|
|
|
|
 |
 |
 |
 |
 |
 |
 |
 |
 |
 |
|
|
New Tax Laws Impact Contractors |
Two new laws - the Protecting America from Tax Hikes (PATH) Act of 2015 and the Consolidated Appropriations Act, 2016 - contain provisions that may affect your construction business. These provisions retroactively extend, and in some cases modify, many favorable tax rules that had previously expired. A brief overview follows.
Increase in Expensing Limits The PATH Act permanently extends the increased Section 179 expensing limit, which allows eligible businesses to expense, rather than depreciate, up to $500,000 per year of the cost of equipment and other eligible property placed in service during the tax year. The election is subject to a dollar-for-dollar phaseout as the cost of expensing-eligible property climbs from $2 million to $2.5 million. For taxable years beginning in 2016, these limits are subject to inflation adjustment. For 2016, the phaseout begins at $2,010,000. First-year Bonus Depreciation The PATH Act permits eligible businesses to claim bonus depreciation for qualifying property acquired and placed in service during 2015 through 2019. The available bonus depreciation percentage depends on the year the property is placed in service. The percentage is 50% for 2015 through 2017, 40% for 2018, and 30% for 2019. These percentages apply one year later than indicated (and bonus depreciation will be available through 2020) for certain longer-lived and transportation property. Increase in "Luxury Auto" Limits The PATH Act increases the "luxury auto" dollar limit on depreciation deductions by $8,000 for autos, light trucks, and vans placed in service after 2015 and before 2018. The allowable increases drop to $6,400 for vehicles placed in service in 2018 and to $4,800 for vehicles placed in service in 2019. Energy-efficient Improvements to Commercial Buildings The PATH Act retroactively extends for two years the deduction for qualifying energy-efficient improvements to lighting, heating, cooling, ventilation, and hot water systems in commercial buildings. The deduction now applies to property placed in service before January 1, 2017. Energy-efficient Home Construction Under the Path Act, eligible contractors that construct and sell new energy-efficient residences before January 1, 2017, may continue to claim a credit of either $2,000 or $1,000 per home, depending on the home's projected fuel consumption.
Solar Energy Credits
The Consolidated Appropriations Act extends through 2021 a credit available to business taxpayers for the installation of qualified solar energy property. The available credit percentage is gradually reduced over five years.
Talk to Us The expensing limits and the bonus depreciation rules are complex. We would be happy to clarify how these and other changes may impact your business. Please call.
 Contact: Greg Kenworthy, CPA
608.793.3141
|
Wage Garnishments: Risks and Responsibilities
|
|
With just over 7% of all workers having had their wages garnished,* odds are your business will be asked to garnish the wages of an employee at some point. The primary reasons for garnishment are unpaid child support, tax liens, and student loans/consumer debt. What are your obligations when it comes to wage garnishment? Are there risks to noncompliance?
Overview Generally, when wages are garnished, an employer withholds money from an employee's paycheck and sends these funds to a creditor for the payment of a debt. Since wage garnishments are made by court order or other types of legal procedures, you can't afford to ignore one. Depending on the applicable state law, an employer that fails to withhold garnished amounts may be held liable for the amount of the debt and for possible additional penalties, such as collection costs.
Steps to Take Because of the risks associated with noncompliance, you'll want to have procedures in place to handle wage garnishments properly.
- Determine the Amount To Withhold. The federal Consumer Credit Protection Act (CCPA) limits the amount of a garnishment to a percentage of the employee's "disposable earnings," which is the amount left after legally required deductions are made. Applicable percentages depend on the type of debt being collected. Moreover, if a state wage garnishment law differs from the CCPA, the law resulting in the smaller garnishment must be observed. You may want to consult an attorney to determine the appropriate amount to withhold.
- Respond in a Timely Manner. Promptly contact your payroll department or outside provider, let them know that you have received a wage garnishment order, and provide them with all the necessary information. Begin withholding the required amount from the individual's wages as soon as you receive the order. Continue to comply with the order until notified to discontinue the wage garnishment.
* Garnishment: The Untold Story, ADP Research Institute, 2014 (2013 data)
Contact: Debbie Denny, Advanced Certified QuickBooks ProAdvisor
920.337.4558
|
| Watch Out for Federal Excise Taxes |
The federal government raises additional revenue by imposing excise taxes on certain goods and activities. Generally, if your construction company owns heavy trucks that use the public highways, it is required to pay the federal highway vehicle use tax. Your company may also receive a credit or refund for fuel excise taxes paid on fuel used for certain off-road uses.
The heavy highway vehicle use tax is imposed on trucks and truck tractors if they are: - Highway motor vehicles - defined as vehicles moved by their own motors and designed to transport a load over the public highways, even if the vehicles are designed to do other things
- Registered and required to be registered for highway use
- Used on a public highway, and
- Vehicles with a taxable gross weight of at least 55,000 pounds
The tax applies to the first use of a taxable vehicle on a public highway during the taxable period - July 1 through June 30. If you have a truck that is subject to this tax, you have to pay the tax by the last day of the month following the month in which the vehicle is first used during the taxable period. Fuel Excise Taxes The federal government also imposes an excise tax on various types of fuel. For gasoline, the tax is $.184 per gallon. The tax is $.244 per gallon for both clear diesel fuel and clear kerosene. However, the amount your business pays can be credited or refunded if the fuel is used for off-road purposes. Examples of off-road purposes include using the fuel as heating oil, in stationary engines, in non-highway vehicles, and in separate engines mounted on highway vehicles. When you claim a credit or refund for fuel excise taxes, you'll need supporting records. The records should show the number of gallons used during the period covered by the claim, the dates of purchase, names and addresses of suppliers and amounts purchased from them, the purposes for which you used the fuel, and the number of gallons used for each purpose.
Contact: Charlie Wendlandt, CPA
715.384.1986
|
| Recruiting, Training, and Retaining Veterans |
Construction company owners know that military veterans typically bring skills and a work ethic that align well with what's required of today's construction worker. Veterans have hands-on work experience in fast-paced and highly stressful situations, understand the importance of teamwork, know how to achieve success under pressure, and can demonstrate leadership. Hiring veterans can be a win-win situation for all parties - owners benefit from the unique skill set of veterans and veterans position themselves for a rewarding and satisfying career in the construction industry.
The construction industry, the military, and various nonprofit groups have created programs that can help veterans transition to careers in construction. If you have thought about hiring veterans, here are some points to consider.
Hiring The U.S. Department of Labor's (DOL's) Veterans' Employment and Training Service recommends that employers start by determining employment opportunities and creating job descriptions. Employers should consider such factors as the position's purpose and its overall contribution to the company, the education or experience needed to accomplish the essential functions of the position, and what licenses or certifications, if any, are required.
Some employers may be hesitant to hire veterans because they are unsure how military careers, ratings, and experience translate to meet civilian certification and license requirements. Websites such as www.cool.navy.mil can help employers determine how a veteran's military experience matches up with the skills required for a position in construction.
There are multiple resources that can help employers connect their job openings to job-seeking veterans. Official Wounded Warrior programs are sponsored by each of the five military service branches. Soldier for Life, Hero 2 Hired (H2H), the National Resource Directory, and Warrior Transition Command's Employment, Education and Internships websites are just some of the other vetted resources available to employers.
In addition, the Veterans Administration and many other federal departments offer financial incentives, including federal tax credits and salary subsidies, to employers that hire qualifying veterans.
Training The National Center for Construction Education and Research (NCCER) is a nonprofit organization that develops curriculum and assessments for the commercial construction industry. The U.S. Department of Veterans Affairs has approved GI Bill funding that veterans with military construction training or experience can use to pay for the cost of exams for numerous NCCER journey-level craft and management assessments.
Larger construction companies may want to develop their own training programs to teach veterans specific job skills. And construction companies of all sizes can partner with local community colleges and businesses to help veterans obtain college credit and craft apprenticeships.
Retention Retaining valued and skilled veterans and keeping them engaged is not all that different from retaining other valued employees. But some extra effort on a company's part can go a long way. Experts say that placing a value on military service and finding ways to weave leadership responsibilities into the civilian position can help achieve this goal. So, too, does promoting a veteran-friendly workplace. Developing and promoting vet-to-vet mentorship in the workplace has been identified by the DOL's Veterans' Employment and Training Service as a promising tool for retaining valued veterans in the workplace.
 Contact: Jessica Zych, PHR, SHRM-CP 608.793.3104
|
| Developments in Tax and Business |
Final Rule on Overtime Coming
The U.S. Department of Labor's Wage and Hour Division is expected to issue a final rule in July that would more than double the salary for the white-collar overtime exemption and would automatically update the salary level every year.
2016 Standard Mileage Rate As of January 1, 2016, the IRS set the optional standard mileage rate for the business use of an owned or leased auto (including vans and pickup or panel trucks) at 54� per mile. This is 3.5� lower than the 2015 rate. Construction Employment Increases The U.S. construction industry added 45,000 net new jobs in December 2015 and 128,000 during the fourth quarter of 2015, according to data from the U.S. Bureau of Labor Statistics. IRS Audit Rates The IRS audited less than 1% of the nearly 147 million individual returns in fiscal 2015, the lowest rate in a decade. However, the agency audited nearly 2.6% of returns with more than $200,000 of income.
Contact: Jeff Tillema, CPA 608.793.3128
|
|
|
|
 |
 |
 |
 |
 |
 |
 |
 |
 |
 |
|
|
|
|
|
