Write It Off Right: Five Tax Tips for Project Managers

Running a successful architecture practice is more than just program diagrams and foundation details: the operational side of things is equally important when it comes to keeping the firm afloat and it takes both business sense and creativity to spur growth.

For project managers, accounting is paramount. It is important to keep close track of income and expenses, whether you are working at a huge firm or you run your own freelance practice. Close accounting will help you track expenses so that you lower your overall tax bill and keep more of the money you earn while staying out of trouble.

Technology firm BQE makes software to manage the business side of an A/C/E service firm. BillQuick streamlines and clarifies time and expense tracking and generating invoices, while Archioffice keeps track of people and projects. These programs make the lives of accountants, architects, attorneys, engineers, IT specialists, and business consultants much easier. Used in tandem with QuickBooks and the services of payroll companies (like ADP, Paychex), BQE software takes much of the stress out of tax season, not least by reducing the risk of leaving money on the table.

With April 15 fast approaching, it is never too early to think about what these deductions might be. Depending on your sector, you may qualify for building-specific tax breaks. The AIA has a list of resources that can help you pin down what you qualify for. BQE has also provided us with their list of tips and tricks for maximizing your tax refund.

NB: This article is a list of suggestions and subject to change. Please consult your tax advisor.

1. Professional Association Fees

If your employer requires you to join certain professional organizations, such as the Project Management Institute, you may be able to write off training materials, certification tests, and membership dues as business expenses — as long as your employer does not pay for them. Check your state’s tax code to see if you could get both a state and a federal tax deduction. If you work for yourself, you can also take a deduction for these fees and training costs when you complete Schedule C, the form that calculates how much money you brought in minus the expenses and deductions associated with your freelance business.

2. License Fees

You may be required to hold certain licenses, especially regarding regulated industries like defense, medical research, or health care. This can be deducted on your state and federal taxes, as long as you are not reimbursed by an employer. Freelancers can deduct these fees if your clients require special licenses.

3. Travel Mileage

Traveling to meet with clients can be costly. If a company does not provide that reimbursement, you can take a deduction when you file your taxes. The mileage reimbursement amount varies based on the cost of gas and other common automotive and travel expenses; the IRS website has the most up-to-date information.

4. Health Insurance

Freelancers who do not have health coverage from an employer or spouse can take a tax deduction for cost of health insurance. Health savings accounts (HSAs) offer further reductions if the health insurance you have is considered a high-deductible plan. Check with an insurance agent or HR department to make sure your plan qualifies.

5. Retirement Plans

If you work for a company, invest in their 401(k) program. All of the money you put in is tax-deductible, and your savings can be substantial. If you work freelance, you can open your own retirement plan, including an individual 401(k) with the same benefits as the corporate version, or SEP-IRA and Keogh plans for the self-employed.