Tax Season 2021

Following the unprecedented events that took over 2020 and part of 2021, many transportation businesses are still struggling with the outcome from the COVID-19 pandemic.

Last year was difficult for transportation companies. Contractors depleted their backlogs quicker than they could replenish them. Do you want to close out 2021 in the best financial position? It’s time for tax planning!

Key Tax Provisions for 2021 Planning

While the new legislation is bringing helpful tax provisions for struggling companies, the passaging of such legislation is far from certain. Understanding several provisions under the current tax law can help contractors plan for 2021. These include the Coronavirus Aid, Relief, and Economic Security (CARES) Act and older tax provisions that companies often overlook. Have your financial specialist guaranteed you are taking full advantage of these provisions? Reach out they have not. I’d be happy to provide you with free guidance.

Tax Credits and Deductions

Several tax credits and deductions could help reduce your tax liability. For example, contractors that paid excise tax for fuel used on auxiliary power units, reefer trailers, yard trucks, forklifts, and other equipment may be eligible to claim a fuel tax credit on Form 4136. Texas also offers a fuel tax credit, but you must file a separate form from your income tax return.

Property improvements

Remodeled a building? The designation of Qualified Improvement Property (QIP) is eligible for Section 179: any improvement to an interior portion of nonresidential real property if placed in service after the date the original building was first placed in service. Any enlargement of a building, elevators, escalators, or internal structural framework are not included in the QIP.

While the smart move is to consult tax and accounting experts in order to address the situation that is unique to your business, these are some basic talking points that can help you kick-start your 2021 financial goals. Feel free to reach out if you need free guidance to implement these tax strategies: