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In the wake of the pandemic, these are challenging times for architectural firms, particularly regarding the field of commercial real estate. But there are tools you can access to give your firm the competitive edge it needs to triumph in today’s marketplace. One such tool is the AIA Leadership Academy: A Leadership and Business Development Program for Architects.
Consider taking advantage of AIA’s new flagship leadership development program, the AIA Leadership Academy, developed in partnership with The Growth Partnership (TGP), an executive coaching and advisory firm that’s a subsidiary of Engineered Tax Services, an AIA Innovation Partner.
This three-year program is designed for architects who are ready to advance their firms by learning critical business and leadership skills to grow their business, lead change and innovation, empower and engage people, and create immediate impact.
It’s the first—and only—multiyear program for architects that focuses on firm, professional, and community leadership. Expert instructors lead small classes (cohort-based classes) limited to 28 students. Students receive one-on-one personalized virtual coaching sessions.
The curriculum will teach you to lead across four key areas: managing yourself, your architectural firm’s growth, your profession, and your community. The program combines annual retreats, virtual classes, and individualized coaching. Sessions include knowledge-based lectures, facilitated exercises, panels, small- and large-group activities, success labs, best practice forums, and project-based assignments between sessions to promote problem solving and application-based learning.
Architects already have the technical knowledge and expertise to be successful, but interpersonal skills and leadership are an area that many professional service providers struggle with.
In addition to the development of leadership skills, it’s important for professionals to offer advisory services and suggestions to bring added value to clients. This can strengthen the client relationship and loyalty.
Differentiate yourself with value-added services
To achieve success as a leader in the architectural world, it’s important to focus not only on technical skillsets, but also to build your personal soft skills. You can act as an advisor to your clients by bringing to the table value-added services, such as a knowledge of incentives and benefits they can claim for projects you’re designing.
This can save your clients millions in tax dollars. For example:
These tax advantages bring substantial value to your clients. In addition, your firm could be claiming R&D credits and 179D deductions directly for some projects.
You can enhance your client’s bottom line by introducing the following tax strategies:
Winning clients by identifying hundreds of thousands of dollars in additional value
Clients can gain substantial tax savings in unexpected ways—but sadly, most CPA firms are unaware of these incentives, and because they require an engineer, they’re overlooked. When most architects hear “tax credits,” their eyes glaze over because they assume their CPA is supposed to handle anything tax-related. As a result, these incentives are left on the table.
Simple suggestions for tax planning might include:
Align yourself with strategic partners
With proper advice, your clients can pre-qualify for energy efficiency tax incentives stemming from 179D and 45L—and 179D’s new regulations make it much more challenging to qualify for. However, utilizing a strategic partner can make you shine. For example:
Yes, architectural firms are facing difficult times. But you’re not alone. The AIA Leadership Academy can help you develop leadership skills so your firm can achieve its full potential. In addition, Engineered Tax Services offers consulting and certification for these tax incentives and partners with hundreds of architectural firms across the United States to offer specialty tax services and consulting to help you achieve even greater success.
AIA Partner Engineered Tax Services provides an overview of tax credits and other forms of assistance.
Early 2020 has rolled in unlike any other year in US and perhaps even world history. The COVID-19 pandemic has changed American lives and businesses in ways that had only been played out in movies. Every industry and individual has been impacted in some form, including the architectural and design communities.
The pandemic has come during the height of income tax filings. Thankfully, tax deadlines and payments have been extended for 90 days to July 15. And the government and IRS have taken drastic steps to support communities with bills such as the IRS’ “People First Initiative.”
AIA member firms should remember that there are existing tax credits and deductions available that were earlier approved by Congress that may help generate cash flow. To that end, certain tax credit programs remain in place, such as Research & Development tax credits and the 179D tax deduction for energy-efficiency measures.
Research & Development tax credits (R&D)
This federal credit (and state credit in 42 states) is an incentive that helps offset a percentage of payroll costs for qualifying activity relating to a new or improved product or process, technical innovation, and an iterative process to overcome technical challenges.
The credit often has some level of application for every unique project that an architect designs regardless of the building type, location, cost, or technical challenge. Innovation may relate to energy efficiency, structural complexities, building components, historical renovations, site challenges, environmental impact, and more.
179D deductions for energy-efficient public buildings
Designers can reap the benefit of provisions contained within the Energy Policy Act (also known as the 179D tax deduction) when they design publicly funded buildings that are energy efficient. Public buildings include city, county, state, and federal buildings such as K-12 schools, public university buildings, fire stations, and city offices. And the deduction applies both to new construction and retrofits for lighting, mechanical, and envelope efficiencies.
The incentive is up to $1.80 per square foot, or 60 cents per square foot for lighting, 60 cents for HVAC, and 60 cents for building envelope retrofits. One architect designed a new 109,000-square-foot elementary school in Texas that qualified for a federal tax deduction of $197,049. At a 40 percent tax rate, that equals $78,819 in direct income tax savings.
For more details on 179D, read Engineered Tax Services’ recent article on aia.org here.
These benefits may not solve every business problem or return business to normal overnight, but some of these may provide a silver lining to assist many businesses in weathering the storm.
Engineered Tax Services is a licensed engineering firm specializing in complex federal tax regulation. Their primary focus is in real estate and business tax efficiency and tax consulting for individuals and CPAs to assist with areas that require specialized knowledge, testing, energy modeling, and design activity. If you have questions about any of these areas listed, please reach out to Heidi Henderson with Engineered Tax Services to review your activity and projects for potential tax savings. Heidi can be reached at firstname.lastname@example.org.