Creation timelines for the standard lorem ipsum passage vary, with some citing the 15th century and others the 20th.
StoneBuild Construction, operating primarily in commercial building, faced fiscal inefficiencies despite its substantial gross revenue. In 2023, with earnings of $5 million, StoneBuild engaged Vertex Tax Planning for a comprehensive financial strategy overhaul.
Vertex’s thorough assessment identified underutilized tax deductions and credits. They also pinpointed outdated depreciation methods applied to StoneBuild’s assets.
Implementation of Tax Strategies - Vertex's strategic modifications included:
Immediate Expensing of Equipment: StoneBuild regularly invested around $200,000 in tools and equipment. Vertex transitioned these expenses from capital investments to immediate expensing under IRS Section 179, offering an immediate tax relief. - Employee Training Deduction: The introduction of a $50,000 training initiative for employees on new construction technologies and safety protocols was classified as a fully deductible business expense, enhancing employee skills while reducing taxable income.
Renewable Energy Incentives: By integrating solar panels in their construction projects, StoneBuild secured a Renewable Energy Systems Tax Credit of $40,000, a significant boost given the increasing trend towards sustainable building. - Work Opportunity Tax Credits (WOTC): The hiring of five veterans and three long-term unemployed personnel qualified StoneBuild for the WOTC, bringing in an additional tax credit of $24,000.
Accelerated Depreciation on Heavy Machinery: Vertex advised utilizing MACRS for newly acquired heavy machinery worth $1 million. This allowed StoneBuild to claim a 20% depreciation in the first year, as opposed to the standard 10% with straight-line depreciation, significantly reducing their taxable income. - Section 179 for Office Equipment: StoneBuild also acquired new office equipment and technology worth $150,000. Applying Section 179, the entire amount was deducted in the purchasing year, rather than distributing the cost over several years.
The owner, Michael Turner, experienced a substantial 35% increase in his personal take-home pay, directly benefiting from the enhanced profitability of his business.
Encouraged by these results, StoneBuild plans to maintain its collaboration with Vertex Tax Planning, aiming to sustain this financial efficiency and explore future tax-saving avenues.
This case study underscores the vital role of specialized, detailed tax planning for construction companies. StoneBuild's experience shows that with targeted strategies in tax deductions, credits, and depreciation, a construction company can significantly improve its financial performance and positively impact the owner's personal earnings.