Year end tax planning – Contractors should take a strategic approach

Description

Abstract: As 2011 winds down, it’s time for contractors to think about year end tax planning. It’s critical to take a strategic approach, balancing the desire for short-term tax savings against one’s interest in preserving the long-term financial strength of the business. This article discusses timing issues and accounting methods, followed by a look at 2011 tax breaks and the impact that various tax moves may have on lending and bonding relationships. A sidebar shows why bonus depreciation and Section 179 expensing are particularly valuable this year for contractors investing in equipment and other fixed assets.