If you work in the construction industry, it’s important to be aware of some of the various tax deductions that are available to you. Here’s a quick overview of some of the most common tax deductions claimed by workers in various construction fields.
Construction equipment is expensive, but fortunately you’ll be able to deduct the costs of many of the tools you need for the job. These include ladders, air compressors, various supplies and materials, and even small tools that will last less than a year, such as some types of wrenches, saws and hammers. You can even claim the same expenses every year, so long as you account for depreciation.
Construction employment often requires ongoing training and education to make sure you’re up to date with the latest methods and practices. Many construction workers invest quite a bit of money back into their careers for costs such as trade school, renewing their licenses, subscribing to trade journals and paying for memberships to unions, business associations and other types of professional organizations. These sorts of job-related fees are deductible on your taxes.
Beyond your tools, there are other types of supplies you may regularly use at job sites that are tax deductible, so long as they’re work-related. Examples of such gear include steel-toed boots, hard hats, tool belts, goggles, gloves, clothing and other safety equipment. Some construction companies reimburse employees for work gear (to an extent), but if yours doesn’t you can still benefit from tax deductions for those expenses.
Mileage is probably the most significant deduction you’ll benefit from as a construction worker. You’ll need to put in miles traveling to and from job sites and various other business-related ventures. A morning commute doesn’t count toward deductible mileage, but if you’re traveling in between multiple job sites or taking other business trips, those miles certainly do count.
You can use either the standard mileage method or the actual expenses method for your deductions. The standard mileage rate was set at 54.5 cents per mile in 2018. Multiply that rate by the number of miles you traveled to get your deduction.
The actual expenses method combines all travel-related costs and itemizes each of those expenses individually. More people use the standard method, because you’ll need to have more receipts when using the actual expenses method.
Other travel costs
If you do make any overnight trips as part of your construction work, you can deduct many travel expenses, including parking fees, tolls and lodging charges.
To learn more about the various deductions you can benefit from as an employee or independent contractor in the construction industry, contact our team of tax preparation professionals at Patin and Associates today.