Guide · 6 min read
Contractors don't fail from lack of work — they fail from not knowing which jobs make money. Here's how to keep books that show real margin per job, not just deposits in the bank.
Free business checking + a business credit card. Customer deposits in, sub payments and materials out. No more 'is this work or personal?'
Tag each expense to a job: materials, sub labor, permits, equipment rental, mileage. At job close you'll see real gross margin — not guesses.
Any sub paid $600+ in a year needs a 1099-NEC by January 31. Get the W-9 before the first check goes out — chasing them in January is brutal.
Move 25–30% of net profit to a tax savings account. Above $80k net, a SEP-IRA or Solo 401(k) can shelter $20–60k of taxable income.
Tag expenses to jobs, capture sub payments, and see margin instantly. Built for the field, not for accountants.
Start freeOne business checking account, one business credit card, and a job-costing system. Tag every expense to a specific job — materials, sub labor, permits, mileage. At the end of every job you'll know if it actually made money, not just whether the deposit hit.
Yes. Without job-level cost tracking, you can only see whether the business made money overall — not which jobs are profitable. Most contractors discover after switching to job costing that 20% of jobs are losing money and need a price rethink.
Self-employment tax (15.3%) plus federal/state income tax, all paid quarterly. You can deduct materials, sub payments, equipment depreciation, vehicle/mileage, insurance, licenses, permits, and a portion of your home if you have a dedicated office. 1099-NECs go to every sub you paid $600+.
Most small contractors use cash basis (simpler — you record income when paid). Above $27M in average revenue you must use accrual. If you take large deposits on long jobs, talk to a CPA about percentage-of-completion accounting.
Any subcontractor paid $600 or more in a calendar year gets a 1099-NEC by January 31. Collect a W-9 BEFORE you pay any sub — chasing them in January is miserable. LLCs taxed as S-corps don't need a 1099 (the W-9 tells you).