While the recent tax law changes have helped to offset the correlated increase in tax liability, companies still have opportunities to save even more tax dollars, as well as produce greater cash flow to fund projects and strengthen their balance sheets.

Contractors might be surprised to learn that language already found in their subcontracts can reduce their immediate liabilities and create a quasi-permanent deferral of taxable income.

Percentage of Completion for Book & Tax Purposes

IRC Section 460, Special Rules for Long-Term Contracts, governs the use of the percentage-of-completion (POC) accounting method to calculate taxable income for contracts not completed within the taxable year.