Construction company owners have to pull out all the stops to maximize profits in a competitive niche. A reliable way to cut costs is to lower your tax liability by claiming all the allowable tax write-offs, and it is easier than you may imagine.
Our experts explore the standard construction tax deductions for contractors in various categories below.
Supplies, Gear, and Tools
These expenses include office supplies, stationery, office furniture, and tools, such as wrenches and hammers. You can also deduct the cost of personal protective equipment (PPE), such as boots, masks, and helmets.
Equipment and Machinery
The significant allowable tax deduction includes the depreciation and maintenance costs of excavators, forklifts, and vehicles. It also covers other equipment that you need for business operations.
The running costs of operating machinery are also deductible.
Education Expenses
Deductible education expenses include trade school or college tuition and the cost of continuous professional development. Conferences and training to stay on top of industry developments also fall under this category.
Advertising Costs
Business advertising and marketing expenses are other key areas for tax deductions. These costs include pay-per-click advertising on platforms such as Facebook and Google, as well as print advertising costs.
Electronics and Communication Devices
The costs of electronics and accessories that apply include computers, printers, and routers. Company cell phones and tablets that you or your employees use may also be deductible under the right conditions.
Legal Expenses
The fees involved in drawing up contracts, setting up an LLC or other legalities may be deductible business expenses. You can also consider other independent contractors, such as accountants, although the payments for personal financial services are not deductible.
Subscriptions to Relevant Content
Contractors typically subscribe to magazines or newsletters that are relevant to the construction industry. These subscription fees are tax-deductible in most cases.
Phone Bills
Your phone bills are only partially tax-deductible.
If you work from home, you can also deduct your internet costs.
Salaries and Wages
The salaries and wages you pay to construction workers and administrative staff are allowable as business expense deductions.
Payments to subcontractors and other service providers also fall under this category.
Contact MKS&H
MKS&H provides contractors with a comprehensive range of auditing, accounting, and tax solutions. When it comes to tax deferral maximization, cash flow management, or financial statement reviews, our expertise is invaluable.
Our MKS&H services also include alternative minimum tax planning and IRS examination assistance.
Contact us today to schedule a consultation and build a better future for your construction venture.
