construction contractor expenses

Forum|Forum|1 year ago
March 24, 2025
1 reply
15 views

My husband is a small home improvement construction contractor. When he buys things like the bathroom vanity and bathtub etc, on behalf of the customers and installing them for the customers, can he claim for them? He invoices for them so they're part of the payment that he receives from the customers.

Not A Product Question

VolvoGirl

Level 15

Yes. Enter them under Supplies. He should report all the income including the reimbursements for parts etc. Then he can deduct them as expenses. Either as Supplies or Other Misc expenses.

avoAuthor

Level 3

Some of the customers have expensive taste, and want all expensive furnishings. So they all get included as income and then deducted as expenses? They can amount to thousands of dollars, not just for 1 project but multiple projects. He also does a markup on them as a contractor. I understand that whatever his profits are, will be taxed. But the numbers will be inflated because some of his projects have a lot of furnishings. Just want to make sure I'm doing the right thing here.

VolvoGirl

Level 15

Yes. You have to include them as income then you can enter them as expenses. The numbers won’t be inflated. The expenses will net out the invoice income. You will just be taxed on the profit and markup.