Do I qualify for the new 2005 business deduction?
Not limited to manufacturers…
by Lisa E. Cotanch, CPA

Syracuse, NY - February 17, 2006 - The new domestic production activities deduction that starts in 2005 is not limited to only manufacturers. Businesses engaged in manufacturing and certain other production activities in the United States may be eligible to take a new deduction. The deduction is 3% (6% for years beginning in 2007, 2008 and 2009) of the lesser of qualified production activities income or taxable income.

In order to qualify for this deduction, you must have gross receipts that are derived from:

A. The lease, rental, license, sale, exchange or other disposition of 1) tangible personal property, 2) any computer software or 3) sound recordings that was manufactured, produced, grown or extracted by the taxpayer in whole or in significant part in the United States.

B. The sale, lease, rental, exchange or other disposition of 1) any qualified film produced by a taxpayer or 2) electricity, natural gas or potable water produced by the taxpayer in the United States.

C. Construction performed in the United States.

D. Engineering or architectural services performed in the United States for construction projects in the United States.

If you have gross receipts from any of the above, it may be worth taking the time to calculate this deduction.

As with any business decision, you should consult with your tax advisor. If you would like more information on this issue, please contact Lisa Cotanch at (315) 701-6333 or at lcotanch@GreenSeifterCPAs.com.

Green and Seifter CPAs offers a wide array of professional services spanning decades of experience in the areas of accounting, auditing, bookkeeping, financial planning, fraud, and taxation to individuals and businesses throughout Central New York.

To learn more about the services we provide, please link here.  Or, if you would like to speak directly to one of our professionals, please contact us at 315-422-1391.