Month: July 2025

Key Tax Changes in the One Big Beautiful Bill Act (2025)

The One Big Beautiful Bill Act (OBBBA) was signed into law on July 4, 2025, following narrow passage through Congress. Introduced in May 2025, the bill combines major tax reforms with changes to federal spending, building on the 2017 Tax Cuts and Jobs Act and modifying parts of the Inflation Reduction Act of 2022. You may be wondering what these changes mean for you. Below is a brief summary of key provisions that could affect your tax liability in 2025 and beyond.

For Individuals & Families:

• Lower Tax Rates Made Permanent: The reduced individual tax rates from recent years are now permanent, avoiding a scheduled increase after 2025.
• Higher Standard Deduction: The standard deduction is permanently increased (e.g., $23,625 for heads of household, $15,750 for singles).
• No Return of Personal Exemptions: Personal exemptions remain suspended, but seniors (65+) can claim a new $6,000 deduction through 2028, subject to income limits.
• Child Tax Credit Expanded: The child tax credit is now $2,200 per child, with inflation adjustments and stricter Social Security number requirements.
• State and Local Tax (SALT) Deduction Cap Raised: The SALT deduction cap increases to $40,000 ($20,000 for married filing separately) for 2025, with a phase-down for high incomes, before reverting to $10,000 after 2029.
• No Tax on Tips and Overtime (Temporarily): For 2025–2028, up to $25,000 in tips and $12,500 ($25,000 joint) in overtime pay can be deducted, subject to income phaseouts.
• Car Loan Interest Deduction (Temporarily): Deduct up to $10,000/year in interest on loans for new U.S.-assembled vehicles (2025–2028), with income limits.

For Businesses:

• 100% Bonus Depreciation Made Permanent: Businesses can fully expense qualified property immediately, with no scheduled phase-out.
• Section 179 Expensing Limit Increased: The limit for expensing business assets rises to $2.5 million, with a $4 million phaseout threshold.
• Research & Development (R&D) Expensing Restored: Domestic R&D costs can be fully expensed immediately; foreign R&D must still be amortized over 15 years.
• Qualified Business Income (QBI) Deduction Enhanced: The income threshold for phase-in is raised to $75,000 ($150,000 joint), and a $400 minimum deduction is established for active business income.
• Paid Family and Medical Leave Credit Expanded: The credit is now permanent and includes insurance premiums.
• Exception to Percentage of Completion Method for Residential Construction Contracts: The OBBBA expands the exception under IRC §460(e) to include “residential construction contracts,” not just “home construction contracts.”

Other Notable Changes:

• Estate and Gift Tax Exemption Increased: The exemption is permanently set at $15 million (indexed for inflation) for estates and gifts after 2025.
• Charitable Deductions for Non-Itemizers: Above-the-line charitable deduction increased to $1,000 ($2,000 joint) and made permanent.
• Energy Credits Phased Out: Credits for clean vehicles, residential energy, and other green initiatives are mostly terminated after 2025 or 2026.
• Enhanced Reporting Requirements: The 1099 reporting threshold increases to $2,000 (from $600), and the de minimis threshold for third-party network transactions returns to $20,000/200 transactions.

Temporary and Pilot Programs:

• “Trump Accounts” for Children: New tax-advantaged savings accounts for children under 18, with government-funded pilot contributions for newborns (2025–2028).

This is a high-level overview. Many provisions have specific requirements, phase-ins, or phase-outs. Given the scope of these changes, proactive tax planning is more important than ever. We encourage you to contact our office to discuss how the OBBBA may impact your specific situation and how we can help you plan effectively.

Navigating 2025 Tariff Policies: Impacts on the Construction Industry

As of mid-2025, U.S. tariff policies are undergoing significant changes that are reshaping the construction landscape. For contractors, understanding these shifts is important to managing costs, maintaining project timelines, and staying competitive in a volatile market.

Current Tariff Landscape

The U.S. has implemented a series of aggressive tariff increases under the current administration. Key developments include:

• Tariffs on all steel and aluminum imports, affecting structural materials and fabrication costs. The tariffs imposed in April 2025 were increased effective June 3, 2025, from 25% to 50%.
• 25% tariffs on imports from Mexico and Canada, with limited exemptions under the United States-Mexico-Canada Agreement (USMCA).
• Proposed 25% tariffs on copper and lumber, which are still pending but could significantly affect electrical and framing costs.
• 10% tariffs on potash and energy products, indirectly influencing construction through increased fertilizer and fuel prices.

Impacts on Construction Contractors

Rising Material Costs
Tariffs on steel, aluminum, and lumber have raised prices across the industry. These cost increases may result in diminished profit margins, making it harder to stay within budget.

Supply Chain Disruption
Tariffs have disrupted long-standing supply chains. Contractors may face delays in material deliveries resulting in the need to seek alternative sources.

Project Delays and Budget Overruns
With materials harder to source and more expensive, project timelines are likely to stretch. Contractors should build in contingencies for procurement and pricing volatility, as these factors can complicate client negotiations and contract agreement.

Strategic Shifts in Procurement
Many firms are turning to domestic suppliers. While this can reduce exposure to tariffs, it may also introduce new challenges in terms of capacity, quality, and pricing.

What Contractors Can Do

While some tariffs may be temporary or subject to negotiation, the current trend suggests a protectionist trade environment for the near future. Contractors who adapt quickly and build flexibility into their operations will find themselves better positioned.

A way to facilitate this is with a mid-year financial review, which allows management to assess project profitability, cash flow, and budget performance across ongoing jobs as well as the organization. These factors are often impacted by fluctuating material costs and labor availability. With the added complexity of tariffs on imported construction materials such as steel, aluminum, and lumber, contractors face increased cost volatility. A thorough mid-year check-in helps identify where tariffs may be inflating expenses, enabling contractors to adjust estimates, renegotiate supplier terms, or explore alternative sourcing. This proactive approach ensures better financial control, supports accurate forecasting, and strengthens the contractor’s ability to navigate a dynamic and often unpredictable market.

CSB can provide assistance in this area. Please reach out to your CSB contact to discuss questions or concerns.

The tariffs referenced above reflect tariff policy as of July 15, 2025. Tariffs on these goods may vary due to future changes in tariff policy or based on the specific policies regarding the countries from which the goods are imported.

The Benefits of Fractional CFO Accounting Services for Construction Contractors

Running jobs, managing crews, juggling bids, and trying to stay afloat — and then someone asks for a five-year financial projection.
That’s where a fractional CFO steps in. No suits, no fluff — just solid financial expertise, tailored to your business. Whether you are looking to grow, streamline operations, or simply gain a clearer picture of your finances, this might be the smartest move you haven’t made yet.

What is a Fractional CFO?

A fractional CFO is a part-time financial expert who provides strategic guidance — without the full-time price tag. You get the same knowledge and leadership as a traditional CFO, but on a flexible, as-needed basis. For construction businesses trying to grow, stay lean, or just clean up the financial side of things, this model can be a game changer.

Key Benefits for Construction Contractors

1. Cost-Effective Expertise: Fractional CFOs bring seasoned financial leadership at a fraction of the cost of a full-time CFO. This is especially valuable for small to mid-sized construction firms that need expert advice but cannot justify a full-time executive.
2. Cash Flow Management: Effective cash flow management is vital in construction, where project timelines and payment schedules can be unpredictable. Fractional CFOs can assist with optimizing cash flow, preventing financial bottlenecks and enabling smooth day-to-day operations.
3.  Job Costing and Project Accounting: Accurate job costing and project accounting are essential for profitability. Fractional CFOs oversee these processes, ensuring that projects stay on budget and identifying potential issues early.
4. Strategic Planning: Fractional CFOs provide strategic insights that inform key decisions, such as hiring, marketing spend, and contract negotiations. Their experience across various industries offers unique perspectives that can fuel growth and efficiency.
5. Financial Reporting and Analysis: Routine financial reporting and analysis are crucial for understanding the health of a construction business. Fractional CFOs deliver actionable insights that support informed decisions and long-term planning.
6. Access to Capital: Need financing for a large project or expansion? Fractional CFOs help craft accurate financial projections and present them to lenders or investors, improving your chances of securing funding.
7. Compliance and Risk Management: Navigating complex regulatory environments is part of the construction business. Fractional CFOs help ensure compliance with financial regulations and manage risks related to insurance, bonding, and other financial matters.

Fractional CFO services offer construction contractors a flexible, cost-effective solution to their financial management needs. By providing high-level expertise on a part-time basis, these professionals help firms navigate financial complexities, optimize operations, and drive strategic growth. Whether you’re scaling rapidly or tackling complex projects, a fractional CFO can be a powerful ally in achieving financial stability and long-term success.
Below are a few examples of fractional CFO services that Crow Shields Bailey can provide:

• Bookkeeping cleanup and accounting software customization
• Assistance with preparing contract schedule
• Budgeting and forecasting
• Working capital and cash flow analysis
• Evaluating whether to purchase or lease equipment
• Goal setting and key performance indicators

If you’re interested in learning more about how fractional CFO services can benefit your construction business, please don’t hesitate to contact us. We’re here to help you achieve your financial goals and drive your business forward.