28 Tax Write-Offs for Construction Contractors
NAICS business codeYour NAICS business code is a six-digit string of numbers that shows the type of work your business does. NAICS stands for North American Industry Classification System. When you do your taxes, you'll enter it in Box B of your Schedule C.236200
Reviewed bySabrina Wiechart, CPASabrina is a Certified Public Accountant (CPA) with over 15 years of experience in tax preparation, planning, and S-Corp compliance. She holds a Master’s in Accounting and specializes in helping self-employed individuals make smart tax decisions. Sabrina is passionate about simplifying the S-Corp process and making sure every client keeps more of what they earn.Construction contractors know that a solid foundation is crucial to building a sound structure. But too often, even the best craftsmen forget to apply the same care to their taxes.
One of the best ways to reduce the weight burden during tax time is to make sure you claim all your everyday sort of business expenses on your return. By leaving out this extra material, you’ll build a financial framework that is strong enough to last a lifetime!
Software for CRM, lead generation, or email marketing is a write-off.
Legal fees paid to set up your business or draw up paperwork are deductible.
Software you use for invoicing, tracking expenses, creating timesheets, and so on is deductible.
Coaching, seminars, or workshops used to maintain your work-related skills can be written off.
This covers training that maintains or improves skills for the work you already do. Courses that qualify you for a new trade or profession are not deductible.
Write off the fees you pay to contract labor to help you complete projects.
Pay any one contractor $600 or more in a year and you'll need to file a Form 1099-NEC for them.
Ad campaigns on Google, Meta, TikTok, and more are all deductible on your taxes.
If you belong to a union, go ahead and write off your dues . The share of your dues that goes toward lobbying isn't deductible — your organization can tell you what percentage that is.
Where a union spends part of your dues on lobbying, that portion is not deductible.
Deduct any gear you and your team need for safety on the job, like steel-toed boots and hard hats.
If you take courses to learn new skills as a contractor, you can write off what you pay.
This covers training that maintains or improves skills for the work you already do. Courses that qualify you for a new trade or profession are not deductible.
Fees to get a commercial license to operate heavy machinery and vehicles are deductible.
Heavy machinery is depreciated here over its useful life. Small hand tools are lower-cost supplies and belong on Box 22 instead.
If you buy a phone or laptop and use it for work, it's partially deductible — in proportion to how much you use it for business. The device itself is depreciated on Box 13 (or expensed under Section 179); your monthly service plan belongs on Box 27b, and accessories on Box 22.
Protecting yourself and your business with liability insurance? It's a write-off.
Scaffolding, generators, dumpsters or heavy equipment rented for a job are deductible as rent.
Fees to renew your license to perform your work are fully deductible.
Permits and inspection fees you pay yourself are deductible. If you bill them straight through to the client as part of the project price, they aren't your expense — and the reimbursement isn't your income either.
Permits and inspection fees you pay yourself are deductible. If you bill them straight through to the client as part of the project price, they aren't your expense — and the reimbursement isn't your income either.
If you drive for work ...
If your work as a construction contractor finds you on the road, whether you're driving to a job site, picking up equipment, or meeting with a client, keep in mind that you can write off a portion of your expenses on things like fuel and car maintenance.
Parking for a meeting downtown, or any other work trip, is tax-deductible!
A toll while driving to or from a work destination is tax-deductible!
If you buy a new car, you can write off part of the cost every year for five years.
Flashlights, tire iron, duct tape, and other tools you may need in your vehicle are deductible.
Car insurance monthly fees, registration, even roadside assistance are partially deductible — if you use the actual expense method. The standard mileage rate already covers them.
Oil changes, repairs, and regular checkups are deductible if you use the actual expense method. Take the standard mileage rate instead and they're already baked into your per-mile deduction.
If you discuss work at a restaurant ...
The IRS gets that a construction contractor's job isn't restricted to construction sites. You might grab dinner with prospective clients or fellow construction contractors who want to refer you for a job. These both count as business meals and you can write the costs off on your taxes.
If you discuss work with a coworker, mentor, client, or prospective client, it's a write-off — 50% of the tab.
If you leave town for work ...
Out-of-town work events like trade shows or industry conferences come with associated travel costs that you can write off on your taxes.
Planes, trains, and car rentals are all work-related travel costs that can be written off.
When you travel for work, lodging expenses such as hotel rooms or Airbnb are write-offs.
When you're traveling for work, your meals are 50% deductible — takeout included. (Long-haul truck drivers subject to DOT hours-of-service rules can deduct 80%.)
If you work from home ...
If you work from home on client development, lead generation, industry research, or paperwork and finance management, you can deduct home office expenses from your taxes.
A desk, chairs, lamps, and other home office necessities are all tax write-offs. Anything over about $2,500 gets depreciated on Form 4562 instead of written off all at once.
Repairs just for your home office are 100% deductible. Repairs to the rest of your home count too, prorated by your business-use percentage on Form 8829.
Gotta keep the lights on in your home office! A portion of your electricity bill counts.
Whether it's rental or homeowners insurance, you can write off a portion through your home office deduction.
It'd be hard to work in an office without running water, huh? Your water bill counts.
You need internet to do your job! If you claim a home office, deduct it prorated on Form 8829 along with your other utilities. Internet you pay for on the road, purely for work, is 100% deductible.
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