CPA for Houston Contractors and Trade Businesses

Separate direct job costs — materials, subcontractors, equipment rental, permits — from overhead such as insurance, office costs, and advertising. Doing that in the books rather than at tax time is what lets you see margin per job, price the next one properly, and support the deduction if the return is ever examined. It also makes the year-end handoff to your CPA an afternoon instead of a week.

Generally yes, for unincorporated subcontractors paid for services during the year. The practical rule is to collect a Form W-9 before you pay anyone, not in January — that is when the taxpayer identification number is easy to get and hard to get later. Filing thresholds have changed recently, so check the current-year instructions rather than relying on a figure you remember.

You can deduct the business-use share, using either the standard mileage rate or actual expenses including depreciation, and heavier work vehicles have their own rules. Both methods require a contemporaneous mileage log. The method choice is constrained once made for a vehicle, so it is worth deciding in the first year rather than switching later and discovering you cannot.

Not automatically. Section 179 and bonus depreciation let you accelerate the deduction, which is powerful in a high-profit year and wasteful in a lean one — it can strand deductions where they buy you nothing and leave the profitable years that follow with no cover. It also lowers the income a bonding company or lender sees. The decision is which assets to accelerate, not whether to accelerate everything.

When profit is consistently high enough that the self-employment tax saved exceeds the cost of running payroll, filing a separate return, and paying yourself reasonable compensation. That threshold depends on your actual numbers, not a rule of thumb, and it is worth modeling before the election deadline rather than after a good year has already closed.

Retainage held by a customer and jobs part-finished at year end both affect when income is recognized, and the answer depends on your accounting method and contract type. Longer contracts can fall under specific tax accounting rules. This is one of the few areas where a contractor genuinely cannot rely on general small-business advice.