Common Tax Deductions for Construction Workers

Regardless of your trade in the construction industry, allowable tax deductions can lower your tax liability and possibly lead to getting a tax refund. You can deduct common expenses such as tools and materials, and even certain other items that come in handy in your business or on the job.

Key Takeaways

  • If you’re an employee of a construction company, you cannot deduct unreimbursed expenses unless they occurred prior to the tax year 2018. If you’re an independent contractor, you can deduct work-related expenses that are ordinary and necessary.
  • The cost of work-related travel—driving to and from work sites, client meetings, and picking up tools and materials—typically is one of your largest deductions.
  • You can also deduct the cost of tools and equipment, work clothing and gear, advertising and marketing expenses, subcontractor or employee salaries, phone and internet costs, membership and license fees, subscriptions, and other expenses.
  • Equipment that you use for multiple years usually must be depreciated over its useful lives, meaning that you claim a portion of them on your taxes over a period of years.

Who Can Take Deductions?

If you’re an employee for a construction company, rather than an independent contractor, and your employer doesn’t reimburse you for expenses on the job, you can usually deduct them for tax years prior to 2018. Beginning in 2018, unreimbursed employee expenses are no longer deductible. Independent contractors generally have no limit on the ability to deduct work-related expenses as long as they are ordinary and necessary for your line of work.

Learn more about tax deductions you can take if you work in the construction industry, including: 

  • Mileage
  • Tools of the trade
  • Steel-toed boots
  • Fees

If you have questions about what your contractors, or you, can deduct, give us a call