The tax deductions available to self-employed individuals in the construction industry are largely similar to those available to other self-employed individuals. However, there are a few deductions that may be particularly relevant to construction workers:
You can deduct the cost of building materials that you purchase for a specific job. It's important to keep detailed records of these expenses, including receipts, invoices, and purchase orders.
You can deduct expenses related to specific job sites, such as rental fees for heavy equipment, safety gear, and materials.
You can deduct the cost of business insurance, such as liability insurance or workers' compensation insurance.
If the subcontractor is considered an independent contractor, you can deduct the payments you made to them as a business expense. However, if the subcontractor is considered an employee, you cannot deduct the payments as a business expense but must instead treat the payments as wages and withhold taxes accordingly.