Tax Planning for Denver Contractors: What You Need to Know

Many construction business owners in Colorado operate at high revenue but low net profit - and taxes are often a major reason why.

Juggling in-between unpredictable income, misclassified workers, and overlooked deductions, a lot of contractors routinely overpay the IRS or face (very) avoidable penalties.

In Denver and across the state, smart tax planning is not optional - it’s the difference between working for your business or your tax bill.

One trend we often see (unfortunately) among many construction businesses is that they are leaving a lot of money on the table due to a poor financial foundation under their feet.

Surprised?

The Cost of Ignoring Tax Strategy in Construction

Construction businesses are uniquely prone to tax pitfalls.

This is already a very well-known fact.

Revenue often comes in waves based on project cycles, while expenses fluctuate constantly.

So if you don’t plan for that uneven cash flow, you’re most likely to:

Miss quarterly tax payments and rack up penalties.

Pay unnecessary self-employment taxes due to incorrect entity setup.

Lose out on industry-specific deductions and credits.

Misclassify workers (W-2 vs. 1099) and trigger audits or back taxes.

We had a particular Denver-based contractor who came to us after an unexpected $47,000 tax bill.

Guess what the problem was?

There was no quarterly planning, lots of miscategorized expenses, and no coordination between their bookkeeper and CPA.

This wasn't a case of incompetence - more like the absence of a proactive system.

Strategic Tax Planning: What It Really Looks Like

You see, what most people get wrong is that they think - tax planning is a once-a-year scramble.

In reality, if you are a 7-figure contractor, this should be a structured, proactive process that includes:

• Quarterly tax projections

Based on real-time income, expenses, and project load - not last year’s guesswork.

• Legal entity optimization

This ensures your business is structured to balance liability protection AND tax efficiency.

• Deduction strategy

Leveraging depreciation, vehicle and equipment write-offs, materials costs, and home office deductions (if applicable).

• Worker classification reviews (again, a very common mistake)

Regularly confirming that subcontractors are properly documented to avoid misclassification risks.

At Cutler & Co., we integrate tax strategy directly into your monthly bookkeeping and cash flow tracking - so you’re never caught off guard.

The C.A.S.H. Optimization Approach for Contractors

Our proprietary C.A.S.H. Optimization System™ ensures that your tax planning isn’t reactive - instead, it's built into your financial infrastructure.

That allows you to be in a much better position and have control over your financial forecasting.

How do we do that?

Configure

We evaluate your current structure, contracts, and reporting practices to catch costly gaps.

Automate

We connect systems like QuickBooks and project management tools to streamline expense categorization and tracking.

Strategize

We then make sure we perform quarterly reviews, tax forecasts, and recommend adjustments - in real time, not just year-end. Very big difference.

Harness

And lastly, we harness. We monitor your job costing, margins, and tax exposure every month so you’re always a step ahead.

This system turns compliance into a competitive advantage.

Your taxes become part of your financial strategy - not a year-end stressor.

That way, you have a solid foundation under your feet, which allows you to make predictable and justifiable decisions, pretty much guaranteed.

Use Case: How One Contractor Saved Over $60K

A general contractor in Jefferson County was operating as a sole proprietor and paid over $80K in taxes in 2022.

After restructuring as an S-Corp and implementing quarterly planning, we helped:

Shift a portion of income to distributions, reducing self-employment tax.

Identify over $120K in deductible vehicle, tool, and site expenses.

Set up a retirement plan that lowered their 2023 liability by another $18K.

The result?

Over $60K in tax savings and a system that scales with their growing crew and project load.

Don’t Let Taxes Undermine Your Profits

If you're a contractor in Denver or anywhere in Colorado, stop waiting until year-end to think about taxes.

It’s not just about what you owe - it’s about what you keep.

At Cutler & Co. we've been taking care of businesses for over 25+ years now.

We are currently serving over 500+ clients, and you can be one of them.

Let us install a proactive tax strategy aligned with your cash flow, project pipeline, and business goals.

Explore Our Tax Planning Services or Book a Strategy Call to start building tax efficiency into your business today.