Accounting & Tax

Article Dean Dorton Admin

As the 2026 filing season approaches, construction companies nationwide face a tax landscape that is both generous in deductions and more complex. Expanded depreciation rules, new accounting flexibility and long-term certainty for pass-through incentives mean smart planning now can improve cash flow and significantly reduce taxable income.   

Here are the top three tax strategies construction business owners should prioritize this filing season. 

1. Maximize Depreciation and Equipment Expensing 

Construction is a capital-intensive business, and the federal tax code increasingly reflects that reality.  

Why It Matters 

The One Big Beautiful Bill Act (OBBBA) permanently reinstated 100% bonus depreciation for qualifying assets placed in service after January 19, 2025. This allows companies to fully expense heavy equipment, vehicles, tools, and more in the year they’re put into use — instead of over many years. 

At the same time, the Section 179 deduction cap has been increased (e.g., up to $2.5 million, with thresholds beginning to phase out at $4 million in 2025 and indexed for inflation in 2026). This expanded threshold gives many construction firms greater flexibility to expense qualifying purchases immediately.  

Practical Tips 

  • Time purchases carefully: Only assets placed in service by year-end qualify for immediate expensing. Plan deliveries, install schedules, and ready-for-use timing accordingly.  
  • Layer Section 179 and bonus depreciation: Use Section 179 to target specific high-priority assets, then apply bonus depreciation to remaining purchases. This approach is especially effective for large trucks, cranes and heavy machinery.  
  • Don’t overlook technology: Certain software, project management tools and digital platforms may qualify for expensing when properly classified. These deductions not only cut your taxable income but also improve cash flow — money you can reinvest into wages, materials, or expansion. 

2. Leverage Specialized Credits and Accounting Flexibility 

Beyond basic depreciation, construction companies can tap into several targeted tax incentives and accounting elections that reduce liability. 

Key Opportunities 

  • Qualified Business Income (QBI) Deduction: Pass-through companies (LLCs, S corps, partnerships) can deduct up to 20% of qualified business income — and this deduction is now made permanent.  
  • Research & Development Credits: Yes, even construction firms can qualify if they innovate — for example, by developing more efficient building processes, materials, or safety systems. These credits directly reduce tax liability dollar-for-dollar.  
  • Energy-Efficient Building Incentives: Deductions like IRC §179D reward energy-efficient design and sustainable upgrades — but many of these incentives are tightening or set to sunset mid-2026, so acting now is crucial.  
  • Revenue Recognition Choices: Construction accounting methods — such as the completed-contract method versus the percentage-of-completion method — can materially affect when income is recognized and taxes owed. Recent law changes give broader flexibility, especially for residential and multi-unit projects. 

Actionable Steps 

  • Work with a CPA who understands construction: Many tax credits and methods require specific documentation and elections. A specialist helps ensure you capture all eligible benefits.  
  • Evaluate contracts annually: Large projects spanning multiple years can benefit from strategic method elections that defer income or accelerate deductions.  
  • Year-Round Planning: Estimated Taxes and Timing of Income 

3. Being proactive about taxes throughout the year — not just at filing time — can yield major advantages. 

Why It’s Critical 

Construction revenue and expenses often don’t align neatly with calendar years. Seasonal revenues, retainage, project delays, and subcontractor timing can create peaks and valleys that complicate quarterly estimations. Improving how and when you recognize income or deductions can significantly reduce year-end surprises and penalties.  

Strategies That Work 

  • Optimize Estimated Tax Payments: Avoid underpayment penalties and preserve cash flow by forecasting profits mid-year and aligning estimated payments with expected liabilities.  
  • Accelerate or Defer Income/Expenses: If you use cash accounting, deferring invoices until January can delay tax liability, while accelerating deductible expenses into the current year can increase deductions. Always balance with cash flow needs.  
  • Maintain pristine documentation: Timely and detailed bookkeeping — especially job cost tracking — not only simplifies tax preparation but supports every deduction and credit you claim.  

Final Thoughts 

The 2026 filing season isn’t just a deadline — it’s an opportunity. With permanent enhancements to depreciation, expanded deduction thresholds, and renewed incentives like the QBI deduction, construction companies have unprecedented tools to shape their tax outcomes. But these opportunities work best when paired with planning, expert advice and rigorous documentation. 

Start conversations with your tax advisor now — not in March — so your 2025 books are positioned to deliver the best possible results when you file in 2026.  

Contact your Dean Dorton advisor to discuss how these strategies may apply to your construction business and to begin proactive tax planning for the 2026 filing season.

Article Danielle Camara

To increase efficiency, reduce costs, and prevent fraud, the U.S. Department of the Treasury and the Internal Revenue Service (IRS) are moving towards fully electronic payments to and from the IRS. This includes both tax payments and refunds issued to taxpayers.

On March 25, 2025, President Trump signed Executive Order 14247, titled Modernizing Payments to and from America’s Bank Account. In response, the IRS issued new Frequently Asked Questions, explaining how the changes affect taxpayers, particularly during the 2025 filing season. Key takeaways are summarized below in a Q&A format.

Individual Tax Refunds

What’s changing with how refunds are paid?

As of September 30, 2025, the IRS generally has stopped issuing paper refund checks to individuals. Direct deposit will be the primary method for issuing refunds. In limited circumstances, certified payments or paper checks may still be issued if no electronic option is available.

Will the transition delay my refund?

Generally, no. Most taxpayers will receive refunds faster through electronic payments methods.

What happens if I don’t include direct deposit information on my return?

Taxpayers should provide direct deposit information when filing a tax return. If banking information is missing or invalid, the IRS still will process the return and send a CP53E notice by mail to the taxpayer’s last known address on record requesting updated information.

The CP53E notice will instruct taxpayers to visit IRS.gov/your-account to create an account and update their banking information or explain why it cannot be provided.

Once the taxpayer responds, the refund will be issued by direct deposit or paper check, as applicable. If the taxpayer does not respond to the CP53E notice within 30 days, the refund will be released as a paper check after six weeks.

Please note that the IRS will only contact taxpayers by U.S. mail, not by phone or text.

Will the IRS continue to issue paper refund checks to deceased accounts?

Yes. There are no changes to how refunds are issued to deceased individuals.

Payments to the IRS

Can I continue to pay the IRS by check or money order?

Yes, for now. The IRS will continue accepting checks and money orders but plans to transition fully to electronic payments. Over time, paper payments will generally be limited to cases involving hardship or legal requirements.

Do I need special technology to make electronic payments?

Generally, taxpayers only need internet access and a bank account or credit or debit card to pay electronically. The FAQs provide links to various electronic payment options for taxpayers. Visit the Payment Options page on the IRS’s website for more information.

How do I know that my payment was received?

Taxpayers who pay electronically will receive an immediate confirmation number and receipt or a confirmation email that can be saved or printed for their records.

Businesses

Will businesses continue to receive refunds by paper check?

The IRS is working to add the direct deposit option to most business tax return types. Paper check refunds for businesses will be phased out over time.

How can businesses make payments to the IRS?

Review the FAQs or visit the Payment Options page on the IRS’s website for information on payment options for businesses.

Miscellaneous

How will these changes affect international taxpayers?

For now, international taxpayers should continue to use existing options to file returns, make payments, and receive refunds. Wire transfers remain available, and the IRS is working to develop secure alternatives for international taxpayers.

Will these changes affect how I file my tax return?

No. No changes are being made to the way that tax returns are filed. Taxpayers will continue to file their tax returns as usual.

For questions on the IRS’s new electronic payment requirements, please contact Dean Dorton.

Article Dean Dorton

Grant management has changed significantly in the last ten years. What used to be mainly an administrative accounting task is now a strategic skill that affects compliance, funder trust, cash flow, and long-term viability. Nonprofits are no longer just asked to report how grant money was spent afterward, but to manage those funds carefully and openly in real time—often across multiple grants, programs, and funding sources simultaneously.

Yet many organizations still rely on outdated accounting systems that were never designed to address today’s grant management challenges. As expectations increase, these limitations become a significant operational and financial risk.

The New Reality of Grant Oversight

Compliance Is More Complex—and Less Forgiving

Updates to Uniform Guidance, higher audit thresholds, increased cybersecurity scrutiny, and expanded oversight of subrecipients have elevated the standards for compliance. Nonprofits must consistently demonstrate proper controls, accurate cost allocations, and timely documentation. Relying on manual processes and static account structures makes this more difficult, leaving organizations vulnerable not only during audits but throughout the entire grant lifecycle.

Transparency and Real-Time Accuracy Are Now Expected

Funders expect continuous insight into how their funds are used—not just at the end of a grant period but throughout. While formal grant reporting might be done semi-annually or annually, grant drawdowns are often a monthly process, and outdated systems cause the greatest strain and risk during this time.

When finance teams rely on spreadsheets or manual reconciliations to prepare drawdowns, the process becomes slow, error-prone, and difficult to validate. In contrast, real-time visibility into allowable costs, remaining balances, and grant restrictions allows organizations to prepare drawdowns more efficiently and confidently, knowing the data is accurate and up-to-date.

Manual Processes Create Risk Around Cash Flow and Revenue Recognition

Legacy systems often face challenges with one of the most complex parts of grant accounting: revenue recognition for conditional funding, which represents the majority of federal grant revenue. Without the ability to accurately track expenses against grant conditions in real time, organizations risk recognizing revenue too early or too late, leading to compliance issues and inaccuracies in financial statements.

Modern grant management processes help ensure that revenue is recognized properly as conditions are fulfilled, while still clearly distinguishing between restricted and unrestricted funds. Achieving this level of precision is difficult—if not impossible—to sustain in systems that rely heavily on manual workarounds.

The Cost of Standing Still

Organizations that continue to operate on outdated accounting platforms face real consequences:

  • Increased compliance risk due to limited controls and manual drawdown preparation
  • Significant time spent each month preparing grant drawdowns and reconciling data
  • Greater exposure to revenue recognition errors for conditional grants
  • Reduced scalability, making it harder to manage multiple or overlapping grants without adding staff

Over time, these challenges can limit growth, strain finance teams, and hinder an organization’s ability to pursue new funding opportunities.

How Sage Intacct Supports Modern Grant Management

Modern cloud-based platforms like Sage Intacct are designed to support the entire grant management lifecycle—not just reporting at the end. Instead of requiring nonprofits to modify their processes to fit rigid account structures, Sage Intacct uses dimensional accounting to track grants, programs, funders, and restrictions in real time.

With Sage Intacct, nonprofits can:

  • Track grant activity and allowable costs continuously, not retroactively
  • Prepare grant drawdowns more efficiently using real-time, validated data
  • Reduce manual reconciliation by tying expenses directly to grant dimensions
  • Support accurate revenue recognition for conditional grants as expenses are incurred
  • Provide leadership and boards with clear, up-to-date visibility into grant balances and funding utilization

This approach shifts finance teams from reactive cleanup work to proactive grant oversight—reducing monthly effort, improving accuracy, and lowering overall risk.

Organizations that modernize their grant management processes often see measurable improvements. Some have cut grant-related preparation time from hours or days to just minutes, while others have increased their capacity to handle more grants without hiring additional staff—simply by gaining better visibility and control over their financial data.

Modernization Is a Strategic Imperative

In today’s funding climate, the ability to accurately manage grants in real time is essential for mission success. Grant drawdowns, compliance, revenue recognition, and transparency are no longer occasional issues—they are constant operational demands.

Switching to a modern platform like Sage Intacct provides nonprofits with more than just improved reporting tools. It boosts their confidence in data, streamlines monthly processes, and creates a financial foundation that supports growth, compliance, and lasting impact.

See the Benefits in Action

Join us for an upcoming webinar to discover how nonprofits are modernizing grant management to increase real-time visibility, streamline grant drawdowns, enhance revenue recognition, and reduce compliance risks. We will share practical insights and examples of how modern financial systems can better support today’s grant-funded organizations.

Register here: Grant Management in 2026: Why Outdated Accounting Systems Put Nonprofits at Risk

Article Danielle Camara

The One Big Beautiful Bill Act (OBBBA), passed in July 2025, introduces changes to tax regulations that significantly affect real estate investors. One of the most important changes is the restoration of 100% bonus depreciation, making cost segregation studies an even more compelling tax strategy. 

What is a Cost Segregation Study and Why Consider It?

An investor can use a cost segregation study to allocate the basis of real property into specific asset classes, allowing for accelerated depreciation deductions for certain asset classes. In fact, any qualified improvement property or personal property will be eligible for 100% bonus depreciation, making it deductible in the year the property is purchased and placed in service. This includes building components and land improvements such as flooring, windows, fencing, and sidewalks. 

Quantifying the Impact

The example below illustrates the tax benefit of depreciation using a cost segregation study for a taxpayer who acquires a $3 million commercial property in 2025.

Tax Benefit without Cost Segregation:

  • Land allocation: $600,000 (not depreciable)
  • Entire building: $2,400,000 – depreciated over 39 years
  • Annual depreciation: $61,538
  • First-year tax benefit (37% bracket): $22,769

Tax Benefit with Cost Segregation and 100% Bonus Depreciation (Restored by OBBBA):

  • Land allocation: $600,000 (not depreciable)
  • Building allocation: $1,800,000 (39-year depreciation = $46,154 annually)
  • Qualified improvements identified by study: $600,000 (immediately deductible)
  • Total first-year deductions: $646,154
  • First-year tax benefit (37% bracket): $239,077

The restoration of 100% bonus depreciation and a cost segregation study transforms a $22,769 first-year tax benefit into a $239,077 benefit, more than tenfold increase. This example demonstrates how investors can accelerate depreciation deductions, reduce their tax liability, increase cash flow, and enhance overall return on investment.

Considerations in Advance

Before initiating a cost segregation study, taxpayers should evaluate their specific tax position and property characteristics to determine the eligibility and potential tax savings. They should also gather available property documentation, including recent appraisals, site maps or surveys, closing documents at time of purchase, and architectural or construction plans. 

Eligible Properties

Properties that are eligible for depreciation are eligible for cost segregation studies, including both residential and commercial properties. While this strategy can be applied broadly, it proves most effective on larger projects since the expected benefit correlates to the total cost of the project.

Timing the Study

Taxpayers can initiate a Cost Segregation Study at three key phases:

  • When purchased or constructed: Investors can commission a study on a newly acquired or constructed property. The study should be completed prior to the filing of the tax return for the year the property was placed in service, allowing for depreciation of the various components according to the classifications as set out in the study.
  • Retroactively: Investors can perform a study on properties placed in service in prior years. However, this requires filing a Form 3115 to claim the depreciation that would have been allowed. Note that bonus depreciation rates were less than 100% in 2023 and 2024, diminishing the benefits. 

In Summary

A cost segregation study is a strategic tax planning tool that allows real estate investors to accelerate depreciation deductions, resulting in significant tax deferrals and increased cash flow, particularly in the early years of ownership. It is especially valuable for newly constructed buildings, renovations, or acquisitions, and may also be applied retroactively. By front-loading depreciation, businesses can reinvest savings, improve ROI, and enhance financial performance.

To explore the applicability of this strategy to your specific situation, please contact Dean Dorton’s real estate team.

Article Danielle Camara

The Financial Accounting Standards Board’s ASU 2025-10 introduces authoritative guidance for accounting for government grants received by business entities—a first for U.S. GAAP. Historically, companies relied on analogies to IAS 20 or not-for-profit models, creating diversity in practice. This update aligns U.S. GAAP with international standards, enhancing transparency and comparability.

Under ASU 2025-10, a grant is recognized only when it is probable that the entity will (1) comply with the grant’s conditions and (2) receive the funds. For income-related grants, amounts may be presented as other income or as a reduction of the related expense.

Effective Date:

  • Public business entities: Annual periods beginning after December 15, 2028 (including interim periods).
  • All other entities: One year later, after December 15, 2029.
  • Early adoption permitted

For additional details on ASU 2025-10 or questions about your grants, please reach out to the Dean Dorton Life Science Team.

Article Danielle Camara

It’s January, the start of a new year. 2026, let’s go!

If you’re a business leader, board member, department manager or simply an intentional go-getter, you’re wrapping up your goals for the year ahead.

You’ve reviewed 2025. You’ve celebrated your wins and learned from your losses. Now, 2026 is poised to be amazing.

Your whiteboard is full of ideas and plans for the year. You’ve even used three different colors to prioritize initiatives. You asked ChatGPT to evaluate your plan and subscribed to the premium version because you only want the best from your AI buddy. You built forecasts in complicated spreadsheets, even learning how to link cells between sheets. You figured out Canva so you could launch a marketing campaign, and dang it; your circles and squares look pretty good. Last night, you sent the team an invitation to the 2026 kickoff summit, scheduled for this Friday at a venue you haven’t secured yet.

2026 is going to be awesome! But let’s pause for a moment and make sure the house is in order.

Ask yourself:

  • Do you have a process to track and measure all this success?
  • Is your accounting function, including your team, software, and processes, ready?
  • Are your financial reports aligned with your 2026 initiatives and goals?
  • Will you be notified promptly if operations are not going as planned?
  • Can you tell if you’re winning or losing with a quick glance at your financial dashboard?

If you answered “no” to any of these questions, you may not have the accounting infrastructure needed to support your plans for 2026.

Yes, adding accounting to a conversation about goals can feel like a box of New Year’s fireworks that fizzles instead of explodes. But if you want your business to explode in a good way rather than fizzle in 2026, your accounting function needs to be in order.

That’s where Dean Dorton’s Accounting and Financial Outsourcing (AFO) services come in. We handle your accounting so you can stay focused on achieving your organization’s goals.

Our team of accounting professionals uses cloud-based technology to manage your accounting processes, which may include:

  • Recording vendor invoices
  • Vendor payments
  • Customer invoicing
  • Cash flow forecasting
  • Month-end close
  • Customized reporting and dashboards
  • Collaboration with tax preparers
  • Budgeting
  • Key performance indicators
  • Insights from a 600-person accounting and advisory firm

You have a plan for 2026 to be an exceptional year. Don’t let your accounting function become an obstacle. Let us be the partner that ensures your accounting is an asset in pursuit of your goals.

My name is Justin Hubbard, and I am the director of the Accounting and Financial Outsourcing team at Dean Dorton. I would be thrilled to discuss your plans for 2026 and how we can help support them.