Tax day, April 15, is now less than two months away. Do you have everything sorted out for your contracting business?
On Contractor Magazine’s website, CPA and CFO of Keeping Score Inc. and Norhio Plumbing Michael Bohinc, wrote that new regulations from the IRS are already in effect and could seriously impact this year’s taxes for your business.
One of the reasons that CPAs are so concerned about these final regulations on tangible property is that a business can be caught in a tax trap. How so? A business making a change to comply with the regulations is considered to be making a change in accounting method. This requires consent from the IRS, which means that a Form 3115 must be filed. This means more work for the both the business and the CPA, which means increased costs to the business.
These are far-reaching regulations that will impact virtually every business. How it impacts each business will most often be different so your guidance should come from your CPA not a fellow business owner. If your CPA has not discussed these regulations with you yet, I encourage you to reach out to him or her and ask about them. There are aspects of these regulations that impact not just your tax return but also your financial accounting processes and system. An innocuous accounting policy or procedure performed or changed by someone in the office can cause significant tax problems for the business. Therefore, it’s important that you understand what impact these tangible property regulations will have on your business.
Visit Contractor’s website to read more from Bohinc. Learn about these changes and make any changes necessary before April 15 rolls around.