With the 2018 tax deadline behind us, it’s sometimes helpful to take a deep breath and review the impact the new tax law will have on next year’s filings. The new administration ushered in sweeping changes as it relates to federal tax laws, impacting businesses and individuals alike. Keeping up with these changes can be a challenge, so let’s see if we can untangle some of them together.
If you work in an accounting capacity for a construction or subcontractor business, it’s important to stay on top of the changes that affect withholding. From the elimination of personal exemptions to the increase in the standard deduction, 2018’s new tax laws represent a significant shift from prior years. Fortunately, construction software exists that can help manage these changes and cut down on the paper trail.
For now, let’s review what changes will affect your company’s 2019 filing, as well as the ways in which technology tools can help make adapting to those updates less burdensome.
The Upshot: Mostly Good, Some Not-So-Good
Several of these changes affect the construction industry directly. Many of the changes are for the better, giving companies more flexibility and a greatly reduced corporate tax rate. Some of the key changes are broken out below:
There are numerous other changes, many of them yielding improvements for contractors and subs of every size. At the same time, experts advise that your company should have a clear understanding of not only the benefits, but also ways in which it could be hurt by the tax law update.
Industry Sees Growth Potential as a Result
Following the passage of The Tax Cuts and Jobs Act, Associated Builders and Contractors (ABC) President and CEO Michael D. Bellaman released the statement: “The vast majority of construction companies will benefit from the new 20 percent deduction for qualified pass-through income, bringing the top effective rate to 29.6 percent, down a full 10 points. The rest will feel a boost from the largest corporate rate cut in U.S. history. Changes to various accounting methods will ease burdens for many small contractors and the doubling of the estate tax exemption to $11 million is a big win for our industry’s family businesses.”
The new tax law no doubt found fans throughout the industry, and for good reason. However, the benefits will be difficult to maximize without the right construction accounting software at your fingertips. USI for years has worked with Sage to bring the most cutting-edge accounting solutions to construction managers and subcontractors alike. Tools like Sage 300 Construction & Real Estate puts all your business and project metrics in sharp focus so you can maximize profitability.
The tax law is still newsworthy months later, even with the 2017 tax season in our rear-view mirrors. That’s why you should contact United Solutions for a technology assessment and accounting software overview to ensure you realize maximum benefit of these significant changes.
United Solutions provides unmatched software solutions and support for more than 3,000 clients in the construction, real estate industries. We enable our clients to operate at peak efficiency and maximize their profits.Read More
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