Plain-English guides to the Washington taxes that trip owners up

As a sole proprietor or single-member LLC, you pay self-employment tax on most of your profit. As an S corporation, you pay payroll tax only on the salary you take, but you add payroll costs and a separate return. This compares the two.

Washington treats most construction for a customer as a retail sale. Three questions decide what you owe:

• Whose property is it? Building or repairing on a customer's property is usually a retail sale. You collect sales tax on the full price, labor included, at the rate for the job site.
• Are you the prime or a sub? Subcontractors generally don't collect sales tax from the prime contractor, but they need the prime's reseller permit on file.
• Are you building to sell? Speculative builders don't charge sales tax on the sale. They pay sales or use tax on their materials and subcontracted labor instead.

Public road work and some government projects follow different rules. If you do a mix of these, the classification should be set up job by job.

Most Washington businesses pay B&O tax. Hauling freight for hire is different: it falls under the public utility tax, which has its own classifications and rates.

• Income from hauling for others is reported under the public utility tax, not B&O.
• Income from interstate hauling is generally deductible, so trip records matter.
• Other income, such as repairs or selling equipment, may still be B&O or retail sales.

Getting the classification right at setup avoids paying the wrong tax for years.

Residential rental buildings are normally depreciated over 27.5 years and commercial buildings over 39. A cost segregation study identifies parts of the property with shorter lives:

• 5- and 7-year property: appliances, carpet, some fixtures and cabinetry.
• 15-year property: land improvements like paving, fencing and landscaping.

Shorter lives, often combined with bonus depreciation, move deductions into the early years. Whether that helps depends on the property's cost, how long you'll hold it, and whether you can use the losses under the passive activity rules. Screen first, then decide.

• Monthly excise filers: WA excise return due the 25th of the following month.
• Quarterly excise filers and IFTA: due the last day of the month after each quarter (Apr 30, Jul 31, Oct 31, Jan 31).
• Estimated tax: Apr 15, Jun 15, Sep 15 and Jan 15.
• 1099-NEC and W-2: Jan 31.
• Partnership and S corp returns: Mar 15. This is also the S-election deadline for most calendar-year businesses.
• Individual and C corp returns, annual excise filers: Apr 15.
• Form 2290: Aug 31 for the July–June tax period.

Dates that fall on a weekend or holiday move to the next business day.