Dave Burger, Member in charge of the Manufacturing Group at Kennedy and Coe, LLC, is a Certified Public Accountant with 15 years of experience. Dave has a broad background in consulting, accounting and tax with specialization in the area of manufacturing including: Costing Systems, Gain Sharing, Inventory Management and Income Tax Credits.

Dave is a member of the Executive Committee of the Wichita Manufacturers Association, a member of the Board of Advisors for the Wichita State University School of Accountancy, a member of the American Foundry Society, the American Institute of Certified Public Accountants and the Kansas Society of Certified Public Accountants. He holds CPA certificates in the States of Kansas and Iowa.

Dave is a native of Wichita and a graduate of Wichita State University with a Bachelor of Business Administration in Accounting and Bachelor of Science in Chemistry.

You can reach Dave at burger@kcoe.com with your questions and check back later in the week for updated answers.

Q – What is the difference between taxation for a regular or “C” corporation and an “S” corporation?
A – A “C” corporation pays income tax on its income. Dividends paid by a “C” corporation are subject to income tax at the stockholder level – therefore earnings are taxed twice. An “S” corporation does not pay income tax. Instead, the stockholders of the corporation pay the tax on their prorated share of the company’s income. The company’s income is then taxed at individual tax rates. An advantage of an “S” corporation is that there is no double taxation of dividends. Another entity that is used frequently is a Limited Liability Company (LLC). Like an “S” corporation, a LLC does not pay income tax and the owners pay tax on their prorated share of income. A LLC is taxed like a partnership which can have other advantages.

Q – How do the new “bonus” depreciation rules work?
A – 30% bonus depreciation can be used for personal property purchased between September 11, 2001 and May 5, 2003. 50% bonus depreciation can be used for property purchased after May 5, 2003 through December 31, 2004. For example, a company purchased a computer on August 1, 2003 for $50,000. It would qualify for 50% bonus depreciation plus normal depreciation (5 years for computers). First year depreciation would be $30,000 ($50,000 x 50% plus $25,000 / 5). A company can also elect not to take bonus depreciation.

Q – What tax credits are available to manufacturers in Kansas?
A - There are 10 different federal and Kansas tax credits available to manufacturers in the state. The tax credits fall into basic categories such as credits for research and development, credits for increasing employment, credits for training employees and credits for investing in property, plant and equipment in Kansas. Tax credits are generally claimed on a company’s year end tax return.