Deductions for Construction Workers

Construction Worker

Construction workers have an important role in society, as they are generally responsible for construction of our roads, buildings, homes, and many other structures. While we're thankful for you, you can be thankful for tax deductions which can help you recoup some of the out of pocket expenses incurred on the job.

If you are employed by a company, then you will be issued a Form W-2, Wage and Tax Statement at tax time. If you work for yourself, or gain income outside of your employer, that money is considered to be earned through self-employment. Any amount over $400 is subject to self-employment tax and may require estimated tax payments to cover the amount you report on your Schedule C, Profit and Loss from Business. You have to report all your income, whether you receive a Form 1099-MISC from those whom you provide service to, or on your own.

You can lessen the amount you owe in taxes, regardless of whether you are self-employed or employed by a company, by deducting expenses. Employees deduct expenses as itemized miscellaneous deductions on a Schedule A, while self-employed construction workers can use their Schedule C. Some examples of deductible expenses:

  • Union and trade association dues
  • Premiums for Liability protection and protection from wrongful acts
  • Equipment or devices replaceable inside of one year
  • Safety equipment, for example, steel toed boots
  • Uniforms that you are obligated to wear, as long as they are not suitable for, everyday streetwear (hard hats, coveralls, etc.)
  • State and local government taxes, flat rate occupational taxes, or licenses, as long as they are not for initial certification.
  • Subscriptions to trade journals

If you were previously a construction worker but are now facing unemployment, you may be able to deduct job search expenses if you continue to seek work in construction. Odd jobs and employment throughout the unemployment don't inhibit your ability to deduct these expenses.

Education courses can be deducted as long as they meet specific requirements. This includes classes that teach new advancements, refresher courses and professional classes, but not education that qualifies you for a new position or career.

Self-employed construction workers have additional Schedule C deductions including:

  • Business bad debts
  • Car and truck costs when going between work sites
  • Employee pay, rewards, and commissions
  • Legal and professional expenses
  • Business use rental expenses for property rented
  • Advertising costs
  • Tool repair and upkeep
  • Supplies and miscellaneous items
  • Excise taxes and individual property fees
  • Travel costs, subject to restrictions, for work far from your typical work home for more than a regular day: including tolls, meals, parking fees, and fares.