For Engineers: Government Contracts, R&D Credits, and Contractor Crossover

Seattle-based engineers frequently straddle both public and private sectors. If you’re working on municipal infrastructure or federal projects (like highway upgrades or Sound Transit expansion), keep in mind that:

• Government contracts often come with unique billing requirements and delays, affecting cash flow and potentially bumping you into accrual accounting requirements depending on your structure.
• The R&D Tax Credit isn’t just for tech startups. Engineers developing or testing new structural methods, green building solutions, or energy efficiency systems could qualify—especially if you’re designing novel solutions for sustainability in construction.
• If you’re subcontracted by larger firms on state or city jobs, be mindful of sales tax obligations and business license requirements in multiple jurisdictions. Washington’s B&O tax applies to gross receipts, not net profit—so plan accordingly.

For Architects: Local Zoning Complexity, Project-Based Deductions, and Licensing

Seattle’s dense zoning regulations, historical overlay districts, and environmental codes make architecture here both challenging and ripe with opportunity. From a tax perspective:

• Travel, software, and continuing education costs are often deductible when they’re tied to project compliance or design technology (AutoCAD, Revit, etc.).
• Architects working across counties—King, Snohomish, Pierce—must manage local licensing and city-level tax requirements. Seattle’s own business license tax applies separately from the state’s B&O tax.
• If your firm is project-based, you may be able to time income and expenses more effectively using percentage-of-completion accounting, particularly when dealing with long-term contracts and retainers.

For Construction Professionals: 1099 Rules, Tools, and Job Site Tax Nuances

Construction businesses in Seattle face steep costs—labor, insurance, materials—and razor-thin margins. Whether you’re a solo contractor handling high-end remodels or running crews across commercial job sites, there are some essential tax realities to consider:

• Are you a 1099 contractor or do you employ others? Classification affects everything from your estimated tax payments to workers’ comp obligations. Misclassification can trigger audits.
• Tool and vehicle deductions are major. For those who use trucks or vans for hauling gear and supplies, the Section 179 deduction can allow immediate expensing of work-related vehicles and equipment, rather than depreciating them over several years.
• If you’re working on multiple residential sites (especially flips or renovations), be aware of Washington’s Use Tax if you purchase materials from out-of-state suppliers not collecting sales tax.

Special Considerations in Seattle’s Real Estate and Tech Boom

The tech industry’s expansion into real estate has created niche opportunities—smart buildings, high-efficiency campuses, and mixed-use developments. But that also means more scrutiny and more regulation.

• Professionals tied to real estate development may encounter passive activity loss rules, particularly if you’re investing in your own projects while working on others.
• Construction firms or engineers subcontracted by tech companies often need to adopt more rigorous accounting systems—especially if they invoice via procurement portals or are asked to comply with SOX (Sarbanes-Oxley) standards.

Final Thoughts: Planning Is Key

No matter your field, your tax burden is shaped not just by what you earn, but how and where you earn it. In Seattle’s fast-moving and highly regulated environment, working with a CPA who understands the unique intersections of tech, real estate, and construction is essential. The right planning can help you minimize B&O tax exposure, properly classify expenses, and make sure you’re staying compliant across jurisdictions.

Whether you’re blueprinting buildings, calculating load stress, or managing contractors on the job site, smart tax strategy can be just as critical as smart design.

Need help navigating your industry’s tax landscape? Huddleston Tax CPAs specializes in supporting engineering, architectural, and construction professionals across Seattle and the Pacific Northwest. Let’s build your financial foundation as strong as the structures you create.

Image generated by Sora.

The post Tax Deductions for Engineers, Architects & Construction Professionals appeared first on Huddleston Tax CPAs | Accounting Firm In Seattle.

Networking

It may be obvious, but one of the best ways to acquire a government contract is if you already know someone in the industry. Not only can this help you pitch your business, but people within the industry can give you insights into what they’re looking for in a contractor. It’s a way that you can tailor your services, messaging and interview to their special needs rather than a broad approach.

Research

The most judicious thing you can do is be knowledgeable about the type of construction contract the government is offering. Analyzing your company internally to understand your strengths and weaknesses is vital.

Having a detailed understanding of your company’s strengths means you’ll market yourself effectively, and understanding your weaknesses is paramount to mitigating risks. Construction business owners who approach a prospective project broadly rather than focusing on the specific job, typically lose the contract they’re going for.

Be on good terms with Small Business Association (SBA)

The SBA website has useful information, i.e. fundamental and technical information on contracting. Run through the reading to acquaint yourself with all the bidding procedures of acquiring as well as rules and regulations. SBA is the one tasked with the delivery of small business contracts which is why being in sync with them can help you land a contract. They’ll help small businesses within the range of $14 million to $35.5 million.

Be on the GSA schedule.

US General Service Administration links contractors to government buyers. By being on the GSA schedule, it means you are legible for conducting business with the government. To be on GSA, you must pay for past performance evaluation report available ratings. The information will evaluate your performance parallel to other businesses in the same industry. During the bidding processes, the report requires contractors to register and give out at least six clients’ names.

Subcontracting Chances

Some big construction companies subcontract small companies to carry out their construction activities. The SBA keeps a record of chief federal contractors who are constantly looking for subcontractors. The GSA publishes a comprehensive list to connect businesses with contractors and subcontractors. Subcontracting is a quick way to get noticed by the government and get more projects thrown your way.

The post How To Be A Valuable Subcontractor For The City appeared first on Huddleston Tax CPAs | Accounting Firm In Seattle.