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.
Send me this guide, and the two others for my trade.
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