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Federal tax officials this summer are expected to further clarify new tax deductions available to construction companies, says the Construction Financial Management Association. The new deductions kicked in for the first time for 2005 taxes but not all companies are aware of Section 199 of the Domestic Production Activities Deduction, says CFMA. DPAD was part of the American Jobs Create Act adopted by Congress in 2004. On June 1, the Internal Revenue Service and the Treasury Dept. released final regulations that allow more contractors to take advantage of the new, permanent deductions in coming years and specifically include excavation and grading, says Edison, N.J.-based CFMA. Todd Taggard, a partner with accountant Grant Thornton, says the final regulations include companies that perform construction work whether or not the firm is a licensed contractor in a state.
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