construction workers are a vital part of the employment industry. Without you, our lives would be much different. Our roads, buildings, homes, and other structures would be in a state of disrepair. However, the job can lead to a few out of pocket expenses for worker, which they can deduct at tax time to save a little bit of money.
As an employee of a company, you will get a Form W-2, wage and tax statement, from your employer. In the event that you get payments from construction jobs that arise outside your normal business, those payments are considered self-employment income, and accounted for on a Schedule C, Profit or loss from Business. You must report all self-employment income, either by yourself or through a Form 1099-MISC from those you provided services for. Net income over $400 are subject to self-employment tax expense, and you may need to make estimated tax payments to cover the sum you owe as reported on Schedule C.
Whether you are self-employed or employed by a company you may be able to reduce your tax liability by claiming work related expenses as deductions. Employees deduct expenses on a Schedule A, Itemized Deductions, while self-employed construction workers look to a Schedule C to deduct expenses. Some things that you may be able to deduct:
- Union and trade association dues
- Premiums for Liability protection and protection from wrongful acts
- Equipment or devices replaceable inside of one year
- Safety equipment, for example, steel toed boots
- Uniforms that you are obligated to wear, as long as they are not suitable to ordinary, everyday streetwear (hard hats, coveralls, etc.)
- State and local government taxes, flat rate occupational taxes, or licenses, as long as they are not for initial certification.
- Subscriptions to trade journals
If you are experiencing a bout of temporary unemployment, you may be able to deduct job search costs as long as you are searching for a position in construction. Holding some odd employments while unemployed doesn't influence your ability to deduct these costs.
Business related instruction is deductible provided it meets certain standards. Generally, professional classes, refresher courses, and classes that teach new advancements can be deducted. The education can't qualify you for another occupation or be used to help you meet the base prerequisites of your employment.
You may be qualified for other business related deductions in the event that you are self-employed. These expenses are deductible on a Schedule C:
- Business bad debts
- Car and truck costs when going between work sites
- Employee pay, rewards, and commissions
- Legal and expert expenses such as accounting advice
- Business use rental expenses for property rented
- Advertising expenses
- Tool repair and upkeep
- Supplies and miscellaneous items
- Excise taxes and individual property fees
- Travel costs, subject to restrictions, for work far from your typical work home for more than a regular day: including tolls, meals, parking fees, and fares