Strategic Accounting LLC

01/09/2026

September 15 is coming up, and there are two federal tax deadlines construction and contractor business owners may need to keep in mind. They are:

Your third-quarter estimated tax payment.
The second is the deadline for extended S Corporation and partnership tax returns.

If either one applies to you, now is a good time to make sure your payment is scheduled and your tax preparer has everything they need. If you'd like more information, we put together a simple overview here:

https://strategic.accountants/blog/september-15-tax-deadlines-contractors/

26/08/2026

If you run a construction company with projects that last several weeks or months, you know the cash in your bank account doesn't always tell you how those jobs are actually doing.

A Work-in-progress (WIP) schedule compares how far along each job is with how much you've billed.

If you have a few minutes and are interested, here's a simple overview of how WIP works and what construction business owners can be watching for:

A simple overview of how a WIP schedule helps construction companies understand project progress, overbillings, underbillings, and future cash needs.

29/01/2026

Quick January reminder: if your business paid contractors (or other vendors) for services this past year, you may need to send them a 1099.

What’s a 1099-NEC?

The most common one for small businesses is the 1099-NEC (“Non-Employee Compensation”). Think of it like a yearly summary of what you paid a contractor or vendor (outside of payroll) for services.

First step: make sure you have a W-9

If you pay contractors, the best practice is to collect a W-9 before you pay them. But if you didn’t, no worries - it’s not too late to request W-9s now so you can file correctly.

Not sure if someone needs a 1099?

The rules can get a little confusing (and there are a few exceptions). If you’re unsure whether a vendor should get one, check with your tax professional or bookkeeper.

Filing the 1099:

If your business files more than 10 informational returns, you may be required to e-file rather than paper file the returns. Either way, e-filing is usually faster and easier.

Distributing the 1099s:

In addition to filing, you’re required to send a copy to the vendor. Many businesses still mail these (”snail mail”). You can e-deliver if you have the vendor’s’ consent, and some businesses do both to play it safe.

Deadline reminder: The deadline to send and file 1099s is January 31, 2026 — just a few days away. Penalties can be issued per form for a failure to file. As a tip, it’s important to file late rather than ignore the filing requirements.

17/09/2025

How Contractors Can Use Bonus Depreciation + Section 179

When running a $1M–$5M construction company, new trucks, tools, and equipment are part of your business. While they can be expensive, there are some nice tax benefits.

With the newly reinstated 100% bonus depreciation, you can:

✅ Deduct the full cost of equipment in year one
✅ Expense qualifying trucks and vehicles immediately
✅ Improve cash flow and free up money for growth

Section 179 got a boost too, with a new $2.5M annual limit (phasing out at $4M). While most contractors will use bonus depreciation first, Section 179 can still help when you want to expense specific items without applying bonus depreciation to the entire asset class.

Example: Let's say you:

Buy a $50K truck, but don't want full bonus depreciation this year.
Buy $8.8K in heavy tools that qualify for a 5-year property life.

You can use Section 179 on the tools while spreading the truck deduction.

💡 Important tip: If you operate as an S Corp and finance equipment, talk to your accountant about your "basis" and plan for this. Taking bonus depreciation without planning could create unexpected tax issues.

Bonus depreciation + Section 179 can produce nice tax benefits in 2025, but planning is key. Work with your accountant before making big purchases to maximize savings.

15/09/2025

What is 100% Bonus Depreciation?

🚜 Thinking about buying new equipment, trucks, or tools for your contracting or construction business?

Here's some good news for 2025: The One Big Beautiful Bill Act (OBBBA) restored 100% bonus depreciation for most business property with a recovery period of 20 years or less.

That means you can deduct the entire cost of qualifying assets in the year you put them into service—rather than spreading it out over several years.

What typically qualifies?
Heavy equipment, jobsite tools
Certain vehicles that meet IRS rules
Computers and office equipment

⚠️ Timing matters: If you signed a binding contract before Jan. 20, 2025, that property may not qualify for the new 100% rate—even if you place it in service later.

This is one of the most powerful tax-saving tools available to contractors right now. But keep the whole picture in mind - don't buy equipment you don't need JUST to save on taxes. Depending on your tax bracket, you'd get a 37% deduction at best, so you'd still be worse off. Talk with your accountant or tax preparer before making significant purchase decisions, to see what makes the most sense for you!

10/09/2025

Regular job costing lets you know which projects are profitable and which need adjustment - before it's too late.

Here's an example of how job costing works in practice:

Example: A rooftop unit swap

Labor: 32 hours x $30/hr = $960 → with taxes/benefits = $1,200
Materials: Unit, rentals, misc. = $8,800
Overhead: 5% allocation = $1,000
Total Job Cost = $11,000

If your contract price is $16,000 → that's a $5,000 profit (31% margin).

Without applying overhead, you'd miss the true profitability.

What are the key benefits?
Staying on target – When doing job costing regularly, you'll catch overruns early and issue change orders in time.
Controlling costs – When managers know and track the budget, it will help reduce waste.
Improving bids – Importantly, you can use this information from past jobs to sharpen future pricing.

What are some of the benefits you've noticed when doing job costing?

08/09/2025

What is Job Costing?
When finishing a job, have you ever wondered if you really made money on it?

That’s where job costing comes in.

Job costing tracks every dollar tied to a project so you know its true cost and profit margin. It groups costs into three buckets:
Labor: In-house wages + subcontractors
Materials: Job-specific materials + equipment
Overhead: A portion of your business overhead applied to the job

The formula is simple:
👉 Total Job Cost = Labor + Materials + Overhead Allocation

Compare that number to your contract price, and you’ll see your real profit margin.

For contractors doing $1M–$5M in revenue, job costing helps you:
✅ Price with confidence
✅ Control labor and material costs
✅ Prevent profit leaks from estimate to close-out

Bottom line: If you’re serious about profitability, job costing is your best tool to track it.

05/09/2025

How the Statement of Cash Flows Helps Contractors

Cash flow issues are one of the biggest reasons contractors run into trouble.

Using your Statement of Cash Flows (SOCF) can help you understand where your cash is coming from and going to. Additionally, here are some tips on how to stay ahead and plan for the future:

Plan for payroll & expenses: Start setting aside enough cash for roughly 4–8 weeks of payroll + operating costs in the bank. This cushion keeps jobs and payroll moving even through payment lags.

Build reserves – A rainy-day fund with a few months' expenses can cover surprises like slow-paying customers or unexpected equipment needs. And importantly, gives you some peace of mind!

Track your receivables – Try to keep collection times under 30 days. You can graph your average receivable days, which helps you see your trends. Even if you can't control every delay, watching this trend helps you see what's working..

Manage your debt – The principal you pay on your loan payments doesn't show up on your Income Statement, but it shows clearly on the SOCF. Use this important statement to help give yourself a complete picture of your cash flow.

Plan owner draws – Taking too much out too fast can starve the business of cash. Work with your bookkeeper or accountant to set an efficient, stable plan.

👉 For contractors doing $1M–$5M in annual revenue, reviewing this report monthly with your accountant or bookkeeper is one of the best ways to keep projects profitable and cash flowing.

Remember: Profit looks excellent on paper, but cash is what pays your team, vendors, and bills. The SOCF makes sure you know the difference.

03/09/2025

What is the Statement of Cash Flows?

Have you ever looked at your bank balance and wondered, "Where did all the cash go?"

That's exactly what the Statement of Cash Flows (SOCF) answers.
The SOCF is one of the three main financial reports (alongside the Income Statement and Balance Sheet). While your Income Statement shows profit and the Balance Sheet shows what you own vs. owe, the SOCF shows what's happening with your cash.

For contractors, this is huge. You buy materials up front, make payroll every week, and sometimes wait weeks (or months) to get paid. Cash can feel tight when you add in permitting delays and change orders.

The SOCF is broken up into three parts:

1️⃣ Operating activities – Your cash from your regular operating activities, such as customer payments and paying your expenses (payroll, vendor bills, other costs)

2️⃣ Investing activities – Cash you spend on assets like buying trucks, equipment, or other long-term assets.

3️⃣ Financing activities: Cash either received from or paid off loans, credit lines, and owner draws or distributions.

Quick note: QuickBooks often defaults to the indirect method report, which can be tricky to follow. Ask your bookkeeper for a direct cash flow statement - it's much easier to read.

If you want to know where your cash is - not just your profit - the Statement of Cash Flows should help!

18/08/2025

If the $10,000 cap on state and local tax (SALT) deductions limits your write-offs, here’s good news: the One Big Beautiful Bill Act (OBBBA) temporarily increases the cap starting in 2025.

From 2025 through 2029, you may deduct up to

$40,000 if married filing jointly, or
$20,000 if married filing separately.

The limits adjust annually for inflation beginning in 2026. But unless extended by Congress, the cap returns to $10,000/$5,000 in 2030.

There’s a catch. The increased deduction phases out if your modified adjusted gross income (MAGI) exceeds

$500,000 (joint filers), or
$250,000 (married filing separately).

The phaseout reduces your SALT deduction by 30 percent of MAGI over the threshold, with a floor of $10,000 or $5,000. For example, if your MAGI is $550,000, you can deduct only $25,000 of your SALT, not the full $40,000.

You can still deduct sales taxes instead of income taxes, which is applicable if your state income taxes are low but sales or property taxes are high.

Importantly, state-level SALT deduction workarounds for pass-through entities (such as S corporations, partnerships, or LLCs) remain in place. These allow business entities to pay SALT at the entity level and pass through the deduction to owners—effectively bypassing the federal cap.

To maximize your deduction, consider managing your MAGI by

- spreading capital gains over multiple years;
- staging Roth IRA conversions; or
- leveraging your state’s SALT workaround, if available.