For construction companies, tax planning is more than a year-end scramble. With long schedules, retainage, and cash driving day-to-day decisions, contractors look for accepted ways to defer income taxes and keep working capital in the business.
The Business Journals points to a core reality that applies across the trades, including brick, block, and stone work. No two contractors run the same contract mix, and tax deferral strategies follow the work. A construction-focused financial professional needs a clear understanding of the types of projects a company builds, how contracts are structured, and how revenue gets recognized over the life of a job.
One example in the article looks at a residential contractor using the percentage-of-completion method. Under the One Big Beautiful Bill Act, the contractor has the option to elect to treat new projects under an exempt method, such as the cash method or the completed contract method. The article describes this as a way to decouple financial and tax reporting and open the door to deferral opportunities, with tradeoffs that tie directly back to cash flow, timing, and how the business operates.
For percentage-of-completion taxpayers, the article also highlights the 10% method. This one-time election allows a contractor to defer gross profit on any project that is less than 10% complete at year-end. Over time, that deferral keeps more capital available for active jobs and business priorities.
The main takeaway is straightforward. Effective tax planning stays tied to project timing, contract mix, and cash flow demands, and it gets revisited regularly as goals change. For mason contractors, that starts with clean job tracking, clear snapshots of percent complete as year-end approaches, and early decisions on how new contracts get treated for tax purposes.
Read the full, original article from The Business Journals here.