Construction & Contractor CPA Services

Long-term contracts — starting in one tax year and finishing in another — generally must be reported that way, with an exception for smaller contractors whose contracts are expected to complete within two years, tested against an inflation-indexed receipts figure. The current year's number governs. Construction.

Where percentage-of-completion is used, completed contracts are re-run against actual costs and interest runs in either direction on the difference. Smaller contracts are excepted. It is a filing that follows the method, and it is the one contractors most often arrive not knowing about.

Whether retainage belongs in this year's income depends on your method of accounting and when the right to receive it becomes fixed. It is a timing question with real money attached, and it is better settled in advance than at a filing deadline — construction.

Because it shows over- and under-billings, which is how you and your bonding agent and your bank read the health of open jobs. It is built from job-level costing during the year; reconstructed afterwards it is an estimate dressed as a report.

Coding costs to the job as they happen rather than allocating them later. Without it you know whether the company made money but not which work made it, which is the number that changes what you bid on. Bookkeeping is where it gets set up.

A contractor improving real property is generally treated as the consumer of the materials, so the tax attaches when you buy them rather than being collected from the customer. Selling goods at retail is a different transaction with a different answer — and the invoice wording does not settle which one a job was.

Then the mix has to be tracked rather than estimated, because the two are taxed differently and an assessment tends to apply the less favorable assumption to everything. It is a set-up question for the books — construction.

Often, through immediate expensing and bonus depreciation, and federal law changed how they interact as recently as 2025. The placed-in-service year decides which rules apply. Taking the largest deduction is not automatically right if next year is bigger — tax planning.

It is a facts test about control, not a preference expressed on a 1099. Getting it wrong is back payroll tax with penalties, and it surfaces on audit or on an injury claim. Licensing and insurance questions belong with your attorney and carrier.

A job over the state line can create a filing obligation, a withholding obligation and a registration requirement in that state. It is far cheaper raised before the bid than unwound two years later — business tax.

As part of the contract they belong to, recorded when approved rather than when invoiced, so the job's revenue and cost stay comparable. Unrecorded approved change orders are the most common reason a job looks unprofitable when it is not.

Smaller purchases can often be expensed rather than capitalized under a de minimis safe harbor, with the per-item ceiling depending on whether you have an applicable financial statement, and a written policy applied consistently is part of it.

Write-offs depend on how the vehicle is classified and what it weighs, and the choice between mileage and actual costs is made per vehicle. Per-vehicle records kept during the year are what make it stand — see HVAC and plumbing.

Direct costs attach to a job — labor, materials, subs, equipment on site. Indirect costs support production generally and are allocated. Where the allocation is arbitrary, job profitability is fiction, and it is worth agreeing the basis once.

In South Carolina, municipal business licenses are a real and separate obligation from state tax registration, and contractors working across jurisdictions can need more than one. See Mount Pleasant and Summerville for how local this gets.

A surety reads working capital, equity and the work-in-progress schedule, and it wants statements that are consistent period to period. Books closed monthly produce that; books assembled for the application rarely survive the questions — bookkeeping.

It depends on profit, on how much of it is a return on your labor, and on whether a defensible salary can be supported alongside payroll obligations. It is a modeling exercise on your numbers — see LLC vs S corporation in South Carolina.

Money taken before work is performed is generally a liability rather than revenue until it is earned, and treating deposits as income overstates a good month and understates the next. It matters more for accrual-method contractors than cash-basis ones.

Contract and change orders, cost detail by category, billing history, retainage, and lien or completion documents. Assembled at the job level they answer almost every question an examiner, a surety or a buyer will later ask.

Yes — construction is one of the five industries the practice concentrates in, and the tax questions specific to it are set out on the construction page.