Home Service & Contractor Tax Preparation & Filing
Home Service & Contractor Tax Services CPA for Phoenix, AZ Businesses
Full-Service Contractor Tax and Accounting Services
Taxes for home service professionals and contractors usually fall into one of two categories: 1099 workers or Form 1040 Schedule C LLC owners. If you’re an independent plumbing contractor, electrician or you contract with construction companies to do a specific job (like drywall, ductwork, etc.), you should receive a 1099 from your employers.
If you’ve registered either yourself or your small team as a limited liability company (LLC), you’ll need to report your business’s income with a Form 1040 Schedule C. LLCs don’t technically pay taxes – they’re just a pass-through entity. The IRS views a single-person LLC as a “disregarded entity,” which means you don’t need to file a separate tax return for your LLC.
Your business tax filing could get a little more complicated if you’re the owner of a plumbing company, HVAC company, landscaping company or some other construction specialty business with employees.
If you’re not sure if your current approach to business tax filings is maximizing your yearly tax savings, it may be time to call an expert. The team at H&H Accounting Services can ensure you’re following all the local and federal tax rules to avoid audits or penalties.
Plumbers
HVAC Professionals
Construction Businesses
Landscapers
House Cleaners and Maid Services
Electricians
Pool Installation and Pool Cleaning Companies
Waste Disposal Contractors
Pest Control Businesses
Roofing Companies
Deductions for Contractors and Construction Businesses
If you’re a home service or construction worker, whether you’re a sole proprietor or own a small business, there are many potential tax deductions you can claim. Some of the biggest deductions include:
Mileage and Travel Expenses
Subcontractor Labor
Depreciation
Business Loan Interest
Construction workers and home service workers don’t usually spend their days in an office behind a desk. Home service workers tends to drive a lot, especially if they’re visiting the homes of four or five clients each day. In a sprawling metro area like Phoenix, you could be putting nearly 100 miles on your vehicle daily.
That’s why mileage and travel expenses are hugely important deductions to claim. Just keep in mind that accurately tracking mileage is important. The IRS may audit you if they suspect your mileage numbers are exaggerated or you can’t back them up. There are convenient apps specifically designed to help small business owners track their mileage.
Your vehicle expenses are also deductible, especially if you’ve bought a truck or fleet vehicle specifically for business and not personal use. Other tool purchases may also be tax deductible, so keep your receipts.
If you’re a self-employed contractor, you also likely qualify for the self-employment tax deduction for the Medicare and Social Security taxes you pay.
Depreciation, especially of tools or vehicles, may represent one of your biggest and most lucrative deduction opportunities. If you took out loans to finance the purchase of tools, a business vehicle or materials, you may also be able to deduct your interest payments on those loans.
Maximize Your Tax Savings Without Angering the IRS
Home service providers and contractors in Arizona have a lot of tax deduction opportunities, but those tax-saving strategies can get you in trouble if you don’t follow all the filing and documentation rules.
The team at H&H Accounting Services is committed to helping our Phoenix construction and contracting clients save money on their business taxes. Call us today at (480) 561-5805 to schedule a consultation and find out how we can help.