As a contractor, the structure of your business impacts everything from tax obligations to personal asset protection. Deciding whether to form an LLC, S-Corp, or C-Corp can significantly influence your bottom line. This guide breaks down the key features of each option, providing clarity on tax implications, liability protection, and setup costs to help you make an informed choice. Choosing the wrong business entity can lead to paying unnecessary taxes, additional paperwork,

Construction business owners at $5M-$10M in revenue face a hidden profit drain that has nothing to do with material costs, labor shortages, or project delays. It's self-employment tax and most contractors are paying far more than necessary. Self-employment tax hits sole proprietors and LLC members at 15.3% on all net business income. On $200,000 in net profit, you're paying over $30,000 in self-employment tax alone before income tax even enters the picture. Every dollar unnec

For construction contractors, the possibility of an IRS audit is a real and costly concern. This article highlights the top IRS red flags for common mistakes such as labor misclassification, revenue recognition issues, and COGS errors that can trigger audits and expose your business to scrutiny. Construction is unique. With long-term contracts, high material and labor costs, specialized accounting methods, and industry-specific regulations, it’s a prime target for IRS audits

You're about to make a major equipment purchase. Your accountant mentions "Section 179" and "bonus depreciation." You nod along, but honestly, you have no idea which saves you more money. Here's what makes this decision even more important now: Recent tax legislation doubled Section 179 limits and permanently restored 100% bonus depreciation. This is the most contractor-friendly equipment depreciation landscape in modern history. Let's break down Section 179 vs. bonus depre

The clock is ticking, and December 31st is quickly approaching. This isn’t just any end-of-year deadline, it’s the hard cutoff for making crucial tax moves that could save your construction company thousands of dollars. This year, the stakes are even higher. Recent changes to tax laws have dramatically altered the landscape of equipment depreciation, creating an unprecedented opportunity for contractors to maximize their savings. The adjustments to tax codes mean that contrac

For construction owners, general contractors, and subcontractors selecting the correct accounting method isn't just a compliance checkbox, it's the primary financial strategy for optimizing your cash flow, securing bonding capacity, and maintaining working capital when you need it most. Two methods dominate the construction accounting landscape: Completed Contract Method (CCM):  Defers all profit recognition until the project reaches 100% completion, maximizing tax deferral a

If you want to run a construction business that follows all the rules set by the federal and state governments, you need to pay...

As a construction bookkeeping professional, one of the most misunderstood areas I’ve seen among contractors is managing retainage—and...

Small construction businesses operate in one of the most dynamic and complex sectors of the economy. With fluctuating material costs,...

As a contractor, you're accustomed to handling a large number of moving parts - labor costs, material purchases, and the day-to-day...

Tax rules might be intimidating, but they play an important part in how construction companies run financially. Knowing the correct tax...

Running a construction company is difficult because there are so many moving pieces, from project management to financial planning. Taxes...