The bottom line here is to make sure you have access to the data and files the bookkeeper will be working with to ensure transparency. Under regular business accounting circumstances, revenue recognition is simple because they sell a product or service and collect a fixed price right away. They can choose between the cash method or the accrual accounting methods. However, the nature of construction companies makes how these businesses recognize revenue more complicated. Remote bookkeeping services, like firms, have multiple employees.

Stress-free finances are within your grasp!

It is important to accurately report your taxable income and any deductions and credits you are eligible for. It may also be helpful to consult with a tax professional to ensure that you are in compliance with all tax laws and regulations. Keeping track of all financial transactions, including payments received, expenses incurred, and any other financial transactions that impact your business is important. Having a clear picture of their financial figures will help any independent contractor understand their business better. They will be able to pay their taxes to the IRS with more accuracy.

Choose a method for Accounting

Independent contractors need to pay the IRS self-employment taxes. Currently, that means you will pay social security 15.3%-12.4% and Medicare 2.9%. The trade-off is that your employers do not put money towards your health insurance, workers’ compensation, bonuses, unemployment taxes, payroll taxes, or contribute to your 401(K). You will also forgo employee benefits like the Occupational Safety & Health Act (OSHA), the Fair Labor Standards Act (FLSA), and Title VII of the Civil Rights Act. You will get construction bookkeeping paid for the projects you work on, do taxes on your own, and work when you want to work.

Tax Estimations: Pay Now to Save!

There are lots of places online to find a quality freelance bookkeeper, but Upwork.com is a good place to start. Just look for a bookkeeper with high reviews from other customers like you. If you have a paperless office with digitized documents, you may find you’re comfortable hiring and working with a freelancer online. A local freelance bookkeeper should be able to visit your business in person in order to collect and organize your paperwork.

• Accounting is an essential part of running a successful construction business.
• This involves tracking incoming and outgoing cash and keeping an eye on your business bank account balance.
• An independent contractor can keep track of their earnings and outlays in a variety of ways.
• Paying taxes and having precise estimates of your upcoming tax obligations are quite beneficial.
• You’ve read through your local laws, and an employee or an independent contractor could fill the position.

• Being accountable for your books might help you save money while beginning your firm because cash flow can be limited in the early stages.
• It is important to keep receipts and invoices organized and easily accessible for reference.
• Speaking directly with their past or current clients can give you a clearer picture of what to expect.
• As an independent contractor, hiring a professional to handle your bookkeeping needs will give you the freedom you need to expand your company.

A good accountant can help you with tax season and also create and decipher financial reports like your balance sheet, income statement, statement of cash flow, and more. It gives you a more transparent look into where your business is right now and how it is trending. If you’re racing to get your books prepared for tax season and you feel generally behind on your taxes, you may want to hire a bookkeeper to handle that for you. If you don’t have your books clean and your financial records organized, you’ll have a harder time filing your taxes.

Different accounts will help you prove your records if your claims are in question. Keeping on top of the accounting and bookkeeping practices of your business is crucial to all independent contractors. As an independent contractor, the law classifies you as a business. As a business, you will need to pay taxes and keep up with your bookkeeping as well.