Masonry Magazine December 1998 Page. 25
Year End Tax Planning
by Mark E. Battersby
In fact...
few mason contractors really understand that a few simple strategies can help every contractor substantially reduce their taxes
everyone seems to talk about year-end tax planning. However, surprisingly few mason contractors actually realize that planning prior to the end of the mason contractors operation's tax year is the best way to reduce income taxes. In fact, few contractors really understand that a few simple strategies can help every contractor substantially reduce their taxes.
Once again, mason contractors must consider a new tax law when planning any money saving year-end strategies. The IRS Restructuring and Reform Act of 1998, was signed into law this past summer. Its provisions do more than attempt to rein in probably the most unpopular government agency, the IRS, through a ground-up reorganization the most extensive in at least 40 years.
Two of the most important parts of the new Act, in fact, have nothing to do with IRS reform or reorganization at all. First, the Act lowers the holding period for the most favorable capital gains rate from 18 months down to 12 months, creating a wealth of new planning opportunities and, second, the Act's so-called "Technical Corrections" significantly affect many of the initial tax planning assumptions associated with key provisions in last year's Taxpayer Relief Act of 1997 (TRA 97).
The "Taxpayer Bill of Rights 3" another major section in the Act - tackles IRS reform by giving mason contractors a broad array of new rights and protections. The new law also carves out a separate "Electronic Filing Section" which focuses on the increasingly critical role electronic filing plays in tax compliance.
And, finally, to pay for all of these new provisions, the Act adds a #13 billion list of "revenue raisers" that target both individuals and businesses.
Taking full advantage of what our lawmakers envision as a friendlier, less combative IRS, begins with planning, planning now, before the end of the mason contractors operation's tax year. After all, few tax strategies work after the factor after the close of the tax year.
Tax Planning Basics
Employing year-end tax planning to