from their businesses and of those, 54 percent intend to leave the workforce in 10 years.

Business owners are focused on growing their companies and often forget to think about their exit strategy from their business. Do you know where your family-owned hospitality business is headed? Building a thriving hospitality business takes a lot of hard work and succession planning is vital to ensure the continued evolution, growth and promotion of leaders.

Benchmarking: Electrical Industry

illuminated light bulb

It is estimated, over 211,000 electrical companies exist across the nation and over 92% of those have less than 10 employees. Although most are small in size, the combined revenue generated by these companies was over $164 billion dollars in 2017. With the low number of employees, along with the minimal property and equipment required to be successful, the industry has seen an increase of companies entering the market.

Good News: Revenue is expected to grow within the industry at roughly 3.5% annually over the next five years. However, with price-sensitive consumers awarding work, often, to the lowest bid, an electrical company’s growth opportunities continue to be tied to their ability to increase margin on jobs by controlling costs.

Start-up Insights for New Breweries: Q&A session with Able Seedhouse and Brewery

brewery bartender pouring tap beer

Able Seedhouse and Brewery is located in Logan Park, Northeast Minneapolis. They brew a wide range of ales, with a highlight on the grains. They literally, and figuratively, started by planting one seed. That one seed turned into many. They are actively working to grow the seedhouse within their brewery, which includes working with local farmers to grow small grains and malting. 

5 Common Succession Planning Problems

business planning paperwork

Succession is inevitable in a business. When the time comes to start thinking about retiring and/or transferring ownership, it is essential to understand common issues related to the process. When a closely-held business owner is asked about their succession plan, it is often a topic that receives little thought, due to the amount of time consumed with day-to-day operations. Every business owner has an emotional and financial investment in their company and often times, is reliant on the proceeds from their investment to fund retirement. The earlier an owner can design a succession plan in their career, the smoother it will make the transition and maximize the financial rewards.

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