Contractors & Specialty Trades
Tax & Accounting for Contractors and Specialty Trades
Why Pacific Northwest Contractors Trust Lewis Group CPAs
Running a contracting business in Washington or Oregon means juggling job costing, multi-state compliance, fluctuating material prices, and a workforce that’s part W-2, part 1099. The financial complexity is real — and the consequences of getting it wrong are expensive.
Consider this: According to the U.S. Bureau of Labor Statistics, the construction industry in Washington and Oregon employs over 280,000 workers, making it one of the region’s largest economic sectors. Yet the Construction Financial Management Association reports that nearly 1 in 4 contractors experience cash flow problems serious enough to delay projects, and financial mismanagement remains the leading cause of contractor failure.
Your Complete Contractor Accounting Team
Lewis Group CPAs has partnered with Atlas Accounting Group — our specialty trades division that works exclusively with contractors, HVAC, electrical, plumbing, and solar companies.
Atlas handles your operational accounting:
- Bill pay services and invoicing
- Software integration (ServiceTitan, Housecall Pro, JobTread, QuickBooks)
- Payroll processing and compliance
- Sales and excise tax filings
- Monthly management reports
- Year-end financials and tax-receipt management
Lewis Group CPAs provides your CPA-level strategy:
- Tax planning and preparation
- Entity structure optimization
- Multi-state tax compliance
- Virtual CFO and financial advisory
- Audit protection and IRS representation
- Retirement plan setup and management
It’s like having a full back-office accounting department plus a CPA firm — without hiring either in-house.
Complete Financial Support for Contractors & Specialty Trades
We offer practical accounting solutions tailored to the daily operations of Contractors & Specialty Trades and owner-operators.
Accounting Services
What does a Vancouver, WA tax accountant do for a small business?
Audit Protection
Mind Your Business and We'll Mind the IRS
Bookkeeping
Bookkeeping with extra oomph
Payroll Services
We Take the Pain out of Cutting Checks
Retirement Plans
Give your employees and your company a leg up
Startup and Formation
Dream big and we'll help you make it real
Tax Preparation
A Game-Changer for Your Business
Virtual CFO Services
The Expert Guidance of a Top Executive at a Fraction of the Cost.
The Hidden Financial Risks That Sink Contracting Businesses
The construction industry generates over $2 trillion in annual revenue in the U.S., yet contractor failure rates remain stubbornly high. It’s rarely the quality of the work that fails — it’s the financial management behind it.
The costly mistakes we see contractors make every year:
- Misclassifying workers as 1099 contractors — Washington’s L&I and the IRS both audit this aggressively. Penalties can reach 100% of unpaid employment taxes plus interest and fines.
- Failing to track job costs accurately — Without proper job costing, profitable projects subsidize money-losing ones, and owners don’t find out until year-end.
- Ignoring multi-state tax obligations — Contractors working across the WA/OR border trigger nexus in both states. Washington’s B&O tax and Oregon’s income tax create a compliance minefield.
- Underpaying estimated taxes — Cash flow swings in construction are dramatic. One strong quarter followed by a slow one leads to underpayment penalties if estimates aren’t adjusted.
- Missing retainage accounting requirements — Retainage creates timing differences between revenue recognition and cash collection that confuse both tax planning and cash flow forecasting.
- Poor change-order documentation — Undocumented change orders don’t just hurt profitability — they create audit exposure when revenue doesn’t match original contracts.
According to the Surety & Fidelity Association of America, financial mismanagement is the number one reason contractors fail to qualify for bonding — which locks them out of the most profitable commercial and government contracts.
Client Success Stories
Results That Speak for Themselves
Get a Plan That Works For YouI have trusted Lewis Group CPAs with my taxes for over a decade. They go far beyond basic tax preparation, by providing sound ADVICE. This is extremely valuable to my business and has saved me much more than I pay them for their service. Honest, straight forward and always available to answer my questions - this accounting firm is exceptional.
Contractor Tax Expertise That Saves Money and Prevents Audits
Lewis Group CPAs understands the unique financial challenges that contractors and specialty trades businesses face. Combined with Atlas Accounting Group’s day-to-day operational support, we deliver a level of industry expertise that general accounting firms simply cannot match.
Our specialized contractor expertise includes:
Job Costing and Profitability Analysis: Understanding profit by job — not just by quarter — is what separates thriving contractors from those running on thin margins. We work with your operational team to build job costing frameworks that give you real-time visibility into which projects make money and which ones don’t. This feeds directly into better bidding, better project selection, and better tax planning.
Worker Classification Compliance: The IRS and Washington’s Department of Labor & Industries are actively targeting worker misclassification in the trades. We audit your current workforce structure, ensure proper classification of W-2 employees vs. 1099 subcontractors, and set up documentation systems that protect you during audits. For companies needing ongoing payroll management, Atlas Accounting Group handles the day-to-day processing.
Multi-State Tax Strategy: If your crews cross the Columbia River, you’re dealing with two entirely different tax systems. Washington has no income tax but imposes B&O tax and sales tax on certain construction services. Oregon has no sales tax but levies income tax. We map your nexus exposure, structure your filings to avoid double taxation, and ensure compliance in both states.
Construction-Specific Tax Deductions: Contractors leave thousands on the table every year by missing deductions specific to the trades — Section 179 on equipment, vehicle depreciation, tool and supply deductions, home office for owner-operators, fuel and mileage, and the Qualified Business Income deduction. We review every eligible deduction and build a year-round tax strategy, not just a once-a-year filing.
Retainage and Revenue Recognition: Construction contracts with retainage clauses create complex accounting timing issues. We ensure your revenue recognition method (completed contract vs. percentage of completion) is optimized for your tax situation, and that retainage is properly tracked so you’re not paying tax on money you haven’t received.
Bonding and Financial Statement Preparation: Qualifying for surety bonds requires clean, professionally prepared financial statements. We prepare CPA-reviewed or audited financials that meet bonding company requirements, helping you compete for larger commercial and government contracts.
Frequently Asked Questions
Our contractor clients typically save $15,000–$60,000 annually through proper job costing, tax planning, and deduction optimization. Larger companies with multi-state operations or worker classification issues often save significantly more by avoiding penalties alone.
Lewis Group CPAs provides CPA-level services: tax planning, tax preparation, advisory, audit protection, and financial strategy. Atlas Accounting Group handles your day-to-day operations: bookkeeping, bill pay, invoicing, payroll, software integration, and monthly reporting. Together, they form a complete financial team for your contracting business.
We serve general contractors, HVAC companies, electricians, plumbers, solar installers, roofers, painters, landscapers, and other specialty trades businesses. Atlas Accounting Group has specific expertise in HVAC, electrical, plumbing, solar, and construction accounting.
We map your nexus exposure in both states, structure your filings to minimize double taxation, and ensure you’re compliant with Washington’s B&O tax, Oregon’s income tax, and any applicable local taxes. Our team handles multi-state returns and quarterly estimates.
Absolutely. We audit your current workforce structure, ensure every worker is properly classified per IRS and state guidelines, and set up documentation that protects you during audits. Misclassification penalties can reach 100% of unpaid taxes — this is one of the highest-risk areas for contractors.
Lewis Group CPAs integrates with all major accounting platforms. For specialty trades, Atlas Accounting Group has deep expertise in ServiceTitan, Housecall Pro, JobTread, QuickBooks, Gusto, and ADP — so your field management software talks directly to your accounting system.
Yes. We prepare CPA-reviewed and audited financial statements that meet surety bonding requirements. Clean financials and proper documentation are essential for qualifying for larger commercial and government contracts.
Key deductions include Section 179 on equipment and vehicles, tool and supply expenses, fuel and mileage, home office for owner-operators, the Qualified Business Income (QBI) deduction, and depreciation on rigs, trailers, and heavy equipment. We review every eligible deduction as part of your tax strategy.
Job costing tracks revenue, labor, materials, and overhead per project so you know exactly which jobs are profitable. For taxes, accurate job costing supports proper revenue recognition (percentage of completion vs. completed contract), ensures deductions are allocated correctly, and gives you data for better estimated tax payments throughout the year.
We specialize in contractors and specialty trades, understand Washington and Oregon tax law, and deliver measurable results. Plus, our partnership with Atlas Accounting Group means you get both CPA-level strategy and industry-specific operational accounting — without hiring multiple firms.