Deductions for Contractors & Sub-Contractors

Gross receipts from sales and/or services

• Copies of checks and statements from sales, service, commissions, bonuses, and 1099 Forms

Other Income

• Income from ownership in another business (K1 forms) interest on bank accounts or loans made to someone else

Accounting/Payroll

• ​Accountants, accounting software, payroll companies, tax preparation, bookkeeper, etc. 

Advertising

• Business cards, social media, open houses, flyers, product testing, videos, and CDs

Bad Debt

• Money loaned or invested that there is no hope of recapturing

Bank Charges

• Fees charged by banks to maintain an account, wire fees, ATM withdraw, or other bank services

Children Paid

• Money paid to children for helping with such things as delivering flyers and/ or product, stuffing envelopes, cleaning office and/or car, modeling. Must keep a detailed log of tasks and how paid.​

Computer, Internet, and Tech

• Software, Online services, Internet expense, computer maintenance

Delivery or Shipping

• Cost to deliver or ship materials

Depreciable Tools

• Tools that cost more than $500 and will last more than 3 years

Dues and Subscriptions

• Dues to professional organizations and magazines that have to do with your trade or business

Dump Fees

• Fees you pay to haul off trash and waste

Education

• Books, classes, or seminars that you take to improve your business

Employee Costs

• Board and staff meetings, training, educating employees, and employee benefit programs

Equipment

• Compressors, trailers, scaffolding, generators, welding equipment, etc.

Equipment Lease

• Tools and equipment you rent or lease that you keep for a long period of time

Event Expense

• Exhibits for publicity. Costs include venue expense, displays, food, samples, etc.

Equipment Rent

• Any tools or equipment you rent or for a one time job

Gifts

• Gifts to clients and associates limited to $25 per person per year

Home Office

• A separate room in your home to do business and accounting. A percentage of utility bills, home owners or renters insurance, property tax, mortgage interest, refinance fees, repairs and maintenance, cleaning supplies, office decor, etc may be taken. It is determined by square footage of office space vs square footage of the entire house

Insurance

• Liability, vehicle insurance, bonds, health insurance for employees, and workers compensation insurance, key man life, and/or property crime

Interest

• Interest paid on construction loans, equipment loans, credit cards, vehicles, and/or mortgage interest on building or shop, etc. 

Janitorial Expense

• Costs for an individual or company to clean office space, shop space, and grounds

Laundry and Cleaning

• Includes uniforms and protective clothing and also your clothing when you are out of town

Legal and Professional Services

• Attorneys, accountants, inspectors, appraisers, franchise fees, architects, engineering, etc. 

Materials – Cost of Goods Sold

• Anything you put into a building or service that stays with the building

Meals

• Meals with clients, potential clients, and associates. Note: entertainment is no longer deductible

Merchant Fees

• ​Credit card convenience fees to take payments by credit card such as merchant services Square, PayPal, etc. 

Mileage or Vehicle

• Expenses for all company vehicles including repairs, maintenances, fuel,
  insurance, vehicle washes, licensing, interest on loans, etc. Mileage can be
  taken fro personal vehicles used in part for business

Office Expense other than consumables

• Office supplies, computer supplies, Internet, postage, phone apps, beverage services

Officer Wages

• The IRS law states that an officer (owner) of a corporation, must be paid a reasonable wage for services rendered to the company. They must be paid with a W-2 just like all employees.

Outside Services

• Companies you hire to perform services for your company for example consulting, trash bins, sanitation, etc. 

Printing

• Brochures, forms, signs, etc.

Protective Clothing

• Coveralls, boots, hard hats, globes, coats, uniforms, etc. Uniforms include shirts, hats, and jackets that have the company logo on them

Purchases

• Any equipment, office furniture, computers, vehicles that cost over $500

Realtor Fees

• The commission you pay to a Realtor to sell a property

Rent

• Office, shop, storage units, etc.

Repairs

• Repairs both office and construction equipment and tools

Return and Allowances

• Money refunded for returned products or services, discounts given and rebates on sales​

Security

• Cameras, alarm systems, guard dogs, or anything used to protect property

Shop/Warehouse Supplies

• Things you use that don’t stay with the property and/or used in the shop

Small Tools and Equipment

• Tools that cost under $500 and last less than three years such as hammers, screwdrivers, sockets, small saws, etc. 

Startup Costs

• Costs you incur before you open the doors for business, such as setting up accounts, research, advertising, etc. Limited to $5000 in one year

Sub-Contractors

• People or companies you hire on a job by job basis to do part of a job. Individuals paid over $600 must be given a 1099 Misc

Taxes and Licenses

• Property tax, payroll tax, corporation tax, etc. Business, professional, state, and city licenses

Telephone

• Cell phone, extra phone lines into home for business, fax, Internet, office land line, phones for employees

Trade Shows

• Shows that you have a booth in or shows that you attend to check out current trends in the industry

Travel

• Hotels, airfare, cab fare (ex. Uber or Lyft), public transit, parking, cleaning while away from home, business trip log, bus, train, etc.

Website Expense

• Internet hosting and services, website design, and maintenance​