Bookkeeping guide
Skilled trades tax bookkeeping: categories to review
Electrical, plumbing, HVAC, carpentry, painting. If you got a 1099 for this work, here are common categories and review questions; your facts and records determine what qualifies.
Worth knowing
These are common expenses people in this line of work may need to review. Anything marked in orange is an edge case worth raising with a preparer rather than assuming.
Materials you bill to customers
Wire, pipe, fittings, fixtures, lumber, and paint that go into a customer's job are job costs even when you bill them back at a markup; this pack suggests the Schedule C Part III materials category for them. The full amount customers pay, materials included, is generally gross receipts whether or not you get a Form 1099-NEC or 1099-K. Match supply-house invoices to jobs, and keep tools that stay with you separate.
per job matched invoices
Truck stock at year-end
Parts and materials still on your van or in the shop at year-end may be inventory or unused materials rather than a current-year cost. PrivateBooks completes the cost of goods sold line only after you confirm that beginning and ending inventory were zero. If you carry truck stock, leave that unconfirmed until a preparer confirms whether it counts as inventory and completes Schedule C Part III.
at year-end count stock
Subcontractors & Form 1099-NEC
Paying another tradesperson or a helper who isn't your employee may be contract labor. If you pay a non-corporate contractor $600 or more during 2025 for work in your business, you generally must file Form 1099-NEC, so get a Form W-9 before the first payment. Card payments are generally reported by the card processor instead; cash, check, and direct bank transfers generally still belong on Form 1099-NEC. If you control how, when, and where someone works, they may be an employee who needs payroll; confirm worker status with your preparer.
$600+ paid in 2025
Mileage between job sites
Driving between job sites or to a supply house during the workday may be business mileage. Whether a trip from home is commuting depends on whether the site is temporary, whether you have a regular work location, and whether your home is your principal place of business; hauling tools does not by itself make commuting deductible. Keep a timely date, destination, purpose, and mileage log. If you qualify for and choose the standard rate, it generally replaces gas, repairs, and depreciation, but business parking and tolls can still be added. A truck already depreciated under Section 179 or bonus rules generally can't switch to it.
$0.70 / mile 2025 rate
Tools vs. big equipment
The business-use cost of hand tools, bits, blades, and consumables may generally be a current Schedule C expense. Bigger items, such as a drain machine, pipe threader, generator, or work trailer, may need to be depreciated or may qualify for an election like Section 179 or the de minimis safe harbor. Keep the receipt and the date you started using it, and confirm the treatment with your preparer before anything goes on Line 13.
at tax time big items
Licenses, permits, bonds & CE
State trade-license renewals, local business licenses, and permit fees you pay for jobs may generally be business expenses; this pack suggests the taxes and licenses category for them. Liability insurance and contractor or license bond premiums for the business may generally be ordinary and necessary expenses; record the actual premium. Continuing education that maintains or improves skills in your current trade may qualify as education; courses that meet a trade's minimum requirements or qualify you for a new trade generally do not.
keep receipts renewal dates
Deposits & progress payments
Under the cash method, a customer deposit or progress payment is generally income in the year you receive it, even if the job finishes the next year. Keep each deposit tied to its job and invoice. If you later refund a deposit, or you use an accrual method, the treatment can differ; confirm it with your preparer.
when received cash method
Common categories PrivateBooks suggests
Pick Skilled trades during guided setup and PrivateBooks shows these categories mapped to Schedule C lines for review — no chart of accounts to invent. The mapping does not establish eligibility, business-use share, or substantiation:
| Category | Schedule C line |
|---|---|
| Job materials (wire, pipe, fittings, paint) | Line 38 — Materials and supplies |
| Small tools, blades & safety gear | Line 22 — Supplies |
| Work van or truck (fuel, repairs, mileage) | Line 9 — Car and truck expenses |
| Tolls & job-site parking | Line 9 — Car and truck expenses (business parking and tolls) |
| Subcontractors (1099, not employees) | Line 11 — Contract labor |
| Equipment rental (lifts, trenchers, scaffolding) | Line 20a — Rent/lease (vehicles, equipment) |
| Trade licenses & job permits | Line 23 — Taxes and licenses |
| Liability insurance & contractor bonds | Line 15 — Insurance (other than health) |
| Lead fees (Angi, Thumbtack) | Line 10 — Commissions and fees |
| Advertising (yard signs, local ads) | Line 8 — Advertising |
| Card processing fees | Line 27b — Other (bank & merchant fees) |
| Field-service software (Jobber, Housecall Pro) | Line 27b — Other (software & subscriptions) |
| License CE & code courses | Line 27b — Other (education & training) |
| Phone bill (work %) | Line 27b — Other (phone & internet) |
Merchants it recognises automatically
On top of the 584 built-in sorting rules, this pack adds rules for 84 Lumber, Angi Leads, Fastenal, Ferguson Ent #, Ferguson Enterprises, Graybar, Herc Rentals, Homeadvisor, Housecall Pro, Johnstone Supply, Servicetitan, Sherwin William, Sherwin-William, Sunbelt Rentals, Supplyhouse.C, United Rentals. A matching description gets a suggested bookkeeping category; anything uncertain goes to Review instead of being guessed at. Spot-check every suggestion: a merchant match is not proof of business use, eligibility, allocation, or substantiation.
Do you even have to file?
Net earnings from self-employment of $400 or more generally require Schedule SE, but other filing rules can apply below $400. Whether you received a 1099, also have W-2 wages, had withholding, or need estimated payments depends on the full return. Review the official Schedule SE instructions or ask a qualified preparer instead of treating this bookkeeping guide as a filing decision.
See an optional cash-reserve illustration →
Educational pointers, not tax advice. Tax rules change and your situation is specific — worth asking about at tax time. The free IRS-sponsored VITA program helps people under its income threshold at no cost.