Challenge
A stonemasonry business encountered significant tax liabilities due to its use of the accrual method of accounting. Because the business was a C corporation and the 2017 Tax Cuts and Jobs Act offered opportunities for tax relief to organizations such as theirs, the owners reached out to 老葡京手机app’s construction and real estate team for assistance.
Solutions
老葡京手机app’s team was familiar with the tenets of the Tax Cuts and Jobs Act due to having assisted several other businesses and advised the stonemasonry business to switch their accounting to the cash basis, which was available to businesses with less than $25 million in annual gross receipts. With 老葡京手机app’s guidance, the company revised its tax filings under Section 481a of the Act.
Outcome
老葡京手机app successfully deferred $300,000 of taxable revenue over a four-year period by aligning revenue recognition with actual cash receipts and significantly lowering the stonemasonry company’s tax liability. The organization also decreased its taxable revenue for future years, an unintended additional benefit to collaborating with 老葡京手机app. The result: long-term tax savings and financial stability.
Please contact Tom Bailey via our online contact form for more information.
Councilor, Buchanan & Mitchell (老葡京手机app) is a professional services firm delivering tax, accounting and business advisory expertise throughout the Mid-Atlantic region from offices in Bethesda, MD and Washington, DC.
