A CPA for contractors who has seen the job site books.

Job costing and work in progress

Job costing means every material purchase, labor hour and sub invoice is tagged to the job it belongs to. Once that is in place, you can see gross margin by job and by job type, and you find out which work to chase and which to price higher.

For businesses with larger or longer jobs, a work in progress schedule compares what you have billed to how far along each job really is. It shows over billing and under billing before it turns into a cash crunch, and it is what bonding companies and lenders ask for.

Job costing is built into the monthly close on our Builder package, and the monthly WIP schedule starts with the WIP package. See the contractor packages below.

Subs, W-9s and 1099s

Every January the same thing happens. The owner sits down to issue 1099s, realizes there is no W-9 for four subs from last summer, and half of them do not answer the phone.

1099-NEC forms are due to the IRS and to the contractor by January 31, and penalties apply per form. For payments made in 2026 and later, a 1099-NEC is required once you pay a sub $2,000 or more in the year, up from $600. The fix is a rule, not a scramble: no W-9, no first payment.

Worker classification matters too. If you control how, when and where someone works, supply the tools and they work only for you, the IRS may see an employee, not a sub. Getting that wrong means back payroll taxes and penalties. We look at it before it becomes a problem.

Equipment, trucks and timing

Section 179 and bonus depreciation let you deduct equipment in the year you buy it, but only if it is placed in service by December 31. Ordered or paid for is not enough. It has to be in your possession and ready to use.

And a big deduction is not always the right move. If this year is slow and next year will be bigger, the deduction may be worth more later. That decision belongs in October, with a projection, not on December 28. It is a standard part of tax planning for our trades clients.

North Carolina does not follow federal bonus depreciation. On your NC return most of it is added back and deducted over the following years, so the state benefit arrives more slowly than the federal one.

North Carolina rules contractors run into

• Sales tax on real property contracts. In North Carolina, a contractor on a real property job generally pays sales tax on the materials it buys and does not charge sales tax to the customer on the contract
• Repair, maintenance and installation services can be taxable in North Carolina, and the line between a taxable repair and a nontaxable real property contract is not always obvious. The paperwork and the invoice wording matter
• General contractor licensing. Projects of $40,000 or more generally require a license from the NC Licensing Board for General Contractors
• Business personal property listing. Equipment and tools are listed with your county each January, and each county runs its own listing

Working jobs in South Carolina as well? That adds SC withholding, licensing and income tax filings. See NC and SC dual-state taxes.

Two real examples

Andrew, a roofing contractor, was an LLC paying taxes on every dollar. We switched him to an S corp. Same business. Different structure. He keeps $14,000 more every year.

Selwyn, a construction contractor, thought he had an S corp. He didn't. The paperwork was never filed. We fixed it and restructured his pay, which is worth about $12,000 a year to him.