Tuesday, September 12, 2023
As a custom home builder, you've worked hard to establish a successful business, delivering high-quality homes and earning a reputation as a leader in your community. However, when it comes to taxes, many builders often find themselves overpaying due to missed opportunities and lack of expert guidance. In this blog post, we will explore industry-specific tax credits, deductions, and incentives available to custom home builders, emphasizing the importance of working with a knowledgeable accountant like Remote CPA. By leveraging their expertise and staying informed, you can maximize tax savings and financial advantages, allowing you to focus on what matters most: growing your business and delivering exceptional homes.
The Benefits of an Accountant Who Understands Your Business
Imagine having an accountant who is intimately familiar with your entire business operations, someone who can proactively identify opportunities for tax savings and guide you throughout the year. This is the level of service that Remote CPA provides. Unlike traditional tax preparers, who may only glance at your BuilderTrend file or financial statements, Remote CPA takes a comprehensive approach, ensuring all maximum tax deductions are claimed without burdening you with endless requests for information. With their expertise in custom home building, they can help you navigate complex tax regulations and ensure you don't miss out on valuable deductions and incentives.
Uncovering Hidden Deductions
One common scenario that many home builders face is missing out on deductions simply because they were unaware they could claim them or because the deductions were not properly entered into their accounting system. To maximize your tax benefits, ask yourself the following questions:
1. Is all of your mileage entered? Deducting business-related mileage can significantly reduce your taxable income.
2. Do you maintain a primary administrative office at home? If so, you may be eligible for home office deductions.
3. Have you used any personal assets for your business? You may be entitled to reimbursement for business use of personal assets.
4. Has anyone in your family been working for you throughout the year? Hiring family members can have tax advantages, such as income shifting and deductible wages.
By working closely with Remote CPA, you can ensure these deductions are properly identified and claimed, reducing your tax burden and increasing your bottom line.
Structuring Your Business for Maximum Tax Advantage
As your income surpasses $60,000 per year, it becomes essential to consider an S-corp election if you're still operating as a sole proprietor or single-member LLC. Making this business move, which is relatively straightforward, can lead to substantial tax savings. An S-corp election allows you to retain your tax IDs and payroll setup while potentially saving tens of thousands of dollars each year. Additionally, it ensures that you put yourself on a reasonable salary, accounting for your time appropriately. It's crucial to note that some home builders make the mistake of putting themselves on payroll when they are a sole proprietor or single-member LLC, which can lead to complications. If discovered, the IRS could require you to amend prior year returns and file for a refund of all withholding, resulting in wasted time and unnecessary tax preparation fees.
Employee Retention Credit: Untangling Complexity
The Employee Retention Credit (ERC) is another valuable incentive for home builders. However, calculating the credit can be challenging, and many ERC providers offer incorrect information or oversimplify the eligibility criteria. Remote CPA stays informed and ensures accurate assessment of your eligibility for the credit. They can guide you through the complex process and, if necessary, help you amend prior year tax returns to take advantage of this credit. It's important to note that some ERC eligibility deadlines begin expiring as early as April 2024. By subscribing to Remote CPA's newsletter, you can stay up to date on changing tax issues and make informed decisions for your business.
The Importance of Professional Expertise
Congress and the IRS frequently introduce new tax laws and legislation. Despite their efforts to communicate changes, there is often a lack of information, and misinformation can circulate on various platforms. It's crucial to have a trusted professional like Remote CPA who stays ahead of the curve, ensuring you don't miss out on tax deductions or pursue ineligible opportunities that could lead to costly IRS audits. Remote CPA's commitment to providing accurate, up-to-date information and personalized service will give you peace of mind and allow you to focus on what you do best—building exceptional custom homes.
As a custom home builder, navigating tax incentives and deductions is essential for maximizing your financial advantages. With the expertise of Remote CPA, you can unlock substantial tax savings and ensure compliance with ever-changing tax regulations. By partnering with a knowledgeable accountant who understands your business and guides you throughout the year, you can avoid costly mistakes, seize opportunities for deductions, and confidently grow your profitability. Reach out to Remote CPA today to rectify any tax-related concerns and take your custom home building business to new heights.
CEO Of Remote CPA
With over a decade of experience, Jon was the founding member of Remote CPA back in 2017 and has been working with BuilderTrend since 2018. Prior to that, he was employed in Corporate Financial Reporting after spending time in Big Four public accounting. His Accounting degree is from Krannert School of Management at Purdue West Lafayette.