By the Equipment World Staff
Managing your tax burdens and leveraging tax incentives will improve your cash flow. Keep these suggestions in mind:
1. Double bonus depreciation – full expensing! It’s especially important for fleet owners this year to know lawmakers have extended and doubled bonus depreciation, allowing full expensing for many assets placed into service through 2011. Property qualifying for bonus depreciation that is placed in service after Sept. 8, 2010, and through the end of 2011 will be eligible for full 100 percent expensing.
2. Review deferred compensation plans. Most contractors are struggling to remain profitable in this difficult environment. If your company cannot afford large bonuses to retain key employees, now is the time to revisit alternative compensation arrangements.
3. Certain S corporations should consider taking gains in 2011. If you converted to S corporation status in 2004 or 2005, consider sales of “gain” property in 2011. Special provisions enacted over the last two years provide a reduced seven-year period for sales that take place in 2009 or 2010 and a five-year period for sales of property during 2011.
4. Take full advantage of capital asset expensing deductions. Rules originally intended for small businesses were significantly expanded to allow contractors to expense up to $500,000 of 2010 fixed asset costs, provided less than $2 million of assets were placed in service throughout the year. Unlike bonus depreciation, this applies to new or used assets.
5. Maximize Section 199 deductions. The Section 199 domestic production activities deduction is a unique tax incentive available to most contractors. This incentive allows taxpayers to deduct 9 percent of qualifying production activities, which includes the construction or substantial renovation of domestic real property.
Source: Grant Thornton, LLP, Construction, Real Estate and Hospitality Group. For more tips, visit www.GrantThornton.com/CRHtaxtips
“Our members support clean air, but the air we breathe can’t be more important than the people breathing it.” – Lee Brown, Executive Director, California Dump Truck Owners Association, about the association’s lawsuit against the California Air Resources Board’s Truck and Bus Rule.
33,000
The number of jobs the construction industry added in February, the largest gain in nearly four years.
21.8%
The construction industry’s employment rate in February – more than twice the national average.
– U.S. Bureau of Labor Statistics
Fourth quarter scorecard, articulated haulers
An overview of how many artics, new and used, were financed during the fourth quarter in the past 10 years.
Digital exclusives for April
New products from Absolute E-Z Up, Mahindra, Deister and more.
Weigh in …
Take our poll! Visit www.EquipmentWorld.com and scroll down the left side of the homepage.
Our current poll:
Have you changed your rental strategy for 2011?
Results from last month’s poll:
What are your equipment purchase plans for 2011? (71 respondents)
Purchase new and used — 35%
Purchase new — 24%
Purchase used from dealer — 14%
No plans to purchase — 14%
Purchase used at auction — 13%
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Corrections
In the CONEXPO-CON/AGG Show Planner, polybagged with your February issue, on page 55, the AlturnaMATS product listing mentioned “different thicknesses” for the ground protection mats. The company offers the mats in one thickness.
An incorrect phone number was listed for Tony Neikirk of Okada America. The correct number is (330) 239-2666. Okada hydraulic hammer is pictured at right.
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