Best Expense Categories for Contractors (Plumbers, Electricians & HVAC)

Knowing what's deductible is one of the better parts of running a trades business. Every gallon of gas on the way to a job site, every tool from Home Depot, every permit pull — a significant portion of what you spend in the course of doing the work qualifies as a business deduction. The challenge isn't usually finding expenses. It's having them organized the right way when tax time arrives.

The best expense categories for contractors map directly to the IRS Schedule C lines a self-employed plumber, electrician, HVAC tech, roofer, painter, or carpenter actually uses. Fourteen of them cover everything a trades business typically spends money on, and each one has a clear definition so you're always logging in the right place.

Job Materials & Supplies — Schedule C: Cost of Goods

The material that goes into the job itself. Pipe, fittings, wire, duct, shingles, paint, drywall, lumber, tile, grout, flooring — anything you buy specifically for a customer's project. Home Depot, Lowe's, Fastenal, Ferguson Plumbing Supply, and Graybar Electric all land here. This is typically the largest single category for most trades contractors.

Tools & Equipment — Schedule C: Line 13

Purchases of tools and equipment you own and use in the business. DeWalt, Milwaukee, Makita, Ridgid, Harbor Freight, Snap-on, Klein Tools. A new cordless drill kit, a pipe inspection camera, a multimeter — these are assets, not consumables, which is why they get their own line. Section 179 lets you deduct the full purchase price in the year you buy qualifying equipment rather than spreading it across years.

Equipment Rental — Schedule C: Line 20b

Renting gear you don't own. A scissor lift for a week, a tile saw for a day, scaffolding for a roof job, a compressor or dumpster. Sunbelt Rentals, United Rentals, and Home Depot Rental are common. This is separate from tool purchases — if you own the equipment, it belongs in Tools & Equipment. If you rented it and returned it, it's Equipment Rental.

Subcontractor Labor — Schedule C: Line 11

Payments to other tradespeople you bring in on a job — a drywall sub, a specialty electrician, a hired laborer. If you paid any individual or business $600 or more in a year, you'll also need to file a 1099-NEC. Track each subcontractor payment here with the recipient's name and the job it was for.

Vehicle & Mileage — Schedule C: Line 9

Every drive to a job site, supply run, permit office, or estimate is a deductible business mile. Gas, parking, and tolls all belong here too. For most contractors, Vehicle & Mileage is one of the top three deductions — and one of the most frequently under-tracked. If you're not logging every job site drive, you're leaving money on the table.

Expense & Mileage Ledger and Expense & Mileage Ledger + Reporting include a Mileage Log and Mileage Form so you can log every trip from your phone as you go. Job site addresses, purpose, and miles captured in the moment — not reconstructed from memory in April.

Licensing & Permits — Schedule C: Line 27a

Annual license renewals, state and trade certifications, bond payments, continuing education, and permit pulls for individual jobs. City permit offices, state licensing boards, NECA, the UA — anything that keeps you legally operating in your trade belongs here.

Insurance — Schedule C: Line 15

Business insurance premiums: general liability, workers' comp, inland marine, commercial auto, errors and omissions. Hiscox, Next Insurance, and Progressive Commercial are common carriers for trades contractors. Keep the monthly or annual premium receipts — this adds up quickly and is fully deductible.

Marketing & Advertising — Schedule C: Line 8

Anything you spend to bring in work. Angi, HomeAdvisor, Google Local Service Ads, Thumbtack, Yelp, Nextdoor ads. Also business cards, yard signs, door hangers, flyers. If you're running any paid promotion or paying for leads, it lands on Line 8.

Software & Subscriptions — Schedule C: Line 18

The digital tools you use to run the business side: Jobber, ServiceTitan, Housecall Pro for scheduling and invoicing; QuickBooks for bookkeeping; Google Workspace for email. Monthly and annual subscriptions all belong here.

Phone & Internet — Schedule C: Line 25

Your business phone line and internet service. Verizon, AT&T, T-Mobile, Comcast Business, Spectrum. If you use your personal phone for business, the business-use percentage of the bill is deductible. A dedicated business line is fully deductible.

Safety & PPE — Schedule C: Line 22

Protective gear you buy for work: safety glasses, gloves, work boots, hard hats, respirators, ear protection. These are supplies directly related to doing the work — not general equipment purchases. Home Depot, Amazon, and MSC Industrial are common sources.

Professional Services — Schedule C: Line 17

Fees paid to your CPA, accountant, bookkeeper, or attorney for services related to your business. Tax prep fees that relate to your business return also go here. Keep the invoice with the date and the service description.

Office & Admin — Schedule C: Line 18

The administrative overhead of running a business: receipt books, invoices, stamps, envelopes, printer ink, office supplies. Also small Amazon purchases that keep the business organized. The line is for consumable supplies used to run the business, not the tools used on the job.

Banking & Merchant Fees — Schedule C: Line 27a

Square, Stripe, PayPal Business, and bank fees on your business account. Processing fees from card transactions and any monthly bank charges are deductible. If you're accepting card payments from customers, those processing fees accumulate — track them every month.

Mileage is one of the largest deductions for contractors

Every trade contractor drives — to job sites, to suppliers, to pull permits, to give estimates. At the IRS standard mileage rate, a contractor who drives 15,000 business miles in a year claims a significant deduction just from the driving alone. The key is tracking every trip in the moment. A mileage log that lives on your phone and takes 30 seconds to fill out per trip is a far better record than trying to reconstruct job site addresses from calendar entries in March.

Expense & Mileage Ledger and Expense & Mileage Ledger + Reporting include a built-in Mileage Log and Mileage Form. Log trips from your phone while the drive is fresh — destination, business purpose, miles. The Mileage Log accumulates across the year and the deduction total is always current.

Categories already built for your trade

Expense Ledger comes set up with these 14 contractor categories from day one. No setup required, no manual category list to configure. The Expense Form presents all 14 in a dropdown. Log the amount, pick the category, attach a receipt photo if you have one. The Transactions tab accumulates every entry. The Tax Summary tab shows the year-to-date total for each Schedule C line — organized the way your accountant needs it.

On Premium, the Email Tax Report sends your Tax Summary, full transaction list, and mileage log to your accountant as formatted PDFs at the end of the year. No spreadsheet access required, no data export, just a clean handoff. Tab Export lets you save any individual tab to Drive as a PDF if you need to share a single view.

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