Tax Write-offs for Small Construction Businesses to Consider in 2025

If you’re a contractor or home remodeler, you work hard for your money—so why let the IRS take more than they need to? The truth is, a lot of contractors miss out on huge tax deductions simply because they don’t know what they can write off. And let’s be real—no one enjoys digging through tax laws (except maybe accountants, and even they drink a lot of coffee).

We understand how tight margins can get in the home remodeling business. That’s why we’re here to help you keep more of your hard-earned cash by making sure you take advantage of every tax deduction available. Whether it’s your truck, tools, marketing costs, or even the boots on your feet, there are plenty of ways to legally reduce what you owe come tax time.

So grab a cup of coffee (or something stronger if tax season stresses you out), and let’s go over the top 11 tax write-offs that every contractor and remodeler should be using. If you’re not already claiming some of these, you’re leaving money on the table—and we’d rather see that money in your pocket, not Uncle Sam’s.

Disclaimer: This article is for informational purposes only and is not intended to be tax advice. Speak to your tax advisor or CPA before writing off anything.

Here are the top 11 tax write-offs for small contractors and home remodeling businesses:

General Contractor Tax Write-Off #1: Vehicle Expenses

As a GC, your office is in your car most of the time, so it’s only right you can write off all things vehicle related. Believe it or not, you can even use IRS Section 179 to write-off your entire vehicle purchase, but for the purposes of this article, we’ll stick with expenses.

For home remodeling contractors, traveling between job sites, suppliers, and client meetings is a routine part of the business. The IRS allows deductions for mileage, fuel, maintenance, insurance, lease payments, and other vehicle-related costs, as long as the vehicle is used for business purposes. Whether you drive a work truck, van, or personal vehicle for business, tracking these expenses properly can significantly reduce taxable income.

Mileage Deduction vs. Actual Vehicle Expenses

Contractors can choose between two methods for deducting vehicle expenses:

• Standard Mileage Rate: The IRS sets a per-mile deduction rate each year (for 2025, it's 70 cents per mile). If you track your business mileage and multiply it by this rate, you get your total deduction. This method is often easier and works well for those who drive frequently but have low vehicle-related expenses.
• Actual Expense Method: This method involves tracking all fuel, maintenance, repairs, insurance, registration fees, depreciation, and loan interest. You then calculate the business-use percentage of your total vehicle expenses and deduct that portion.

Choosing the best method depends on which one provides the larger deduction based on your vehicle usage.

Fuel and Maintenance Costs

If you use the Actual Expense Method, fuel and maintenance costs related to business driving are fully deductible. This includes expenses for gas, oil changes, tire replacements, brake work, transmission repairs, and tune-ups. Keeping detailed fuel and service records is essential to ensure these costs are properly written off.

Vehicle Insurance and Registration Fees

Insurance premiums for a vehicle used exclusively for business are 100% deductible. If the vehicle is used for both personal and business purposes, only the business-related portion of the insurance can be deducted. Registration fees and state inspection costs also qualify as deductible vehicle expenses.

Lease Payments vs. Vehicle Depreciation

If you lease a vehicle for business use, monthly lease payments can be deducted based on the percentage of business use. For example, if 75% of the miles driven are for work, then 75% of the lease cost is deductible.

For those who own their vehicles, depreciation may be the better deduction. The IRS allows you to write off a portion of the vehicle’s cost each year under Section 179, which enables businesses to deduct the full cost of certain vehicles in the year they are purchased. This can be especially useful for contractors who buy trucks, vans, or heavy-duty work vehicles.

Tolls, Parking, and Road Expenses

If you pay for toll roads, parking fees, or roadside assistance while conducting business, these expenses are fully deductible. However, fines, tickets, and personal parking costs are not tax-deductible.

GPS and Fleet Management Software

Many contractors use GPS tracking systems, fleet management software, or apps like MileIQ to track mileage and optimize routes. Subscription costs for these services qualify as business expenses and can be written off.

Record-Keeping for Vehicle Deductions

To ensure compliance and maximize deductions, keeping a detailed mileage log is essential. This log should include:

• Date of the trip
• Starting and ending odometer readings
• Purpose of the trip (e.g., client visit, materials pickup)
• Total miles driven

Using accounting software like QuickBooks Self-Employed or apps like MileIQ or TripLog can simplify mileage tracking and ensure accurate record-keeping.

Vehicle expenses are one of the largest deductions available to home remodeling contractors. By tracking mileage, fuel, insurance, maintenance, and lease or depreciation costs, contractors can significantly lower their taxable income. Choosing between the Standard Mileage Rate and the Actual Expense Method ensures that you maximize your deductions while staying compliant with IRS regulations. 

General Contractor Tax Write-Off #2: Tools and Equipment

You’re going to love this tax write-off since it gives you an excuse to buy that new shiny tool you’ve had your eye on at Lowes.

For contractors and home remodeling businesses, tools and equipment are essential assets, and the IRS allows you to deduct the cost of these items as business expenses. 

This includes everything from small hand tools like hammers, screwdrivers, and wrenches to larger power tools such as drills, saws, air compressors, and even specialized equipment like tile cutters or laser levels. Safety equipment, such as gloves, goggles, and harnesses, may also qualify as deductible if used exclusively for your business.

Tools and Equipment General Contractors Can Write-Off

One-Time vs. Long-Term Purchases

Small tools and equipment that cost less than a certain amount (e.g., $2,500 per item under the de minimis safe harbor threshold) can typically be deducted as an expense in the year of purchase. For more expensive equipment, you may need to depreciate the cost over several years. For instance, if you purchase a $5,000 table saw, you may deduct a portion of that cost each year, based on its expected useful life. Alternatively, Section 179 allows you to deduct the full cost of certain equipment in the year it was purchased, up to an annual limit.

Repairs and Maintenance

The cost of repairing or maintaining tools and equipment is also fully deductible. This includes expenses like sharpening blades, replacing drill bits, fixing broken machinery, or servicing power tools. Keeping receipts for repairs is crucial, as these expenses add up over time and can significantly reduce your taxable income.

Renting or Leasing Equipment

If you rent or lease tools or equipment for specific projects, those costs are also deductible. For instance, if you rent a heavy-duty excavator for a week to complete a landscaping job, the rental fee can be fully written off as a business expense. Keep in mind that recurring rentals may also be worth exploring for depreciation, depending on the terms of the lease.

Deducting Consumables

Many contractors overlook the fact that consumables used alongside tools are also deductible. These include items like sandpaper, nails, screws, adhesives, caulking, and similar supplies that are essential for completing jobs. Since these are typically smaller expenses, tracking them accurately can require discipline, but doing so ensures no deductions are missed.

Software and Equipment-Related Technology

If you purchase software or technology directly related to equipment usage, such as estimating tools, or subscriptions for design and blueprint software like AutoCAD, these can also be deducted. While not physical tools, they support your work and fall under the broader category of equipment-related expenses.

Record Keeping for Tools and Equipment

To maximize your deductions, maintain a clear record of all purchases, including receipts, invoices, and any documentation that shows the tools or equipment are used for business purposes. It's also a good idea to separate personal tools from business tools to avoid confusion. Using software like QuickBooks or specialized contractor accounting tools can simplify this process.

Properly categorizing tools and equipment as either direct expenses or depreciable assets can save you thousands in taxes while keeping your business operations efficient. 

General Contractor Tax Write-Off #3: Office Supplies 

Just like you can write off tools and equipment, you can deduce supplies you purchase to run your business.

Office supplies are essential for running a home remodeling or contracting business, even if most of your work happens on job sites. These include everyday items such as pens, notebooks, sticky notes, folders, and paper, as well as more specialized supplies like blueprint paper, business forms, and contractor estimate pads. Essentially, anything used for administrative tasks in your business that is not long-term equipment qualifies as an office supply deduction.

Office Supplies General Contractors Can Write-Off

Printers, Ink, and Paper

Many contractors overlook the cost of printing, but if you regularly print contracts, invoices, or design plans, expenses related to printers, toner, ink cartridges, and reams of paper are all deductible. These expenses can add up quickly, especially if you frequently provide physical copies of project proposals or blueprints to clients.

Postage and Shipping Costs

If you mail contracts, invoices, or marketing materials, postage fees are deductible. This also applies to shipping costs for sending out paperwork or returning defective materials. If you use courier services for important documents, such as permit applications, those fees also count as business expenses.

Digital and Cloud-Based Office Tools

Modern office operations often rely on digital tools rather than physical supplies. Subscription-based cloud storage for project files, document scanning apps, and digital invoicing services can be deducted as office expenses. If you pay for Microsoft Office, Google Workspace, or project management software such as Trello, Monday.com, or Asana, those costs are also fully deductible.

Office Furniture and Equipment

If you have a dedicated office space, items like desks, chairs, filing cabinets, and whiteboards can be deducted as office supplies. However, depending on their cost, some of these purchases may need to be depreciated over time rather than deducted all at once. Small accessories such as desk organizers, lamps, and ergonomic chairs often qualify for immediate write-offs.

Business Stationery and Branding Materials

Custom-branded invoices, letterheads, business cards, and even promotional materials such as brochures and flyers fall under office supply deductions. If you have custom folders, envelopes, or banners with your company’s name and logo, these expenses can also be written off.

Record-Keeping for Office Supply Deductions

To maximize your deduction, track all purchases throughout the year and store receipts in an organized manner. Digital bookkeeping tools such as QuickBooks or Expensify can help categorize these expenses automatically. Keeping a separate business account or credit card for office supply purchases simplifies record-keeping and ensures that these expenses don’t get mixed with personal costs.

By consistently tracking and deducting office supplies, you can reduce your taxable income while ensuring your business operates smoothly. 

General Contractor Tax Write-Off #4: Home Office Deduction

While your vehicle is your office most of the time, you can still deduct a portion of your home, specifically your “home office.”

The home office deduction allows contractors and home remodeling business owners to deduct a portion of their home expenses if they use a specific area of their home exclusively for business purposes. This deduction can significantly reduce your taxable income by accounting for the costs associated with maintaining a workspace in your home.

Exclusive and Regular Use Rule

To qualify, the home office space must be used exclusively for business purposes. For example, if you use a spare bedroom solely as your office for administrative tasks like creating estimates, scheduling jobs, and managing invoices, it qualifies. Occasional personal use of the space would disqualify it, so it’s essential to designate a specific area for work and maintain its exclusive use.

In addition to exclusive use, you must use the space regularly for business activities. Sporadic use of a desk in your living room wouldn’t qualify, but a dedicated office space where you consistently handle business operations does.

Direct vs. Indirect Expenses

The home office deduction can cover both direct and indirect expenses:

• Direct Expenses: Costs that are specific to your home office space, such as painting the office, installing additional lighting, or adding shelves. These are fully deductible.
• Indirect Expenses: Costs related to maintaining your entire home, such as rent/mortgage interest, property taxes, utilities (electricity, water, heating), homeowners insurance, and general maintenance. These are deductible based on the percentage of your home used as an office.

How to Calculate the Home Office Deduction: General Contractor Edition

There are two methods to calculate the home office deduction:

1. Simplified Method: This method allows you to claim $5 per square foot of your home office, up to 300 square feet. For example, if your home office is 150 square feet, your deduction would be $750 (150 × $5).

• Advantages: Easier to calculate and requires less record-keeping.
• Disadvantages: May result in a smaller deduction if your actual expenses are higher.

2. Actual Expense Method: With this method, you calculate the exact percentage of your home used for business and apply it to your total home expenses.

• Example: If your home office is 200 square feet and your home’s total square footage is 2,000, your office accounts for 10% of your home. You can then deduct 10% of your rent/mortgage interest, utilities, and other shared expenses.
• Advantages: Often yields a higher deduction.
• Disadvantages: Requires detailed records of home expenses and calculations.

Other Deductible Expenses for Home Offices

Beyond rent, mortgage interest, and utilities, you can also deduct expenses such as internet service, repairs and maintenance for the office space, and even a portion of landscaping if your home office is used to meet with clients and curb appeal is necessary for your business.

Documentation and Record-Keeping

To ensure compliance with IRS regulations, maintain thorough documentation of your home office expenses. Save receipts, utility bills, mortgage statements, and property tax documents. Additionally, create a simple floor plan or take photos of your home office to demonstrate its exclusive use for business purposes.

Using tools like QuickBooks or dedicated tax apps can help streamline the process of tracking and categorizing home office expenses.

Benefits of the Home Office Deduction

This deduction not only reduces your taxable income but also offsets the cost of maintaining a professional and productive workspace in your home. By properly documenting and calculating your home office expenses, you can save money while ensuring compliance with tax laws. 

General Contractor Tax Write-Off #5: Marketing and Advertising

For contractors and home remodeling businesses, marketing and advertising are essential to attracting new clients and growing the business. The IRS allows you to deduct any reasonable expenses used to promote your business, whether through online or offline channels. These deductions cover everything from social media ads to traditional print materials.

Digital Advertising Costs

Online advertising is one of the most powerful tools for home improvement businesses. Expenses for running paid ads on platforms like Facebook (like the ad above), Google Ads, Instagram, and Pinterest are fully deductible. If you use lead-generation services such as Angi (formerly Angie’s List), HomeAdvisor, or Thumbtack, those costs also count as marketing expenses. Additionally, sponsored posts or influencer collaborations that help promote your services can be written off.

Website and SEO Expenses

A business website is a crucial marketing asset, and expenses related to building, hosting, and maintaining it can be deducted. These include domain registration fees, web hosting services (such as Bluehost or SiteGround), and website design costs. If you pay for SEO services, content creation, or blogging to increase website traffic, those costs also qualify. Subscription fees for tools like SEMrush, Ahrefs, or Google Workspace that help optimize marketing strategies are considered part of this deduction.

Print Advertising and Business Branding

Even in the digital age, print advertising remains effective for local service businesses. If you invest in flyers, brochures, yard signs, or newspaper ads, those expenses are deductible. Vehicle wraps with your company’s logo and contact information also qualify, as they serve as mobile advertising. Additionally, promotional items such as branded t-shirts, hats, or pens given to potential clients can be written off.

Business Cards and Direct Mail Campaigns

Traditional marketing methods, like business cards and direct mail campaigns, still play a role in generating leads. If you send postcards, mailers, or handwritten letters to homeowners, all associated costs—printing, postage, and mailing list rentals—are deductible. Services like Every Door Direct Mail (EDDM) through USPS are commonly used for these marketing efforts.

Networking and Sponsorships

Expenses related to networking and business promotion, such as joining trade organizations, local business groups, or home improvement expos, are deductible. Sponsoring local events, school sports teams, or community initiatives where your business name is advertised also qualifies as a marketing expense.

Professional Photography and Video Marketing

High-quality visuals can make a significant impact on your marketing success. If you hire a photographer or videographer to create professional images and videos for your website, social media, or advertising campaigns, those costs are fully deductible. This includes drone photography services, which are increasingly popular for showcasing home remodeling projects.

Software and Tools for Marketing

Any software or tools used for marketing automation, customer relationship management (CRM), or social media scheduling qualify as marketing expenses. This includes services like Mailchimp and Canva. If you pay for video editing software like Adobe Premiere Pro or Final Cut Pro to create promotional content, those expenses can also be deducted.

Tracking and Organizing Marketing Expenses

To maximize deductions, track all marketing and advertising expenses throughout the year. Using accounting software like QuickBooks can help categorize these costs accurately. Keeping digital receipts and invoices for ad campaigns, print orders, and sponsorship agreements ensures smooth record-keeping in case of an IRS audit.

Marketing and advertising are essential for attracting clients, and every dollar spent on promotion is a dollar that can be deducted from taxable income. By strategically investing in both online and offline marketing while keeping thorough records, you can reduce your tax burden while growing your home remodeling business. 

General Contractor Tax Write-Off #6: Software and Apps

For home remodeling contractors, software and apps are essential for managing projects, generating estimates, tracking expenses, and marketing services. The IRS allows you to deduct any software or digital tools that are necessary for running your business. Whether it’s estimating software, accounting programs, or customer relationship management (CRM) tools, these expenses can be fully written off as business deductions.

Estimating and Proposal Software

One of the most critical tools for home remodeling businesses is estimating and proposal software. Solutions like Handoff allow contractors to generate instant cost estimates, create professional proposals, and streamline the bidding process. Because these tools help contractors save time and win more jobs, they are considered a legitimate business expense. Subscription fees for Handoff and similar estimating platforms such as Buildertrend, or Houzz Pro are fully deductible.

Accounting and Invoicing Software

Tracking income and expenses is essential for financial management. If you use accounting software like QuickBooks, FreshBooks, or Wave to manage invoices, payroll, and business expenses, those costs can be deducted. Many contractors also use payment processing apps like Square, PayPal, or Stripe to accept payments from clients, and the transaction fees associated with these services can also be written off.

Project Management and Scheduling Tools

Keeping remodeling projects organized requires effective project management software. Platforms like Trello, Asana, and Monday.com help teams manage tasks, track project timelines, and assign responsibilities. Scheduling software such as JobNimbus, ServiceTitan, or Housecall Pro is also deductible, as it helps streamline appointment setting, crew scheduling, and job tracking.

Marketing and Social Media Tools

Software used for marketing and lead generation is another deductible expense. If you run paid advertising campaigns or manage social media content, tools like Canva or tools for social media scheduling qualify. Email marketing platforms such as Mailchimp or ConvertKit are also considered part of your marketing expenses and can be fully deducted.

Cloud Storage and Digital Collaboration

Many contractors rely on cloud-based storage to keep project files, estimates, and client records accessible from anywhere. Subscription costs for Google Drive, Dropbox, or Microsoft OneDrive are deductible. Additionally, collaboration tools like Slack and Zoom, which facilitate communication with clients and subcontractors, qualify as business expenses.

GPS and Fleet Management Software

If your business operates multiple vehicles or has employees driving to job sites, GPS tracking and fleet management apps such as Samsara or Verizon Connect can be deducted. These tools help monitor mileage, optimize routes, and reduce fuel costs, making them an essential part of business operations.

Record-Keeping for Software and App Deductions

To maximize deductions, keep track of all subscription-based services and software purchases throughout the year. Many of these expenses are billed monthly or annually, so reviewing bank statements and credit card transactions can help ensure you don’t miss any write-offs. Using software like QuickBooks or Expensify can help categorize and organize these expenses efficiently.

Investing in the right software and apps can help contractors automate their business operations, save time, and increase profitability. Since these digital tools are essential for estimating, invoicing, scheduling, and marketing, they are fully deductible as business expenses. By keeping accurate records and leveraging the right platforms—such as Handoff for instant estimates and proposals—you can maximize your deductions while optimizing your workflow. 

Contractor Tax Write-Off #7: Employee Wages and Subcontractor Payments

For home remodeling contractors, labor is one of the largest business expenses. Whether you have full-time employees, part-time workers, or independent subcontractors, the IRS allows you to deduct wages, salaries, and related payroll expenses. This includes direct labor costs for employees working on remodeling projects, as well as administrative staff handling office operations.

Employee Wages and Salaries

If you employ workers directly, their wages and salaries are fully deductible as business expenses. This applies to hourly workers, salaried employees, and even temporary hires brought on for specific projects. Payroll-related expenses such as overtime pay and bonuses are also deductible. Keeping accurate payroll records and using accounting software ensures compliance and maximizes deductions.

Independent Contractors and 1099 Payments

Many remodeling businesses hire subcontractors or specialists, such as electricians, plumbers, and painters, rather than keeping full-time employees. Payments made to these independent contractors are fully deductible, provided they are classified correctly under IRS guidelines. If you pay a subcontractor $600 or more in a year, you must issue them a Form 1099-NEC and report the payment to the IRS.

Payroll Taxes and Employer Contributions

Beyond wages, businesses must also pay payroll taxes, which are deductible. This includes employer-paid portions of Social Security, Medicare (FICA), federal and state unemployment taxes (FUTA and SUTA), and workers’ compensation insurance. If you offer retirement plans like a SEP IRA or 401(k) with employer contributions, those contributions can also be written off as a business expense.

Employee Benefits and Insurance

If you provide health insurance, dental insurance, or life insurance for employees, the cost of premiums is deductible. Other fringe benefits such as education reimbursement, wellness programs, or work-related training are also considered tax-deductible business expenses.

Tools and Equipment for Employees

If your business provides tools, safety equipment, uniforms, or work boots for employees, these costs can be deducted. Even job-related training programs or certification courses that improve employees' skills can qualify as deductible business expenses.

Using Payroll Software for Accurate Deductions

Managing payroll efficiently is crucial to ensuring accurate deductions and compliance with tax laws. Many contractors use payroll processing services like QuickBooks Payroll, Gusto, ADP, or Paychex to automate wage calculations, tax withholdings, and direct deposits. The cost of payroll software and third-party payroll processing services is also deductible.

Record-Keeping for Payroll and Subcontractor Payments

To maximize tax deductions, maintain organized records of all employee wages, payroll taxes, and subcontractor payments. Keeping copies of payroll reports, W-2s, 1099s, and tax filings ensures that all labor-related expenses are properly documented. Using a dedicated business bank account for payroll transactions simplifies record-keeping and prevents issues during tax season.

Wages and labor costs are one of the largest deductions available to home remodeling contractors. Whether you have full-time employees or subcontract labor, tracking wages, payroll taxes, and benefits accurately ensures you maximize deductions while remaining IRS-compliant. By leveraging payroll software and maintaining detailed records, you can reduce your taxable income and keep your business running smoothly.

General Contractor Tax Write-Off #8: Liability and Workers’ Compensation Insurance

For home remodeling contractors, insurance is a necessary expense to protect the business from financial risks, liability claims, and job site accidents. The IRS allows you to deduct the cost of business-related insurance policies, including general liability insurance, workers’ compensation insurance, vehicle insurance, and property insurance. These deductions help lower taxable income while ensuring legal compliance and financial security.

General Liability Insurance

General liability insurance is one of the most critical policies for contractors and remodelers. It covers claims related to property damage, bodily injury, and legal expenses arising from job site accidents or client disputes. Since this insurance is essential for protecting your business against lawsuits, premiums paid for liability coverage are fully deductible.

Workers’ Compensation Insurance

If you have employees, workers’ compensation insurance is typically required by state law. This policy covers medical expenses, lost wages, and rehabilitation costs for employees injured on the job. Since workers’ compensation is a necessary business expense, the premiums paid are deductible, reducing the overall tax burden.

Commercial Auto Insurance

Contractors often rely on work trucks, vans, and other vehicles for transportation between job sites, material pickups, and client meetings. Commercial auto insurance premiums for business-owned vehicles are fully deductible. If a personal vehicle is used for both business and personal use, only the business-related portion of the insurance cost can be deducted.

Property and Equipment Insurance

Many contractors own valuable tools, equipment, and machinery that need protection. Property insurance policies covering tools, trailers, storage units, or office buildings are fully deductible. If your business rents an office, shop, or warehouse, any renter’s insurance paid to protect that space also qualifies for a deduction.

Umbrella and Excess Liability Coverage

Some contractors purchase umbrella liability policies for additional protection beyond standard general liability coverage. These policies provide extra coverage against large claims that exceed normal policy limits. If this insurance is solely for business purposes, the premium payments are fully deductible.

Health and Disability Insurance for Self-Employed Contractors

If you are a self-employed contractor without employees, you may still deduct health, dental, and vision insurance premiums paid for yourself and your family. Additionally, disability insurance that replaces lost income due to a work-related injury may also qualify as a deductible expense, though specific IRS rules apply.

Surety Bonds and License Bonds

Many remodeling businesses need surety bonds or contractor license bonds to operate legally. These bonds act as financial protection for clients in case of contractual disputes or incomplete work. Since bonding is often a legal requirement, premiums paid for surety or license bonds are tax-deductible.

Record-Keeping for Insurance Deductions

To ensure compliance and maximize deductions, keep detailed records of all insurance premium payments, including invoices, bank statements, and policy agreements. Using accounting software like QuickBooks or Wave can help categorize these expenses and simplify tax preparation. If insurance premiums are included in bundled policies or auto-pay subscriptions, review statements regularly to ensure all deductible costs are accounted for.

Insurance is an essential expense for home remodeling contractors, providing financial protection against lawsuits, injuries, and equipment losses. By deducting the cost of liability insurance, workers’ compensation, commercial auto policies, and other business-related coverage, contractors can significantly reduce their taxable income. Keeping accurate records of insurance expenses ensures compliance and maximizes tax savings. Let me know if you need help tracking or categorizing these deductions for your business!

General Contractor Tax Write-Off #9: Job Supplies

Job supplies are essential materials and consumables used on remodeling projects. Unlike tools and equipment, which may be used across multiple jobs, job supplies are typically consumed or depleted during a specific project. The IRS allows contractors to deduct the cost of these materials as necessary business expenses, reducing taxable income.

Common Deductible Job Supplies

Contractors and home remodelers frequently purchase nails, screws, adhesives, caulking, sandpaper, masking tape, drop cloths, cleaning supplies, disposable gloves, and safety gear for their projects. These items, though small, can add up quickly throughout the year. Since they are directly related to completing remodeling work, they are fully deductible.

Lumber, Paint, and Construction Materials

Materials used on client projects, such as lumber, drywall, insulation, concrete, tiles, paint, and plumbing fixtures, qualify as job supplies if they are used up during the project. While large-scale materials may be categorized under project costs, consumable supplies that don’t remain as part of the finished structure can be deducted separately.

Small Parts and Fasteners

Fasteners like brackets, screws, nails, and anchors are required for nearly every remodeling job. Since these are regularly purchased and used on a per-project basis, they are considered deductible supply costs. Keeping receipts for bulk purchases ensures that these expenses are properly tracked.

Protective and Disposable Items

Items like dust masks, disposable gloves, protective eyewear, knee pads, and boot covers are necessary for safety and compliance on job sites. If these items are purchased for business purposes, their costs can be written off. Additionally, first-aid kits and fire extinguishers used on-site qualify as deductible expenses.

Temporary Job Site Supplies

Many contractors use tarps, plastic sheeting, construction paper, or temporary fencing to protect the work area during projects. These temporary supplies are essential for maintaining a clean and safe job site and are considered deductible materials.

Storage and Transport Materials

If you purchase bins, tool bags, or other temporary storage solutions for organizing supplies on job sites, those costs may also qualify for deductions. Similarly, expenses related to packing and transporting materials to and from job sites—such as rope, bungee cords, or straps—are eligible write-offs.

Record-Keeping for Job Supplies

Since job supplies are often purchased in small amounts throughout the year, keeping organized records is essential. Contractors should maintain receipts, invoices, and purchase orders for all supplies used on remodeling projects. Using accounting software like QuickBooks, Xero, or Wave can help categorize supply expenses and ensure that every deduction is captured.

Supplies are an ongoing expense in the home remodeling industry, and every purchase made for job-related use is deductible. By tracking expenses for fasteners, adhesives, paint, safety gear, and other consumable materials, contractors can lower their taxable income while maintaining efficient job site operations. Keeping accurate records and categorizing these costs properly ensures maximum tax savings. Let me know if you need help setting up an efficient system for tracking job supply expenses!

For home remodeling contractors, wearing the right gear is essential for both professionalism and safety on job sites. The IRS allows deductions for work-specific clothing, branded uniforms, and protective equipment, provided these items are necessary for the job and not suitable for everyday wear. This means that while a branded work shirt qualifies, a general pair of jeans or sneakers does not.

Contractor Tax Write-Off #10: Branded Uniforms and Work Apparel

If you purchase branded shirts, jackets, or hats with your company logo, these qualify as a marketing and business expense. Uniforms that display your company’s branding not only create a professional image but also serve as advertising, making them fully deductible. This includes embroidered shirts, custom vests, and other apparel that identifies your business.

Protective Workwear and Safety Equipment

Certain clothing items required for safety and job performance are deductible, including high-visibility vests, steel-toed boots, gloves, knee pads, and heavy-duty work pants. If these items are essential for job site safety and compliance with OSHA regulations, their costs can be fully written off as a business expense.

Hard Hats and Personal Protective Equipment (PPE)

Items like hard hats, safety glasses, ear protection, respirators, and dust masks are required for many remodeling jobs, particularly when dealing with construction dust, hazardous materials, or loud equipment. Since these are directly related to on-the-job safety, they qualify as a deductible business expense.

Cold Weather and Specialty Gear

If you work in cold climates, insulated work jackets, thermal gloves, and waterproof boots may also be deductible, provided they are used exclusively for work. Similarly, if your job requires specialized protective clothing, such as flame-resistant apparel or chemical-resistant suits, these costs qualify for a tax write-off.

Laundry and Maintenance Costs for Uniforms

If you regularly wash and maintain your work uniforms or protective gear, dry cleaning and uniform cleaning services can be deducted as a business expense. However, this applies only if the clothing is specifically required for work and is not suitable for personal wear.

Record-Keeping for Uniform and Protective Gear Expenses

To ensure compliance with IRS guidelines, maintain receipts and invoices for all workwear and safety gear purchases. If you provide uniforms to employees, keep records of those expenses as part of your payroll or business expenses. Using accounting software like QuickBooks can help categorize these deductions properly.

Investing in branded uniforms, safety workwear, and protective equipment is both a business necessity and a tax-deductible expense for contractors. By tracking the costs of branded apparel, protective gear, and uniform maintenance, home remodelers can reduce their taxable income while maintaining safety and professionalism on job sites. 

General Contractor Tax Write-Off #11: Bank and Credit Card Fees

For home remodeling contractors, managing finances efficiently is crucial, and banking and credit card fees are an unavoidable part of doing business. The IRS allows deductions for business-related banking fees, transaction costs, and credit card processing charges, as long as they are directly tied to your company’s operations. These deductions help lower taxable income while covering the necessary costs of financial management.

Monthly Bank Account Fees

Many business checking and savings accounts come with monthly service fees, which can be deducted as a necessary business expense. If you maintain multiple accounts for payroll, expenses, and operating costs, all associated banking fees can be written off.

Transaction and Processing Fees

Every time a client pays via credit card, a percentage of the transaction is deducted as a processing fee by services like Square, Stripe, PayPal, or QuickBooks Payments. These fees can add up, especially for high-volume businesses, but they are fully deductible. If you use an invoicing system that charges a transaction fee for ACH transfers or online payments, those costs also qualify.

Credit Card Interest on Business Purchases

If you use a business credit card for purchasing materials, tools, or other business-related expenses, the interest paid on the card is deductible. However, personal credit card interest is not deductible unless it is tied exclusively to business expenses. Keeping separate credit cards for business and personal use simplifies tracking these deductions.

Overdraft Fees and Late Payment Charges

While it’s best to avoid overdraft fees and late payment penalties, if they occur on a business bank account or business credit card, they are tax-deductible. These charges are considered part of the cost of doing business.

Wire Transfer and Foreign Transaction Fees

If you pay subcontractors or suppliers via wire transfers or international transactions, the associated fees are deductible. Contractors working with overseas vendors, such as for custom materials or software services, should track these fees to ensure they are included in tax write-offs.

Merchant Account and POS System Fees

Many remodeling businesses use point-of-sale (POS) systems or merchant accounts for accepting payments. Whether you use Square, Clover, QuickBooks Payments, or PayPal Here, the subscription or processing fees you pay for these services are deductible. This also applies to any rental or service fees for credit card readers and payment terminals.

Loan Origination and Banking Charges

If your business takes out a loan for purchasing equipment, vehicles, or business expansion, the origination fees, financing charges, and administrative banking costs can be deducted. Keep detailed records of these fees to ensure they are properly categorized.

Record-Keeping for Banking and Credit Card Deductions

To maximize deductions, track all banking and credit card fees through monthly statements, transaction records, and accounting software like QuickBooks, Wave, or Xero. Separating personal and business finances ensures that only legitimate business fees are deducted.

Bank and credit card fees are often overlooked deductions that can add up over the course of a year. By tracking service fees, transaction costs, credit card interest, and processing charges, home remodeling contractors can lower their taxable income while ensuring efficient financial management. Let me know if you need help setting up a streamlined tracking system for these deductions!

Other Tax-Write Offs For General Contractors

Professional Services

Hiring professionals to keep your business running smoothly is a smart investment—and it’s also tax-deductible. Fees paid to accountants, bookkeepers, legal consultants, and business advisors all qualify. Whether you hire a CPA to handle your taxes, a lawyer to review contracts, or a consultant to streamline your business operations, these costs can be fully written off. Just be sure to retain invoices and agreements to prove the expenses in case of an audit.

Continuing Education

Learning never stops, especially in the home remodeling industry. Any money spent on trade certifications, licensing courses, industry seminars, and online training is tax-deductible. If you take a course on new construction techniques, enroll in a business development workshop, or attend an industry expo, those costs can be written off. Even subscriptions to educational materials like trade magazines or online memberships count—just make sure they’re directly related to your business.

Depreciation

Big purchases like trucks, heavy machinery, trailers, and expensive equipment don’t just disappear from your balance sheet. Instead, they depreciate over time, and you can deduct a portion of their cost each year. If you want to deduct the entire cost upfront, Section 179 allows you to do just that for certain purchases, meaning you can get a big tax break in the year you buy it instead of spreading it out. A tax professional can help you decide the best strategy.

Rent for Business Property

If you rent an office space, warehouse, storage facility, or workshop, those costs are fully deductible. Even if you rent a job site trailer, that counts as a business expense. Be sure to also include utilities, maintenance, and property insurance if they are specifically for the rented space. If you work from home, check if you qualify for the home office deduction instead.

Phone and Internet Bills

Whether you're calling clients, checking job site schedules, or running marketing campaigns, your business phone and internet expenses are tax-deductible. If you use a personal phone for business, you can deduct only the percentage of usage that applies to work—so if 70% of your calls and data are business-related, you can deduct 70% of the bill. If you have a dedicated business phone line, that expense is fully deductible.

Meals and Entertainment

Taking a client out for lunch to discuss a project? Hosting a team dinner? You can deduct 50% of the cost for meals and entertainment related to business activities. This includes food at networking events, coffee meetings with potential clients, and meals while traveling for work. Just make sure to keep receipts and note the purpose of the meal, so it’s clear it was business-related.

Travel Expenses

If you fly out to a conference, stay in a hotel for a remote project, or rent a car for business travel, those costs are all deductible. This includes airfare, lodging, rental cars, taxis, parking, baggage fees, and even per diem expenses for meals while on the road. To qualify, travel must be for a legitimate business purpose, so keep records of itineraries, hotel receipts, and business-related activities during the trip.

Bank and Credit Card Fees

Running a business often means dealing with monthly service fees, overdraft charges, wire transfer fees, and credit card processing fees. If you use payment processors like Square, PayPal, or Stripe, their transaction fees are also deductible. Credit card interest is deductible too, but only on business-related purchases—so keep business and personal accounts separate to make tracking easier.

Business Licenses and Permits

Every contractor needs the right paperwork to operate legally, and the costs of business licenses, contractor permits, and professional certifications are all tax-deductible. If you renew your contractor’s license, pay for a new specialty certification, or obtain city/state permits for projects, those expenses can be written off.

Retirement Contributions

Planning for the future? Contributions to solo 401(k)s, SEP IRAs, or SIMPLE IRAs are not only good for retirement but also reduce your taxable income. The IRS allows self-employed contractors to deduct contributions to these accounts, lowering their tax bill while saving for the long haul. Since tax rules can be complex, it’s a good idea to consult a tax professional to determine how much you can contribute and deduct each year.

Why Smart General Contractors Use These Tax Write-Offs

Taxes might not be the most exciting part of running a contracting business, but knowing what you can write off is like finding extra cash in your tool belt. The key to saving money is keeping good records—because if you don’t track it, you can’t deduct it.

A shoebox full of crumpled receipts isn’t a great system (trust me, the IRS isn’t a fan). Instead, use accounting software or hire a bookkeeper to help you stay organized and make tax time way less stressful. And if you're ever unsure about a deduction, talk to a tax pro—it’s a small price to pay to avoid a nasty audit.

At the end of the day, the goal is simple: pay less in taxes and keep more of what you’ve earned. By tracking your expenses, taking advantage of deductions, and running your business like a pro, you’ll make tax season just another item on your checklist—not a financial headache. Now go put that saved tax money to good use—maybe a new set of tools or a well-earned vacation!