25 Tax Deductions for Tradesmen and Contractors That Can Save You Money All Year Long

While almost everyone dreads tax season, contractors and self employed tradespeople are especially prone to feeling stress and worry during this time. After all, it can be confusing to know the difference between deductible items and regular spending. What can you use? What can you not? Ugh!

Numerous costs, fees and expenses can be deducted on the Schedule C Profit and Loss Statement, 1065 Partnership return, or the 1120/1120S Corp returns. When handled correctly, contractor tax deductions can add up to big savings in income taxes.

Let’s look at 25 helpful tax deductions tradesmen and contractors can use to lighten your tax burden and keep more money in your pockets.

Day-to-day tax deductions for contractors & tradesmen

1. Mileage

Driving to customer residences or job sites can add up to many miles, which means large deductions. According to the IRS, the deduction per mile was 58.5 cents through June 30, 2022, and 62.5 cents for the rest of 2022. 65.5 cents is the rate for 2023.

2. mobile phone charges

Contractors use their phones to schedule appointments, answer questions, organize crews, and for a hundred other things throughout the workday. Mobile plans are at least partially tax deductible (depending on if the contractor uses it for personal use, too). 

Related: How to File Taxes: A Helpful Checklist for Small Business Owners

office expense tax deductions for contractors & tradesmen

3. office rental costs

Contractors who work out of a trailer or other office site can deduct the rent from their taxes. This relates to construction workers and contractors, especially.

4. home office deduction

If a tradesman has a designated space in their home where they conduct business, they may be able to take a home office deduction. 

5. office equipment

Buying a desk, chair, shredder, laptop, and other office furnishings is necessary for running a business. These purchases can be used as deductions (some may need to be depreciated over multiple years).

6. office supplies

Items like pens, typing paper, staples, paper clips, and other supplies used in an office can be deducted from a contractor’s taxes. 

7. utility charges

Electric, water, and internet charges for the business office are deductible.

 Business materials tax deduction for contractors & tradesmen

8. cost of tools and equipment

Ladders, tool belts, drills, and all other equipment required for conducting business are tax deductible. Construction workers, plumbers, carpenters, masons, painters, and landscapers and all self-employed workers who invest in tools and equipment can benefit from this deduction.

9. cost of safety gear

Steel-toed shoes, safety goggles, hard hats, and anything else the contractor feels is necessary to keep themselves safe during the workday can be used as a tax deduction. 

10. tool and equipment repairs and maintenance 

The cost of keeping tools and other equipment in safe, top working condition is tax deductible. 

Related: How Much Do You Make After Taxes?

 Marketing & advertising tax deductions for contractors & tradesmen

11. advertising

Fees for running ads online or in print and advertising on social media are all deductible business expenses.

12. website hosting fee

A website is a vital piece of many contractors’ marketing plans. The costs of setting up and maintaining a website are tax deductible.  

13. trade show costs

Contractors can deduct the costs of exhibiting or attending trade shows in an attempt to gain business or further their company’s success. 

 travel expense tax deductions for contractors & tradesmen

14. contractor meals

Typically 50% of meal costs while traveling overnight for business can be tax deductible. If you incur expenses on business trips, double check to see if you can save money with travel expense tax deductions.

15. costs for parking and tolls

Fees for parking to see a client or visit a job site, and paying tolls to get there, are both costs that can be deducted. 

16. material shipping charges

It’s considered a deductible expense when tradesmen or contractors ship tools, machinery, or any other goods required and necessary to perform the job function.

Professional enrichment tax deductions for contractors & tradesmen

17. cost of training 

The cost of attending online or in-person classes to increase their skill sets or learn a new skill is considered a valid tax deduction. 

18. professional organization fees

Networking associations and groups may charge to attend. These fees are tax-deductible. 

19. union dues

Trade union dues can be deducted from a contractor’s taxes.  

20. subscription costs

The cost of trade magazines and other publications that inform and educate the contractor can be deducted. 

Related: 10 Everyday Purchases That Are Tax-Deductible

miscellaneous tax deductions for contractors & tradesmen

21. Insurance premiums

Contractors should be covered by insurance to protect their business against negligent or wrongful acts.

22. professional service fees

Accountant and attorney fees are tax-deductible expenses.

23. unpaid invoices

It’s never fun to be stiffed by a client, but at least the amount owed may be a tax deduction. If the invoice was previously claimed as income, it can be a deduction. 

24. payroll costs

Wages and bonuses paid to workers, assistants, and other staff are deductible from the contractor’s taxes. 

25. costs for subcontractors

All subcontractor pay is considered a valid business expense and is tax deductible.

leave your taxes to the professionals at chaliff + associates

We know that you’re a busy contractor or tradesperson, which means you don’t have time to research all the self employment tax deductions available to you. We’re experts at helping busy self-employed people like you find all the independent contractor tax deductions you deserve to help you succeed.

Instead of stressing out about your self employed bookkeeping and accounting, why not turn your taxes over to the experts? We’re familiar with the bookkeeping and accounting needs of contractors and workers just like you. We help electricians, roofers, plumbers, carpenters, landscapers, painters, construction workers, and HVAC and heating experts save time and money at tax time.  

Plus, we can handle your accounting and bookkeeping all year long, so you can focus on what you do best: operating and growing your business. Schedule a call with us today to learn how we can help you with your bookkeeping and accounting needs!