Small business owners like plumbers are entitled to several deductions on their income taxes. Unfortunately, you can miss many of these when tax time rolls around. Not taking all your deductions is like leaving money on the table!
If you pay for online or in-person training on a new technique or piece of equipment, you can take it off your taxes. Be sure to include the cost of any conferences and seminars you attended during the year. Typically, the entire cost is fully deductible.
Printed flyers, business cards, Facebook or other online ads, company “swag” (like pens and refrigerator magnets), and anything else you invest in to promote your business are considered advertising expenses. Keep a log of these throughout the year and use them as deductions during tax time.
A website is a valuable tool for sharing information and gaining customers. If you have one, the expenses involved in keeping it up and running can be deducted from your taxes. This includes paying for your domain name, web hosting company (like Wix or GoDaddy), and web developers.
Related: Everything You Need To Know About Sales Tax Rules For The Construction Industry
Most contractors realize they can use office purchases like furniture as common tax deductions. Office improvements, however, are often forgotten during tax time.
If you add new flooring, build a ramp to the office, or update the bathroom, the costs (or at least a portion of them) for these upgrades are usually deductible!
Uniforms and other job-required clothing are tax-deductible. Protective gear is, too. This means those steel-toed boots, eye and ear protection, sturdy gloves, dust masks, and anything else required to safely do your job can help decrease your tax bill.
Successfully running a plumbing business means having the right equipment to do your job. This means tools to perform customer work and the right office equipment to keep appointments, billing, and other responsibilities organized. Both of these are investments in your business that can serve as tax deductions.
Sometimes, you may need to work with professionals outside your company to understand how you should handle situations that arise.
Related: If You're A Plumber, Read These 10 Tax Tips To Save Money
Plumbers may be required to be licensed, which can cost money. This cost is tax deductible. Other fees (even bank fees) are too. And so are trade or networking memberships. Just be sure to keep a log of these as the year progresses so you don’t forget about any of them.
Many plumbing contractors choose to be a due-paying member of a union. These are tax-deductible for the plumber as a business expense.
Finally, paying other people is a big tax deduction often overlooked by plumbers. Did you hire a subcontractor to help with a large job? Or, are there a couple of people you used to help you out during the busy seasons? If so, their wages could end up being a healthy tax deduction for you.
There are a few more things plumbers need to get in the habit of doing if they want to save as much money at tax time as possible.
If your plumbing business is going strong, you may need assistance with the bookkeeping and accounting responsibilities you don’t have time to handle. We’ve helped other plumbing professionals manage their books and taxes with ease. Our licensed CPAs understand the complexity of your business and how your taxes should be handled. Let us take care of your accounting needs so you can be confident you’re in tax compliance but still not paying a penny more than you should. This peace of mind lets you focus on growing your business and servicing your customers. Schedule a call with us today to learn how we help plumbers with their unique accounting needs.