As the 2025 tax fiscal cliff approaches, construction
companies face critical changes that could significantly impact their bottom
line. Depending on any changes made by the new administration, the expiration
of key provisions from the Tax Cuts and Jobs Act (TCJA) will result in higher
tax rates, reduced deductions, and more complex filings. HLB Gross Collins
understands the unique challenges faced by contractors—projects spanning
multiple years, high material costs, and fluctuating cash flow. These changes
don't have to catch you off guard. With proactive planning, you can mitigate
these impacts and position your business for continued success.
One of the biggest changes affecting contractors is the
phase-out of 100% bonus depreciation, which has been a cornerstone for managing
capital expenditures. As this benefit disappears, paired with stricter §163(j)
interest expense limitations, construction companies will need to rethink their
capital investments and financing strategies. Another pressing issue is the
reduction or elimination of the §199A pass-through deduction, which could
substantially increase the effective tax rate for small and medium-sized
construction firms. Add in the complexity of multi-state tax compliance, and
it's clear that navigating this new landscape requires expert guidance tailored
to the construction industry.
HLB Gross Collins specializes in helping contractors prepare
for tax challenges. Whether it's accelerating capital purchases, conducting
cost-segregation studies to maximize current deductions, or devising strategies
to manage state-specific tax burdens, our team of experts will craft a
customized plan to protect your profitability. Don't let the fiscal cliff
derail your business—HLB Gross Collins can be your trusted advisor in
navigating these changes. Consult with your HLBGC representative to ensure that
you are prepared for the coming changes or contact the author of this article, Alex West.