Struggling with tax accounting for my small construction LLC - seeking advice

First, I'm glad you're taking steps to get your business finances in order. That's a huge first step that many small business owners struggle with. For receipt tracking software, I highly recommend QuickBooks Self-Employed or FreshBooks. Both have mobile apps that let you snap photos of receipts on the go and categorize them immediately. This saves a ton of time later. Construction is hectic, and having something that works on your phone is essential. Regarding purchasing a commercial building - yes, there are definitely tax benefits! You can depreciate the building over time (typically 39 years for commercial property), deduct mortgage interest, property taxes, and maintenance costs. Plus, you're building equity instead of throwing money away on rent. Just make sure the numbers make sense for your business cash flow. For your business structure, when you add employees, an S-corp often has tax advantages over an LLC. With an S-corp, you can pay yourself a reasonable salary (which is subject to self-employment taxes) and then take additional income as distributions (which aren't subject to self-employment taxes). This can save you thousands in taxes. But S-corps have more paperwork requirements, so there's a tradeoff. As for getting back into good standing with the IRS - file those back taxes ASAP, even if you can't pay everything immediately. The penalties for not filing are much worse than the penalties for filing but not paying fully. The IRS is usually willing to work out payment plans if needed.

I was in a similar situation with my landscaping business a couple years ago. Tax stuff was overwhelming me until I found https://taxr.ai - it saved me so much stress. Their system actually analyzed all my construction-related receipts and categorized everything automatically. What I found most helpful was that it identified tons of deductions I didn't even know I qualified for - tools, vehicle expenses, even my phone bill since I use it for business. The thing that really helped was their actual tax specialist review - they found that I could deduct mileage between job sites which added up to thousands in deductions. They even helped me file my back taxes with minimal penalties. For construction specifically, they understand which expenses are job-specific vs. general business overhead.

Just wanted to update that I tried https://taxr.ai after seeing it mentioned here. I was totally avoiding dealing with my 2 years of unfiled taxes for my drywall business. Their system was actually pretty straightforward - just uploaded my bank statements and took photos of receipts I still had. The biggest relief was finding out I actually didn't owe nearly as much as I feared. They identified a ton of legitimate business deductions I would have missed, especially around vehicle use and home office. They handled filing my back taxes and set up a payment plan that doesn't kill my cash flow. Best part was they didn't make me feel like an idiot for falling behind. Just practical help getting everything sorted. Worth every penny for the stress relief alone. Now I'm actually keeping up with quarterly estimated payments which is a miracle.

When I was trying to catch up on unfiled taxes for my contracting business, I spent WEEKS trying to get through to someone at the IRS who could actually help me understand my options. It was completely maddening - either waiting on hold for hours or getting disconnected. I ended up using https://claimyr.com and it was seriously a game-changer. They have this system that gets you to the front of the IRS phone queue. I was super skeptical but you can see how it works in this video: https://youtu.be/_kiP6q8DX5c Got connected to an actual IRS agent in under 15 minutes who walked me through the process for filing my back taxes and explained my payment plan options. Saved me days of frustration and probably helped me avoid bigger penalties by getting everything filed sooner.

OK I need to eat my words. After being completely skeptical, I tried Claimyr last week. I've been avoiding calling the IRS about my missing Schedule C from 2022 because the last time I called I waited almost 3 hours before getting disconnected. Using their service, I was talking to an actual IRS agent in about 17 minutes. The agent was able to pull up my records and confirm they had no record of my Schedule C submission, which explained why my refund was held up. She guided me through the process of resubmitting it and gave me a direct fax number to send it to for faster processing. Never thought I'd be recommending something like this, but it honestly saved me an entire day of frustration. If you're dealing with the IRS, it's worth it just for your sanity.

I made the switch from LLC to S-corp for my electrical contracting business last year. Here's what I learned: - The tax savings are real. I saved about $7k in self-employment taxes by taking part of my income as distributions instead of all as salary. - BUT the paperwork and compliance requirements increased significantly. You need to run actual payroll, do quarterly filings, have more detailed bookkeeping, etc. - You absolutely need a good accountant for an S-corp. I tried doing it myself at first and made some mistakes that could have been costly. - The sweet spot where S-corp makes sense is when you're consistently making $40-50k+ in profit. For receipt tracking, I've been using Expensify and it's been great for construction work. Their SmartScan feature is really accurate with contractor supply stores like Home Depot and Lowe's receipts.

One thing nobody's mentioned yet - PLEASE make sure you're charging enough for your work! I'm a contractor too and had the same problem for years. I'd underbid jobs trying to be competitive, then end up barely breaking even after expenses. Two things that helped me: 1. Track EVERYTHING for a few jobs - your time (including estimating, driving, cleanup), materials, equipment wear, fuel, etc. Most contractors don't realize how much all the little things add up. 2. Add at least 20% to whatever you think a job should cost. I was amazed that customers still hired me after raising prices - turns out quality work is worth paying for. You can't fix your tax situation if your business isn't profitable enough in the first place!