If you earn some or all your income from repairs, maintenance, and other odd jobs associated with homes and businesses, the chances are your tax return is a little bit more complicated than other filers. As a handyman or self-employed home contractor, you have a lot to consider at tax time like how much can you deduct, what can you deduct, and how these expenses affect your overall tax bill.
It doesn’t have to be complicated, and that’s why we put together a list of some of the most common tax deductions for handymen.
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1.Tools and Equipment Are a Deduction!
Obviously one of your biggest expenses will be tools and equipment so keep track of what you spend on drills, hammers, drivers, screws, drywall, and other tools that are essential to your business. Basically, if you bought it at Home Depot it’s probably a tax write-off! If you have any employees or pay subcontractors, programs like QuickBooks can help!
2. Advertising Expenses Are a Tax Write-Off!
It’s important to get your name out there so any cost you pay for advertising can deduct on your tax return. This includes business cards and online advertising on sites like Google, Facebook, and home improvement sites like Angie’s List and HomeAdvisor.
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3. A Handyman Can Deduct Car or Truck Expenses
Your vehicle plays a major role in your business so keep track of your mileage and also keep track of any audit expenses such as repairs tolls and parking professional liability
4. Deduct the Cost of Insurance
If you are a handyman your customers will appreciate knowing that you’re fully insured. It’s pretty essential that you have this you want to keep track of this expense and you’ll help reduce your tax bill
Tip: If you use your home office for your handyman business, then you can deduct up to 100% of internet and phone bills.
5. Deduct Licensing fees and permits
Pulling permits is often a major consideration for renovation and handyman projects. While the bad news is that projects can get hung up in delays and red tape, the good news is that any money you put towards these fees is a tax deduction.
Tip: Consider having separate bank accounts and credit cards for your handyman/odd-job income, expenses
*Related: TurboTax Student Discount
Self-Employment Taxes for Handyman Income
If you’re a self-employed handyman, you’ll need to pay a self-employment tax on your net profit. This tax includes Social Security and Medicare. To calculate how much you owe in taxes, com, complete, and attach Schedule SE, Self Employment Tax to Form 1040.
Conclusion
These are just some of the common tax deductions associated with handymen and with top names in tax software like TurboTax, H&R Block, and TaxAct you know you’re getting the guidance that allows you to complete your return in a way that gets you 100% of the refund you’re entitled to.
Speaking of that, be sure you keep track of every expense! Although you probably don’t think about it until tax season, keep receipts year-round to maximize your deductions. Even so, you’ll need some time to gather your receipts starting in January, so don’t procrastinate!