Interested in training for your team? Click here to learn more

Minimizing Tax for Construction Contractors: Choosing an Accounting Method, Tax Credits, Depreciation

Percentage of Completion, Completed Contract, 10% Deferral Election, Small Business Exceptions

Note: CLE credit is not offered on this program

A live 110-minute CPE webinar with interactive Q&A

This program is included with the Strafford CPE Pass. Click for more information.
This program is included with the Strafford CPE+ Pass. Click for more information.
This program is included with the Strafford All-Access Pass. Click for more information.

Thursday, May 1, 2025 (in 13 days)

1:00pm-2:50pm EDT, 10:00am-11:50am PDT

or call 1-800-926-7926
Add to your calendar

This webinar will detail key tax considerations for construction contractors. Our panel of veteran construction advisers will review accounting method choices and eligibility for the cash vs. the accrual method, accounting for long-term contracts, and exceptions to the long-term contract rules, as well as income tax credits and deductions available for construction businesses.

Description

IRC Section 460 requires taxpayers to account for long-term contracts using the percentage-of-completion method to recognize revenues and related costs. However, there are many exceptions available that can be tax-advantageous for contractors. These exceptions include qualifying home construction and small contractors.

Reg. Section 1.460-4 contains a list of permissible methods for long-term contracts, including the completed contract method. Eligible taxpayers can defer revenue recognition until a contract is at least 95% complete. Selecting the appropriate accounting method can substantially reduce a contractor's tax liability.

In addition to accounting methods, contractors can significantly reduce their tax burden by taking advantage of existing tax credits. Construction businesses that have developed new processes or improved efficiency could qualify for the R&D credit. Qualified contractors can benefit from the 179D deduction for design work on certain government and nonprofit facilities. Tax advisers working with construction contractors need to know the tax benefits available for these builders.

Listen as our panel of qualified construction experts points out tax-saving opportunities for construction businesses.

READ MORE

Outline

  1. Minimizing Tax for Construction Contractors - Introduction
  2. Accounting methods
    1. Cash vs. accrual
    2. Small contractor exemption
  3. Contract accounting methods
    1. Long-term contracts
      1. Defined
      2. Percentage-of-completion method
      3. Look-back method
      4. 10 percent deferral election
    2. Exceptions to IRC Section 460
  4. Tax credits
    1. R&D
    2. 179D
    3. Other credits
  5. Depreciation, bonus depreciation, and Section 179 deductions
  6. Other considerations

Benefits

The panel will cover these and other critical issues:

  • Which taxpayers are required to utilize the percentage of completion method to recognize revenue
  • When construction contractors should consider using the completed contract method
  • How R&D credits offer tax savings to construction businesses
  • How small businesses and home builders can benefit from and qualify for accounting method exceptions

Faculty

Kim, Hong
Hong Kim
Director
PwC US

Mr. Kim is a Director, Washington National Tax Services at PwC.

 |  Read More
Pitzen, Mary Jo
Mary Jo Pitzen
Principal
CliftonLarsonAllen

Ms. Pitzen has over 15 years of experience providing tax compliance, consulting, and advisory services with a...  |  Read More

Warner, Alex
Alex Warner
Principal
CliftonLarsonAllen

Mr. Warner has 15 years of experience providing compliance and consulting services to professional service...  |  Read More

Attend on May 1

CPE credit processing is available for an additional fee of $39.
CPE processing must be ordered prior to the event. See NASBA details.

Cannot Attend May 1?

CPE credit is not available on downloads.

CPE On-Demand

See NASBA details.