Tax Deductions Every Contractor Should Know About
A Practical Guide for General Contractors, Remodelers, and Tradespeople
by CoachXJosh
Margins matter in construction — and so does your tax strategy. If you're not tracking deductions year-round, you're probably leaving thousands on the table.
This guide breaks down the most common — and often overlooked — tax write-offs for contractors and small construction businesses.
🔧 1. Tools & Equipment
Any tools, machinery, or gear you buy for the job are 100% deductible.
Power drills, saws, ladders
Safety gear like boots, gloves, and helmets
Generators, compressors, or mixers
Equipment rentals and repairs
🧠 Pro Tip: For larger purchases, you may qualify for Section 179, allowing you to deduct the full cost in the year it's placed in service.
🚛 2. Vehicle & Mileage
Use your truck or van for business? It’s a legit write-off.
You can deduct vehicle costs two ways:
Standard Mileage Rate: 67 cents per mile (2024), 67.5 cents per mile (2025)
Actual Expenses: Gas, insurance, oil changes, repairs, registration, etc.
🧠 Pro Tip: Use apps like MileIQ, Everlance, or QuickBooks Self-Employed to automatically track your business miles.
📱 3. Phone, Internet & Software
Staying connected and organized is part of the job — and deductible.
Business portion of your cell phone bill
Construction software like Buildertrend or Joist
Internet used at a home office or job trailer
Business email, CRM tools, Google Workspace or Microsoft Office
🧰 4. Materials & Job Supplies
Everything used directly for client work can be written off.
Lumber, nails, cement, piping, drywall
Paint, caulking, fasteners, insulation
Waste removal, delivery charges, landfill fees
🧠 Pro Tip: Track supplies by job for better bookkeeping and clean audit-proof records.
🏠 5. Home Office (If You Qualify)
If you manage the business from home, and have a dedicated space used exclusively for work, you may qualify to deduct:
A portion of rent or mortgage
Utilities like electricity, water, and internet
Home maintenance or repairs to the office space
📢 6. Advertising & Marketing
Everything you spend to get new clients is deductible.
Yard signs, truck wraps, branded clothing
Business cards and brochures
Website hosting and design
Facebook, Google, and Thumbtack ads
👥 7. Contract Labor / Subcontractors
Hiring outside help? Those wages are fully deductible.
1099 subcontractors
Electricians, plumbers, framers, etc. you bring in for specialized tasks
Be sure to issue Form 1099-NEC in January for each contractor paid over $600
🧠 Pro Tip: Always collect a W-9 form before issuing payments — it makes tax season smooth.
🍽️ 8. Meals & Site Team Expenses
Feeding your crew during long days on site? That’s a business expense.
Meals for staff during long projects
Food runs for the team when working off-site
Meals with clients or subcontractors when discussing business
🧠 Reminder: Most business meals are 50% deductible — just keep the receipt and note the business purpose.
🗂️ Final Thoughts: Organization Is Everything
Getting the most out of your deductions isn’t just about what you spend — it’s about how you track it.
Here’s how to stay organized and audit-ready:
Keep business and personal finances separate (open a dedicated business account)
Save receipts — digital or physical, with notes on purpose
Use accounting software or a trusted bookkeeper to categorize your expenses
Track contractor payments throughout the year to stay 1099-compliant
Review your numbers quarterly to avoid surprises