Construction Accounting Forms
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Limited Liability Companies For Dummies $5.49 What is a limited liability company? How is an LLC different from a corporation? Should you form an LLC for your business? Limited Liability Companies For Dummies, answers all of your questions about LLCs and demystifies the formation and management of these increasingly popular business entities. This clear, concise guide explains the pros and cons of LLCs and shares insider insights on ev… |
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Create Your Own ETF Hedge Fund: A Do-It-Yourself ETF Strategy for Private Wealth Management (Wiley Finance) $32.35 Many investors are intrigued by the profit potential of todayâs hedge funds, but most feel like theyâre on the outside looking in, due to the high investment requirements and complexity of these vehicles. Create Your Own ETF Hedge Fund allows you to break down these barriers and effectively operate within this environment. By focusing on the essential approaches of global macro long/shor… |
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Construction Operations Manual of Policies and Procedures $89.95 Turn a profit on every construction project. An exhaustive, business-boosting reference, Construction Operations Manual of Policies and Procedures, Third Edition, by Andrew Civitello, Jr., is loaded with procedures and step-by-step details for successfully managing construction operations. You get over 300 pages of methods, strategies and tactics, forms and ready-to-copy letters all layed out for … |
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MyInvoices & Estimates Deluxe $39.99 Get paid with speed- use the Avanquest MyInvoices & Estimates Deluxe 10 Software! Simply change invoices to estimates in one click, accept checks, credit cards and ATM/debit cards, and even include a PayPal® link in your email messages to customers…. |
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Construction Savvy Business Forms $49.95 The Construction Savvy Business Forms CS consists of 122 essential forms to keep your business transactions looking professional and organized. Construction Savvy Business Forms come in both Adobe PDF and Microsoft Word format. The Word forms are fully customizable so you can change and/or add information tailoring each form to meet a specific job application. Just add your company name and inform… |
Profit Made Easy with Construction Accounting Software
Effective cost control is vital for any project. What seems like an easy task on the surface is anything but once the project gets going. Project managers need to make financial decisions in real time, and they need to make those decisions based on numbers that they can obtain immediately. Construction Management accounting software makes this possible.
Materials are everything purchased for a project that does not involve labor costs. Accounting software keeps these entries in a separate location as there are different ways that labor and materials need to be accounted for in a profit loss statement.
As mentioned before, labor is kept separately. Labor costs can include payroll, contractor fees and sub-contractor fees. For employees, tax withholdings need to be kept track of as well as health insurance, payroll deductions, retirement withholdings, etc. Contractors are paid in a lump sum with no taxes withheld. So, these need to be kept track of separately. Accounting software has built in features that allow a manager to keep track of all of these things. It may even allow you to export information to a payroll service.
While contractors do not have taxes withheld, they do have to receive a 1099 tax form at the end of the year. Accounting software can also perform this function.
There may also be subcontractors involved. These are people who work at the site but are not under the direct employ of the project manager. They work for one of the contractors that the manager has employed. These expenses have to be recorded separately as well.
Something that makes subcontractors even more difficult to track is that the bill often includes labor and supplies. This makes it difficult to see exactly where the money is going and look for ways to cut costs. With accounting software, a manager can see that X was paid to a subcontractor who poured the foundation. But it also breaks it down into supplies and labor, so that a manager can discern if there is a better price on materials or if the labor cost was inflated.
Most of these tasks can be completed using any type of accounting software. But with construction management accounting software, everything is designed and laid out exactly as needed for a Construction Project. There is no entering of obvious information and formatting the spreadsheet. All you have to do is start entering information specific to your project. Be sure to check out construction accounting software reviews to see everything that this type of software has to offer.
About the Author
Samuel Daggle writes articles for construction and manufacturing businesses that are looking for ways to use construction accounting software to improve their business. Check out his other articles for more information about Construction Software.
Small business taxes on multi-member LLC?
Lets say you are one partner out of a five member family business formed in an LLC. No one really put any money into it, you just started working as subcontractors for bigger businesses (Construction Business). So, all of your books are in order, and you take it all into to a CPA. Your CPA tells you that your books aren’t in proper order and small things that were paid for by one member such as state filing fees (only $125) and business cards ($15-$30) must be accounted for as capital for that member. Your idea was to show no initial investment and just claim those costs as a business expense on your personal taxes. Why is the CPA correct? How does that benefit you? And as a first time small business bookkeeper, how to show capital investment for an individual partner on Microsoft Accounting?
Here is why your CPA is correct:
1. Your LLC is treated as a partnership for federal income tax purposes. Treas. Reg. sec. 301.7701-3(b).
2. When a partner pays for something on behalf of the partnership, it will generally be treated as a contribution to the partnership in the amount of the payment unless, under section 707 of the Tax Code, it is treated as a transaction between the partnership and a partner “not acting in his capacity as a partner.” In this case, however, the expenses were inccurred solely for the benefit of the partnership. Even though it was your intention that all partners have a “profits only” interest in the partnership (hence no capital contributions), the fact that certain partners made effective contributions to the partnership means that the partnership is not “profits only.” This is true even if the expenses were relatively small.
3. Because what you call expenses will be treated for federal tax purposes as contributions of capital in return for partnership interests, this requires adjustment to the books of the partnership so that they accord with the rules of Treas. Reg. section 1.704-1(b)(2)(iv). Partnership books must generally be maintained in accordance with that regulation if allocations of partnership items are to be respected for tax purposes.
4. Under Treas. Reg. section 1.704-1(b)(2)(iv)(b), a partner’s capital account must be increased by the value of any property contributed by a partner to the partnership.
Your CPA is telling you the right thing: the partnership’s books were not in order, and they need adjustment to reflect the fact that certain partners now hold not only a profits interest, but a capital interest. If proper adjustments aren’t made, the entire arrangement could blow up in your face if the IRS were to audit you and the other partners. You should trust your CPA on this one.
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