Tax checklist for your service business
© Guide — 2026Taxes are won all year, not in April. Track the right things as you go and tax season becomes a non-event — and you keep more of what you earned. This is the year-round checklist for service contractors.
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This is general information, not tax or legal advice. Tax rules change and depend on where you operate — confirm everything with a licensed CPA or accountant.
Choose the right business structure
Sole proprietor, LLC and S-corp are taxed very differently. Once your profit is consistent, an S-corp election can cut self-employment tax significantly — but it adds payroll requirements. This is the single decision worth paying a CPA to get right.
Track every expense all year
The contractors who overpay are the ones reconstructing a shoebox of receipts in April. Capture expenses as they happen, categorized — the goal is that tax time is just exporting a clean report.
Deductions contractors miss
- Vehicle — mileage or actual costs (fuel, repairs, insurance)
- Tools, equipment and their depreciation
- Materials and supplies
- Phone, internet and software subscriptions
- Home office, if you qualify
- Insurance premiums (liability, workers comp)
- Subcontractor payments
- Licenses, permits and continuing education
Pay quarterly estimated taxes
If you owe more than a small threshold, the IRS expects estimated payments four times a year, not one lump sum in April.
Set aside 25-30% as you get paid
Move roughly a quarter to a third of every payment into a separate tax account the day it lands. Missing quarterly payments triggers IRS underpayment penalties on top of the tax you already owe.
1099s and payroll
Pay a subcontractor $600 or more in a year and you generally must file a 1099-NEC. W-2 employees require payroll tax withholding and filings — getting this wrong is a common, expensive mistake.
Keep clean, separate records
- A business bank account separate from personal — never mix
- Every receipt saved digitally
- A mileage log
- Books reconciled monthly, not yearly
Hand your CPA a clean package
Olynx keeps income, expenses and receipts categorized all year with two-way QuickBooks sync, so at tax time your accountant gets a clean, CPA-ready package instead of a shoebox — less stress and a smaller bill.
Quote from numbers, not memory
Olynx runs the math on every quote for you — waste, loaded labor, overhead and markup — then turns it into a branded, e-signable proposal.
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