CPA for Construction Companies in Houston
Construction is one of the most accounting-complex industries in Texas, and Houston has one of the largest construction sectors in the country. Long-term contracts, percentage-of-completion accounting, retainage, change orders, multi-state projects, equipment-heavy depreciation, prevailing wage issues, bonding requirements — the list of specialty considerations is real. Whetzel & Co works with Houston construction companies, contractors, and tradesmen who need a CPA who understands the industry.
Who we serve
- General contractors — commercial and residential
- Specialty contractors — HVAC, electrical, plumbing, roofing, concrete, framing, drywall
- Custom home builders — spec and contract work
- Heavy civil contractors — site work, road work, utility installation
- Equipment-heavy operators — with significant fleet and equipment investment
- Construction equipment rental companies
Tax issues specific to construction
Long-term contract accounting
Construction contracts spanning more than one tax year are subject to special accounting rules. The percentage-of-completion method (PCM) is required for most large contractors, with completed-contract method available for smaller exempt contractors. The choice meaningfully affects when income is recognized and tax is paid. Lookback method calculations at contract completion can produce surprises if not modeled.
Section 179 and bonus depreciation on equipment
Heavy equipment, vehicles, and tools qualify for accelerated depreciation. For construction companies buying $200K-$2M in equipment annually, proper Section 179 and bonus depreciation timing is one of the largest tax levers available. Construction-specific items like specialized equipment and the vehicle weight rules under Section 280F deserve their own analysis — see our year-end tax planning guide for the timing mechanics.
Multi-state nexus and apportionment
Houston contractors regularly take projects in adjacent states — Louisiana, Oklahoma, Arkansas. Each project creates potential state tax filing obligations. The income sourcing rules for construction contracts are state-specific. Without careful tracking, you either overpay (filing in too many states) or underpay (creating audit exposure).
Prevailing wage and certified payroll
Government and prevailing wage projects require specific payroll documentation and reporting. Mistakes here trigger Department of Labor investigations and can disqualify you from future contracts. Coordination between accounting, payroll, and project management is essential.
Retainage and revenue recognition
Retainage held by general contractors or owners isn’t recognized as income until billable. Mishandling retainage on the books creates either income overstatement (tax paid on money not yet collected) or compliance issues (income deferred when it shouldn’t be).
Bonding and surety relationships
Bonded contractors need to maintain financial statements that satisfy surety underwriters — typically reviewed or audited financials. The accounting standards for surety presentation differ from tax reporting. We coordinate the two so your bonding line keeps growing.
Operational accounting for construction
Construction companies benefit from job-cost accounting that goes well beyond standard QuickBooks setup:
- Job-level profit tracking — revenue, costs, and margin per project
- Work-in-progress (WIP) reporting — required for surety and tax compliance
- Equipment cost allocation — charging equipment usage to jobs accurately
- Subcontractor tracking — W-9s, lien waivers, 1099 preparation
- Change order management — tracking executed vs pending change orders
Our bookkeeping and Virtual CFO services include construction-specific reporting for ongoing financial management.
Common Houston construction tax situations
- You’re a contractor on PCM with a problem job and need to understand the lookback implications
- You’re considering equipment purchases and want to time them for maximum tax benefit
- You took on a Louisiana project and aren’t sure about state tax obligations
- Your bonding company asked for reviewed financials and you don’t know what that means
- You’re considering S-corp election and want to know if the savings justify the complexity
- You’re planning to sell or transition the business and need to understand the tax structure
S-corp election for construction owners
Most successful construction businesses benefit from S-corp election once net income exceeds approximately $80,000. The FICA savings on distributions can run $5,000-$20,000+ annually for established contractors. We covered the breakeven math in our Schedule C to S-corp article.
What working with us looks like
Construction company engagements typically include:
- Monthly job-cost bookkeeping with WIP reporting
- Annual personal and business tax returns
- Quarterly tax planning meetings
- Payroll processing or coordination
- Annual reviewed financial statements for surety as needed
- Strategic advisory on bidding, equipment purchases, and ownership transitions
Total fees for a typical small contractor with bookkeeping: $8,000-$15,000 annually. Larger contractors with multi-state work, surety compliance needs, or 50+ employees are quoted individually.
Houston metro coverage
We serve construction companies throughout the Greater Houston area — Houston, Katy, Sugar Land, Richmond, Rosenberg, Pearland, The Woodlands, Spring, and Conroe.
Get started
If you run a Houston-area construction company and want a CPA who understands the industry, call (832) 594-0339 or use the contact page. Free 30-minute consultation to review your situation and discuss whether we’re a fit for your business.
Related services: corporate tax, bookkeeping, payroll, tax planning, fractional CFO.
Related industries we serve
We also serve specialty CPA needs in these Houston-area industries: