FinTruction, 215 N MOORE Road APT 3024, Coppell, TX (2026)

10/26/2026

S-corp distributions skip F**A. Wages do not. The $280K distribution saved you about $11,150 in Social Security plus Medicare at the owner-employee level in 2026. The IRS position in audits since Watson v. United States (S.D. Iowa 2010, aff’d 8th Cir. 2012) is that wages must be reasonable compensation for services performed, not whatever leaves the biggest distribution.

Reasonable comp is a facts-and-circumstances test under nine factors: training and experience, duties, time, dividend history, payments to non-shareholder employees, timing of bonuses, what comparable businesses pay, compensation agreements, use of a formula. There is no safe harbor. “40-60% of profit” is CPA shorthand, not an IRS position. The IRS wins reclass arguments when wages are plainly below what a hired manager would earn.

The cost of losing: back F**A on the reclassified amount, interest, and often §6662 penalties. On $120K reclassified, with most above the wage base, that’s roughly $6,500 before interest.

THE FIX:
Document the reasonable comp analysis annually. Pull comparable data from BLS, salary.com, or RCReports and keep it in the file.

Target wages at what a hired construction operations manager would earn in your market, scaled by hours. For a solo owner-operator doing bids, PM, and field supervision, that often lands 140K-220K.

Hit the 2026 Social Security wage base ($184,500) with wages before taking large distributions. F**A savings above the base are the clean play; savings below it are the audit target.

Keep contemporaneous time records. If you spend 60% on management and 40% on field labor, blend the comp data.

Avoid the quarterly bonus trick (small weekly wage, huge Q4 bonus). The IRS pattern-matches it.

We do a free 48-hour audit of your construction books. We review what you’ve got, flag where you’re exposed, and send back what it’s actually costing you, within 48 hours.

Comment “CLEANUP” and we will DM you the details.

This content is for educational purposes only. Every business is different. Before making any changes to your books, reach out to us for guidance specific to your situation.

10/26/2026

Field hours get written down once. Then retyped. Then fixed. Then retyped again.

A foreman texts or writes hours in the field. Someone in the office collects it, reads it, and types it into QuickBooks by hand, split by employee, split by job, every week.

On a typical crew that's 45 minutes collecting timesheets, 75 minutes entering hours, 60 minutes fixing miscoded entries, and 30 minutes spot-checking before payroll. That's 3.5 hours a week on one task. Not building anything. Not bidding anything. Just retyping numbers that were already written down once.

And that's the clean week. The week handwriting is illegible or hours don't get split right, add another hour or two.

When field hours sync straight into your books, already split by job and ready for approval, most of that retyping disappears.

How much of your week is going into re-entering hours you already tracked once?

Book your free 48-hour audit from the link in bio.

10/22/2026

Both get you to full first-year expensing in 2026. The difference is what they do to the rest of your return. §179 is capped at $2.56M for the year and phases out dollar-for-dollar once your 2026 placed-in-service equipment crosses $4.09M. §168(k) bonus (100% under OBBBA §70301 for property acquired after January 19, 2025, per Notice 2026-11) has no cap and no phase-out, but applies automatically unless you elect out.

§179 is also limited to taxable business income. If 2026 net income before the deduction is $90K, your §179 is capped at $90K and the rest carries forward. §168(k) is not income-limited. It can push you into an NOL you carry forward, where it offsets up to 80% of a future year’s taxable income.

A $140K machine in isolation runs fine under either. §179 becomes a real question once you cross $2.56M in 2026 additions. §168(k) matters if you need to preserve current income for bonding or a bank covenant. The practical answer is often a split, elected at asset-class level.

THE FIX:
Pull your 2026 fixed asset additions year-to-date before deciding. Total above $2.56M forces §168(k) or a split election.

Run two tax projections side by side: §179 only, and §168(k) only. Compare federal and state (many states decouple from §168(k)).

Check your bonding or lender covenants before electing bonus. A deliberate NOL year can trip a minimum net income clause.

Elect out of §168(k) on Form 4562 if §179 better fits your situation. The election is annual and by asset class.

Confirm placed-in-service date. The IRS tests whether the asset is available for use, not just purchased. Sitting on a trailer awaiting assembly does not count; a December 30 delivery that cannot run until January 4 falls into the next tax year.

We do a free 48-hour audit of your construction books. We review what you’ve got, flag where you’re exposed, and send back what it’s actually costing you, within 48 hours.

Comment “CLEANUP” and we will DM you the details.

This content is for educational purposes only. Every business is different. Before making any changes to your books, reach out to us for guidance specific to your situation.

10/21/2026

A $47K skid steer is a fixed asset. Equipment Expense is for small tools and consumables under $2,500 that get written off the month you buy them. A skid steer sits on your books for five years, and the depreciation runs through Equipment Depreciation, not Equipment Expense.

The miscoding does three things at once. It drops your current-month profit by $47K when the real economic hit is maybe $780 of depreciation. It pulls $47K off your balance sheet, where your bonding agent and bank look at net worth. And it blows your job costing because the skid steer should be charged to jobs at an hourly burden rate rather than dumped on one month’s P&L.

If this goes to tax prep as-is, your CPA either catches it and books a §179 or §168(k) adjustment or does not, and you lose the structured deduction. Either way, your interim financials misrepresent the business for 11 months, & the misrepresentation surfaces at the worst moment: a mid-year bonding review or a GC asking for your balance sheet before awarding a $1.2M project.

THE FIX:
Set a written capitalization policy. Anything over $2,500 (de minimis safe harbor under Reg. §1.263(a)-1(f)) with a useful life over one year gets capitalized. Written procedures are required only at the $5,000 AFS tier; yours must exist before the year starts.

Reclass the $47K from Equipment Expense to Fixed Assets > Heavy Equipment. Book accumulated depreciation on a separate contra-asset account.

Choose §179 (up to $2.56M in 2026, phase-out at $4.09M) or §168(k) 100% bonus (automatic unless you opt out).

Build an equipment burden rate (price plus annual maintenance ÷ annual billable hours) & charge jobs through a monthly allocation entry.

Review every charge in Equipment Expense over $2,500 for the last 12 months. These miscodes compound.

We do a free 48-hour audit of your construction books. We review what you’ve got, flag where you’re exposed, & send back what it’s actually costing you, within 48 hours.

Comment “CLEANUP” & we will DM you the details.

This content is for educational purposes only. Every business is different. Before making any changes to your books, reach out to us for guidance specific to your

10/16/2026

Reasonable compensation is the W-2 wage an S-corp owner-operator must pay themselves for services performed, before distributions. The IRS reclassifies underpayment.

Why wages vs. distributions. Wages carry F**A: 6.2% Social Security plus 1.45% Medicare, employer and employee each. Distributions don’t. Owners minimize wages to cut payroll tax, and the IRS pushes back when wages look low for the work.

How “reasonable” gets determined. No single formula. IRS and tax courts look at nine factors: training/experience, duties, time devoted, comparable salaries, bonus timing, dividend history, payments to non-shareholder employees, formal agreements, use of a formula. IRS Fact Sheet 2008-25 is the working list.

The $420K case. Owner-operator running a construction business, performing GM-level duties full-time. Reasonable wage for a construction GM might be $140-180K. $45K is well below. If audited, the IRS would likely reclassify 100K+aswages,assessbackF**A(~15K), plus penalties and interest.

Documentation defense. Written compensation study at year-end using BLS or industry survey comps, board minutes, and an employment agreement specifying duties.

The 40-60% shorthand. Some CPAs target 40-60% of profit as wages. Informal practice, not an IRS safe harbor or Tax Court standard. The nine-factor test governs.

THE FIX:
Set W-2 wages based on comparable market data, not minimum tax.

Document a reasonable compensation study annually. Salary surveys and comps.

Formalize the compensation decision in board minutes or an employment agreement.

Treat the 40-60% rule as informal shorthand, not a safe harbor.

Review with CPA before year-end. Mid-year corrections cost less than audit assessments.

We do a free 48-hour audit of your construction books. We review what you’ve got, flag where you’re exposed, and send back what it’s actually costing you, within 48 hours.

Comment “CLEANUP” and we will DM you the details.

This content is for educational purposes only. Every business is different. Before making any changes to your books, reach out to us for guidance specific to your situation.

10/15/2026

Procore runs project management; QBO is the ledger. The connector moves specific data in specific directions.

Procore → QBO. Subcontractor invoices, prime contract owner invoices, Standard Cost Codes, companies as vendors.

QBO → Procore. Job cost transactions as Direct Costs. Vendor list syncs back for Procore commitments.

What never syncs. Budgets. Commitments (subcontracts and POs) and their change orders. Prime contract change orders. Timecards and timesheets. Project forecasts. All of it feeds Procore’s project reports and never hits QBO.

The committed-cost blind spot. QBO sees actual cost through subcontractor invoices and Direct Costs, but no commitments. A sub with $400K of commitment remaining and $100K billed leaves QBO understating job cost by $400K. Project financials have to run from Procore for anything forward-looking.

Three hard requirements in Procore’s docs. QBO Plus or Advanced only; Essentials has no Projects. Standard Cost Codes must be two tiers or deeper; single-tier blocks go-live. The integration does not write to the Class field, so if you run Classes by division, synced transactions arrive untagged.

The Direct Cost mechanic. Job costs entered in QBO come back to Procore as Direct Costs only if coded to the project-specific Service Items the integration created. Generic COGS stays invisible to Procore.

THE FIX:
Confirm QBO Plus or Advanced before implementation. Essentials blocks the sync.

Build Standard Cost Codes in Procore at two tiers minimum. Single tier blocks go-live.

Plan for the Class gap. The integration doesn’t write Classes; tag manually.

Code QBO job cost entries to integration Service Items. Generic COGS stays invisible.

Pull project financials from Procore. QBO doesn’t have budgets or forecasts.

We do a free 48-hour audit of your construction books. We review what you’ve got, flag where you’re exposed, and send back what it’s actually costing you, within 48 hours.

Comment “CLEANUP” and we will DM you the details.

This content is for educational purposes only. Every business is different. Before making any changes to your books, reach out to us for guidance specific to your situation.

10/15/2026

Classes give you a report that looks like job costing. It isn't.

You set up a class for every job, tag the transactions, run a P&L by class. Numbers broken out job by job. Feels like job costing.

But a class is just a tag. It sorts what already happened. It doesn't know what the job was supposed to cost, or what's still coming.

That's the whole difference. A class report looks backward. Job costing looks forward.

So there's no budget vs. actual. No committed costs, a $40,000 subcontract you've signed but haven't been billed for shows up nowhere. No WIP, no percent complete, no retainage.

Job's 60% done. The class report says "on track," because nobody compared it to the estimate. Three weeks later it's over budget and nobody saw it coming. The report never flagged it. It couldn't.

A class report tells you what a job cost. Job costing tells you what it's costing, while you can still do something about it.

Is your report catching overruns, or just sorting the numbers after the damage is done?

Book your free 48-hour audit from the link in bio.

If we miss the deadline, we work free for 30 days.

10/14/2026

Two methods, two tax outcomes.

Flat allowance. Fixed monthly amount, no substantiation required. Treated as wages: income tax and F**A on both sides, FUTA and SUTA on the employer. Simple to administer, but expensive on both ends. $600/month = $7,200/year of taxable comp, and the employee nets maybe $4,500 after federal, state, and payroll tax.

Mileage reimbursement (accountable plan). Employee logs business miles, employer pays at or below the IRS standard rate (72.5¢/mile Jan 1 2026, bumped to 76¢/mile effective July 1 2026 per Notice 2026-10). Must sit inside an accountable plan under IRC §62(c): business connection, substantiation within 60 days, excess returned within 120 days. Tax-free to employee, deductible to employer, no payroll tax either side.

FAVR (Fixed and Variable Rate). Hybrid for high-mileage drivers. Fixed covers ownership (insurance, depreciation, registration); variable covers operating (fuel, maintenance). Also an accountable plan. $61,700 max standard automobile cost for 2026.

The math. 4 PMs at 12,000 business miles/year each at 76¢ = $36,480/year in tax-free reimbursement vs. $28,800/year in taxable allowances.

Gas cards. A gas card plus a flat allowance plus a mileage reimbursement is triple-dipping. Pick one method.

THE FIX:
Pick one method per employee class. Document it in the handbook.

Prefer mileage under accountable plan. Tax-free beats taxable every time.

Require monthly mileage logs. Date, start/end odometer, business purpose.

Don’t stack a gas card on top of mileage. Mileage already covers fuel.

Review the IRS standard rate at January 1 and mid-year. 2026 moved twice.

We do a free 48-hour audit of your construction books. We review what you’ve got, flag where you’re exposed, and send back what it’s actually costing you, within 48 hours.

Comment “CLEANUP” and we will DM you the details.

This content is for educational purposes only. Every business is different. Before making any changes to your books, reach out to us for guidance specific to your situation.

10/12/2026

Davis-Bacon Act (40 USC §3141-3148) requires federally funded construction contractors to pay no less than the locally prevailing wage for each labor classification on the project.

Where to find the rate. SAM.gov publishes wage determinations by state, county, and construction type (building, residential, highway, heavy). The determination lists minimum base rate and fringe rate for every trade present on that project type in that county.

Base plus fringe. Base is cash wages paid to the worker. Fringe can be paid as cash on top of base or contributed to bona fide benefit plans (health, retirement, apprenticeship). Total compensation must meet or exceed base + fringe.

Certified payroll. Weekly WH-347 form submitted to the contracting agency. Lists every worker, hours, classification, rate paid, and fringe treatment. Falsification is a federal crime carrying real prison exposure.

Classification matters. A pipefitter paid at laborer rate on a federal job is a Davis-Bacon violation even if the worker agreed to it. The classification follows the actual work performed on site, not what’s on the job title.

The bid impact. On that VA job, journeyman pipefitters cost $95.40/hour total compensation vs. the contractor’s standard $42. If the bid used the $42 rate, every hour on site loses $53.40 of margin that never existed.

THE FIX:
Pull the wage determination from SAM.gov before bidding any federal job.

Price labor at base + fringe for every classification on the project.
Submit WH-347 certified payroll weekly. Agency will not release payment without it.

Classify workers by actual work performed, not by job title.

Audit sub payroll on federal jobs. Primes carry liability for sub violations.

We do a free 48-hour audit of your construction books. We review what you’ve got, flag where you’re exposed, and send back what it’s actually costing you, within 48 hours.

Comment “CLEANUP” and we will DM you the details.

This content is for educational purposes only. Every business is different. Before making any changes to your books, reach out to us for guidance specific to your situation.

10/11/2026

One QuickBooks setting decides whether your job costing works.

Most bookkeepers never touch it.

It's called "Track expenses and items by customer," under Account and Settings in the Expenses tab. On a lot of setups it's off by default.

Here's why that's dangerous.

With it off, every expense still saves fine. The bill pays, the transaction clears, the books look normal. But nothing ties that cost to a job.

Materials for the Johnson job. A sub invoice on the Miller job. All entered, none attached. They sit in the general ledger and never make it into a job cost report.

So the report still runs. It's just incomplete. Some jobs show fatter margins than they really have, because their real costs never got tagged. Then your next bid gets built off those numbers.

The job costing report exists. It's just not telling the truth.

When did anyone last check whether your costs are actually tagged to jobs?

Book your free 48-hour audit from the link in bio.

If we miss the deadline, we work free for 30 days.

FinTruction

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