Contractors and building trades
Accounting for Chicago Contractors and Building Trades
Job costing, retainage, subcontractor 1099s
What this business files
Form numbers and dates. A deadline landing on a weekend moves to the following Monday.
- Form 1099-NECIssued to every subcontractor paid $600 or more in the yearJanuary 31
- Form 941 and IL-941Payroll tax and Illinois withholding on crew wagesQuarterly
- Certified payrollWage records for prevailing wage work, filed with the state portalMonthly, while a public job runs
- Form 1120-S or Schedule CThe business return for the companyMarch 15, or April 15 for a sole proprietor
Where owners lose money
We watch for these on every file in this trade.
- Retainage held by a general contractor is earned revenue you have not been paid, and leaving it out of the books hides both the profit and the receivable.
- A subcontractor without a signed W-9 on file is a 1099 you cannot issue and a deduction a examiner will question.
- Illinois treats a contractor as the end user of materials, so tax is paid on purchase rather than collected from the customer. Billing tax on top is a refund fight later.
- Deposits taken before work starts are not revenue yet, and treating them as revenue makes a slow quarter look profitable.
Services this trade uses
One fixed monthly fee, agreed before the first month. Catch-up on prior periods is quoted once.
Contractor or trade
Common questions
Do I charge sales tax on a remodel in Illinois?
A construction contractor is the end user of the materials, so you pay sales tax when you buy them and you do not add tax to the customer invoice. Retail sales of appliances or fixtures sold without installation are a different transaction and are taxed.
When does a worker have to be on payroll instead of a 1099?
Control decides it. A worker you schedule, supervise and equip is an employee, whatever the paperwork says. Illinois applies a strict test in construction specifically, and a reclassification carries back taxes for every quarter involved.
How do I know which jobs actually made money?
Job costing. Every hour, invoice and material receipt is coded to a job, and the monthly report shows gross margin per job rather than one company-wide number. Most contractors find one or two customers running at a loss inside the first quarter.
What do I need for bonding or a line of credit?
Two or three years of reconciled statements, a work-in-progress schedule and returns agreeing with the statements. We produce the set together, since a balance sheet without a work-in-progress schedule gets sent back.
Get your price this week
The first conversation is free. We read three months of statements, quote a flat figure and hold it. We reply the same working day.