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General contracting

General contracting: the tax questions worth asking early

Long jobs, deposits, and retainage can make a profitable year look like a bad one on paper. Sort the timing before it hits the return.

Decisions that change the picture

  • Taking large deposits near year end on work you will not finish until next year.
  • Carrying retainage you have earned but not collected.
  • Adding a truck, tools, or a job trailer.

Records worth keeping as you go

  • Job-level cost records, including materials and subcontractor invoices.
  • Contracts showing deposit and retainage terms.
  • 1099 information collected from every sub before the work starts.

Questions to bring to your tax pro

  • How should deposits and retainage be reported for my situation?
  • Is my accounting method still the right one for the size of jobs I run now?
  • Which of my subs need a 1099, and what do I still need to collect?
This guide is general information, not tax advice. Your tax professional decides what applies to your business and your filing.
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