Bookkeeping & Tax Tips for Contractors and Trades Businesses

If you drive for business, you have a deduction available. The question is which method to use — the IRS standard mileage rate or actual vehicle expenses — and whether you’re documenting it well enough to survive scrutiny. Vehicle expenses are one of the most commonly examined deductions in small business audits because of the personal-use component. The 2026 Standard Mileage Rate For 2026, the IRS standard mileage rate for business driving is 72.5 cents per mile. That means

Contractors and tradespeople have a bookkeeping problem that most other service businesses don’t: your income and expenses are tied to specific jobs, your costs include materials and labor that vary project to project, and your cash flow is often uneven because you’re waiting on draws, progress payments, or final invoices. That combination makes it easy to fall behind on bookkeeping and hard to catch up. Here’s a practical system for tracking income and expenses so your books

If you work in the trades, chances are you’ve paid a subcontractor in cash, Zelle, Venmo, or even handed over a check in the middle of a job site. It feels simple—one professional helping another. But when it comes to taxes, undocumented payments can create a world of problems. As a former IRS Agent, I’ve seen it from both sides: honest contractors who just didn’t know better, and messy records that made good people look like they were hiding income. Here’s why every subcontr

Some business transformations don’t start with a new truck or a new crew—they start with a spreadsheet. Meet Jake , a Central Florida electrician who thought he was making decent money… until he realized he couldn’t actually prove it. His invoices looked fine, his phone stayed busy, and his account balance seemed healthy—most of the time. But when tax season rolled around, Jake had a problem: his expenses didn’t match his deposits, and his “books” were just a pile of receipt

If you’re a contractor, tradesperson, or small service business owner, you already know how quickly job costs can get away from you. One week it’s materials and fuel. The next, it’s subcontractor payments and last-minute supply runs. Before you know it, you’ve worked your tail off—but your profit margins look nothing like they should. Here’s the truth: it’s not your pricing that’s broken—it’s your tracking. Let’s talk about why so many contractors lose sight of job costs, wha

Trades businesses are built on skill, hustle, and reputation. Customers trust you to get the job done right, and word of mouth keeps the work flowing. But here’s the catch: even the busiest contractors can bleed profit if their books are a mess. This is the story of Tom (name changed), a small plumbing contractor who thought his business was running smoothly—until bookkeeping cleanup revealed the truth. Tom’s Assumption: “I’m Doing Just Fine” Tom had steady work. His phone r

If you’re a contractor, your supplier knows you better than your banker. You’ve got accounts at Home Depot, Lowe’s, or the local lumber yard. You’ve got tool purchases, materials on credit, and receipts stuffed in the truck glove box. But here’s the catch: if your vendor accounts don’t reconcile with your bank, your books are lying to you. This post is going to show you: Why reconciliation matters for trades businesses. The most common mistakes contractors make. A simple, no

If you’re a contractor—plumber, electrician, carpenter, landscaper—you know how to get the work done. You know your tools, your trade, your clients. But let’s be real: when it comes to bookkeeping, most contractors are winging it. And it’s costing them. Here’s the truth: contractors don’t go broke because of lack of work. They go broke because their books are a mess. This post is going to show you: The most common ways contractors bleed cash. Why it happens. How cleanup can