Varney Agency

Tax Considerations for Bonding

Ready for tax season? Our Bond department can help.

Whether you like it or not, tax season is here, and with it comes important decisions about your tax liability. Minimizing taxes is a common goal all businesses share. But for those in the construction industry, it is not that simple, at least not for companies with a bond program.

The dilemma that faces many contractors is the classic battle between minimizing taxes and maximizing retained earnings. This is a difficult choice, and the decision comes down to the individual. The key is managing the expectations of those you will be providing your financial statements to. Work with your bond agent to prepare the bond company of what they can expect and get feedback on what they’d like to see. Are you looking to do larger jobs or a larger backlog this year? Are the underwriting guidelines tightening or loosening at your bond company? Are your year-end results consistent with the interim financial provided? These are all topics that should be considered and discussed with your bond agent as you prepare your financial statements.

Remember, the most important role of a bond agent is to streamline communication and expectations between contractors and their bond companies. If you are looking to expand your business, whether you are looking for your first bond or expanding an existing program, give us a call and we will work with you and do everything we can to help your business grow.

For more information, reach out to your local bond agent today: | 877.947.8637