Directing your attention to indirect costs – Their profitability impact is considerable
Abstract: The potential impact of indirect costs is considerable. If contractors don’t stay on top of them, they can creep up over time and drag down profitability. This article lists examples of indirect costs, and how their treatment for tax purposes depends on the nature of a contract and the company’s accounting method. It also offers suggestions for reducing indirect costs. A sidebar discusses two depreciation-related tax breaks that are particularly valuable right now — and scheduled to expire at year end.