Construction companies have many different tax deductions available to them, and workers can also take advantage of numerous tax breaks that help save money. What are some of the deductions that you and your employees should take advantage of moving forward?
5 Common Tax Deductions for Construction Companies
- Car and Truck Costs: If you use a car, truck, or van as part of your construction company, the costs that you associate with maintaining and driving your car can be deducted. If you choose to use the IRS’ standard mileage rate, you need to keep track of exactly what mileage you are driving and when. You can also use the actual cost method, but that requires you to keep close track of all your costs for insurance, repairs, gasoline, oil changes, and mileage.
- Tools and Equipment: Tools and equipment can really add up, and the IRS allows construction workers to deduct the expenses associated with many types of tools. Smaller and less-expensive tools can be deducted in full when they are purchased, like hammers or vehicle signage. More expensive pieces of equipment and machinery can be deducted through a pro-rated amount for the average expected lifespan of the equipment, including trailers, ladders, insurance for vehicles, and more.
- Fees and Memberships: It can be expensive to be a construction worker or construction company, and there are often continuing education and training requirements that can really add up. One of the other common types of tax deductions that you can take is costs that are required to keep you working, like liability insurance, trade school tuition, union dues, licensing fees, memberships to trade organizations, and more.
- Legal and Professional Services: Did you know that legal and accounting fees, like having your taxes prepared, can also be tax deductible? MKS&H can help you determine what types of payments you make are eligible and ensure that they are written off.
- Advertising and Marketing: Many construction companies get new clients through word of mouth, but your advertising and marketing costs are also tax deductions you can take. Money that you spend on print media, digital channels, and advertising can all be applied toward your deductions.
Get the Funding You Need for Your Construction Company with MKS&H
MKS&H provides tax and accounting services to businesses of every size and in every industry, including construction. We can work with you to improve your company and make sure that it is financially secure now and in the future. Contact us today for a consultation.
About MKS&H: McLean, Koehler, Sparks & Hammond (MKS&H) is a professional service firm with offices in Hunt Valley and Frederick. MKS&H helps owners and organizational leaders become more successful by putting complex financial data into truly meaningful context. But deeper than dollars and data, our focus is on developing an understanding of you, your culture and your business goals. This approach enables our clients to achieve their greatest potential.
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