ForConstructionPros.com

As you all know, the economy is still in a funk as far as construction and real estate are concerned. Washington keeps telling us the recession is over, but when I talk to architects, contractors, equipment dealers and banks, they all tell me our industry is showing no signs of improving in the near future. As far as I'm concerned, they are using the wrong word to describe our industry - it is not a recession for us, but a depression.

Speaking to a banker recently, I let him know how his industry got us into this mess. We gave them our tax dollars to bail them out and, in exchange, they still refuse to loan any money for anything that has to do with real estate or construction. The lenders argue that the "credit folks" are running the banks and they have been told to avoid risky deals at all costs. While some banks are in the loan business, even they are avoiding our industry.

That being the case, contractors have to find ways to survive until the work environment improves. Most of you have cut expenses and are working with minimum personnel. You've sold off equipment and other assets to feed your bank balance, and are bidding on anything that will bring in a dollar. But even though you've taken these steps, there a few other situations you have to stay on top of to avoid surprises later this year.

Your tax situation
Believe it or not, you have to know where you stand tax-wise. Needless to say, you don't want to get behind on any taxes you have to pay because the penalties and interest will kill you.

In addition, those of you who own equipment and used the bonus depreciation rules will run out of depreciation deductions faster than your book depreciation reflects. You could wind up with a tax bill even though your books reflect a break-even or a loss. If so, you will not only have to pay the 2009 tax, but also estimated taxes for 2010 based on the 2009 tax. In short, make sure you know where you stand with your tax situation while there is still time to do something about it.