Tax Deductions for Plumbers
Whether you work as a plumber for another company, or on your own, you have to report all of your income to the IRS. If you're an employee of another company, you'll receive a Form W-2, Wage and Tax Statement. If you work for yourself, or do odd plumbing jobs or run your own business, you'll be considered self-employed to the IRS. You may receive a Form 1099-MISC for those you service, however you still have to report income made even if you don't receive a 1099. Net income greater than $400 is subject to self-employment tax, and can be paid by filing a Schedule C. You may also be required to pay estimated taxes on the amount you report on your Schedule C.
You may claim deductions for job-related expenses provided they have not been reimbursed. This will lessen that amount of taxes you owe. In most cases, these deductions can be claimed as miscellaneous itemized deductions on a Schedule A. Ensure you have receipts to serve as proof of your expenses in case of an audit. Plumber related deductions include:
- Union dues or trade association fees
- Insurance costs for liability protection
- Fees for trade publications and journals
- Any equipment specialized to the trade and replaceable within a year
- Certain safety equipment like steel-toed shoes
- The cost of maintaining, purchasing, and cleaning uniforms, as long as they are required and not able to be worn as everyday attire.
- Any licensing charges, as long as it's not for initial certification
Job hunting expenses during a time of temporary unemployment may also be deductible as long as you continue to seek employment in plumbing. If you hold other odd jobs while unemployed it doesn't affect your plumbing job search.
Certain educational courses can also be deducted as long as they qualify. Refresher courses, courses on new industry developments, and vocational classes, are generally covered, however classes that qualify you for a new career or position are not deductible.
Plumbers who are self-employed can deduct additional expenses on a Schedule C:
- Bad business debts
- Car or truck expenses to drive from site to site
- Legal fees or accounting charges
- Rental costs for certain items, such as storage trailers
- Certain traveling expenses that meet the regular requirements for travel deduction
- Advertising costs
- Repairs and maintenance on equipment
- Necessary supplies
- Personal property or excise taxes
