Expense Categories Explained

JobsPaid uses standard expense categories to organize your spending and make tax time easier. Here is what each category means and when to use it.

Materials

Raw materials and supplies purchased specifically for a job. Examples: lumber, pipe, wire, paint, concrete, hardware, fixtures. These are direct job costs.

Tools & Equipment

Tools you purchase for your business. Examples: power tools, hand tools, ladders, test equipment. Small tools (under ~$2,500) are usually deducted in the year purchased. Large equipment may need to be depreciated.

Vehicle

Gas, oil changes, tires, insurance, registration for your work vehicle. Keep mileage records too — the standard IRS mileage rate ($0.70/mile for 2025) is often a larger deduction than actual vehicle expenses.

Subcontractors

Payments to other tradespeople, helpers, or subcontractors you hired for a job. These need 1099-NEC forms if you pay a single subcontractor more than $600 in a year.

Insurance

Liability insurance, workers compensation, surety bonds, and any other business insurance premiums.

Marketing

Business cards, flyers, website hosting, online ads, uniforms with your business name.

Office & Admin

Accounting software, phone bill (business portion), office supplies, professional memberships.

Other

Anything that does not fit the above categories. Keep notes so your CPA understands what it was.

Why Categories Matter

Properly categorized expenses make it easy to see where your money goes and ensure you claim every legitimate tax deduction. Your CPA will thank you.