Menlo Park Attorney Discusses Huge Tax Deductions Available for Contractors and Engineers

Since 2005, certain companies are allowed to take a deduction equal to 3% to 9% of their net income for building and renovation of residential and commercial properties.  I’m talking about construction, engineering, and architectural companies that were hired by a homeowner or business owner to construct or renovate a home or building.  If you fall within this category, you want to make sure your accountant took this incredibly valuable deduction.

This is called the Domestic Production Activities Deduction.  A business engaged in a qualifying production activity is eligible to take a tax deduction of 3% in tax years 2005 and 2006. The deduction increases to 6% in year 2007, and goes up to 9% in year 2010.

Here are the “qualified production activities” eligible for claiming the deduction under Internal Revenue Code Section 199:

• Manufacturing based in the United States,
• Selling, leasing, or licensing items that have been manufactured in the United States,
• Selling, leasing, or licensing motion pictures that have been produced in the United States,
• Construction services in the United States, including building and renovation of residential and commercial properties,
• Engineering and architectural services relating to a US-based construction project,
• Software development in the United States, including the development of video games.

CHECK YOUR TAX RETURNS NOW!  If your accountant has not provided this deduction to you, ask him/her to amend your returns.  This could be huge dollars in your pocket!

If you would like our firm to help you find more ways to protect your family, business, and real estate, please call us for an appointment today.

650-422-3313