Construction moves fast—your accounting should too. We help general contractors and subcontractors with tax planning, job-by-job bookkeeping, payroll, sales/use tax, and IRS representation. We are bilingual (English/Spanish) and align your processes with real on-site conditions.
Table of Contents
8 Construction Tax and Reporting Topics to Review
- Confirm the entity’s federal tax classification before applying shareholder compensation or reimbursement rules.
- Method selection: Cash, completed contract, percentage-of-completion (per current rules)
- Depreciation: §179/bonus, ADS vs. GDS, repairs vs. improvements
- Identify whether the work is a real-property improvement or a sale of tangible personal property, and review the contract type before determining material-purchase tax treatment.
- WIP & job costing: True costing, retainage, and change orders
- Credits: Energy/efficiency and other eligible incentives
- Determine worker classification from the actual relationship; a W-9 or Form 1099-NEC alone does not establish independent-contractor status.
- Financing & bonding: Financial statements for banks and surety bonding
Construction Accounting Stack (QuickBooks Setup)
- Projects/Jobs: Phases, retainage, AIA/progress billing
- Items & assemblies: Materials, labor, overhead
- Purchase flow: POs, item receipts, bills, approvals
- WIP schedule: Physical/financial progress and variances
- AR/AP control: Days to collect/pay, discounts, penalties
- Sales/use tax: Rules, reports, supporting documentation
Monthly Process for Construction Records
- Kickoff & cleanup: Construction chart of accounts, mappings, policies
- Automate: Bank rules, receipts, approvals, and alerts
- Reconcile & review: Banks/credit cards, AR/AP, payroll, and loans
- Close & advise: Job P&L, WIP, KPIs, and quarterly tax planning
Key KPIs for GCs & Subs
Gross Margin by Job
Gross profit margin by job = (recognized job revenue minus job cost of sales) divided by recognized job revenue. Track retainage receivable and collection timing separately; do not add it again if it is already included in recognized revenue.
WIP Variance
Actual progress vs. billed/executed
AR Days
Timely collections = better cash flow and less interest
Labor Utilization
Billable hours / total paid hours
Change Order Impact
Effect of change orders on margins
Cash Runway
Weeks of available cash
Who We Help
- General contractors: Commercial and residential
- Trades: Electrical, HVAC, plumbing, concrete, framing, roofing
- Remodelers & service: Quick tickets and time & materials contracts
- Developers/owners: Capitalization, indirect costs, and sales
Related Services
Explore: Accounting & Bookkeeping, QuickBooks Cleanup & Catch-Up, Tax Preparation, IRS Representation, and Outsourced Controller/CFO.
FAQs: Construction Tax
Can I use the completed contract method?
Accounting-method eligibility depends on the contract type, the date the contract was entered into, the applicable taxable year, statutory exceptions and any applicable gross-receipts test. Review these facts before choosing completed-contract or percentage-of-completion treatment. Financial reporting, regular tax and alternative minimum tax may differ, and changing a tax accounting method may require IRS consent.
How do you handle retainage and AIA billing?
Agree the progress-billing, retainage and change-order work included in the engagement. Setup and review can help identify discrepancies, but do not guarantee prevention of every underbilling error.
What about Florida use tax on materials?
Contractors may owe tax on materials they consume; a resale certificate is not a general exemption for those purchases. Review the actual contract, transaction-specific exemption and use-tax requirements under the applicable Florida rules. Agree the documentation and purchase-review work included in the engagement; continuous monitoring of every purchase should not be assumed.
Do you offer fixed pricing?
Yes. Our packages are carefully and thoughtfully designed to cater to the volume and complexity of your unique business needs. This includes important factors such as efficient inventory management, comprehensive project handling, and accurate payroll processing. Each package is tailored with a clearly defined scope that is mutually agreed upon well in advance, ensuring full transparency and complete alignment with your specific objectives and requirements. This approach allows us to provide you with the most effective and customized solutions possible.
Discuss Your Construction Accounting and Tax Needs
Schedule a comprehensive and thoroughly detailed call designed to meticulously align every aspect of your entity structure, accounting method, and WIP reporting with the unique and specific characteristics of your particular business operations. We proudly offer bilingual services, providing expert support in both English and Spanish to ensure clear, precise, and effective communication at every stage of the entire process, helping you achieve the best possible outcomes tailored to your needs.
Nearby: Tampa • St. Petersburg • Clearwater • Brandon • Wesley Chapel • Pasco • Pinellas • Hillsborough
For a construction consultation, prepare current job reports, contract summaries and a list of unresolved balances. Ask whether prior-period cleanup and coordination with your tax preparer are included. The IRS business recordkeeping guide offers background on source records. Construction reports require complete inputs, appropriate calculations and review before they are used for decisions.