Are you a contractor using the wrong construction tax accounting method? Are you a contractor with annual gross revenues of $10 million or less and you have not chosen the cash method of accounting as your general tax accounting method and the completed-contract method of accounting for the tax accounting of your long-term construction contracts?
If you have not, why not? The cash method of accounting recognizes taxable income upon its receipt, not upon it being earned. Typically there is a time lag between the two, offering you the opportunity for deferral of your taxes.
Similarly, the completed-contract method of accounting allows you to defer recognition of taxable income on any long-term contracts until their completion rather than over the course of their completion.
So if you are not employing both of these methods of tax accounting and you are a small contractor with revenues of less than $10 million per year, ask yourself, why?
For more information on taxation and accounting of construction contractors, please see the article, Taxation of Construction Contractors: Tax Accounting Methods of Contractors.