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The Tax Cut and Jobs Act (TCJA) that was signed in late 2017 made some of the most impactful tax regulation changes and established many new planning opportunities for contractors. For instance, some of these provisions included: changing entity types, accounting methods, new deductions for qualified businesses, new depreciation alternatives, new tax incentives for qualified investments that will need careful review, and proactive planning for CPAs and their contractor clients.

As part of the Coronavirus, Aid, Relief and Economic Security Act (CARES Act), there were many tax provisions that are intended to put cash flow in the hands of individuals and businesses that were impacted by the global pandemic. Read more about the tax planning opportunities under the CARES Act here.

“Income tax planning varies based on the size of a contractor. The TCJA recalibrated the definition of a small contractor, making certain small contractor elections available to more contractors. As the end of the year approaches, make certain that your construction firm is in the best tax position possible.” says Scott Contreras, Assurance Senior Manager.

The CICPAC Tax Thought Leadership Committee has summarized the changes that could impact construction clients for consideration for planning in 2020 and beyond.

These potential changes and considerations are related to:

• Construction accounting methods
• Section 199A
• Opportunity zones
• Excess business losses
• Choosing between S Corp versus C Corp
• NOL changes
• Bonus depreciation changes
• Section 179 changes

To read the full whitepaper, download it here.

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