Tax Tips: Use the Right Construction Codes - 4/4/2005 - Insurance Lawyers Taxes

Tax Tips: Use the Right Construction Codes
 

Many NAHB members own more than one construction-related enterprise.

When completing your tax return, it is important to properly classify the business that provided your principal source of income. These codes for the Principal Business or Professional Activity classify sole proprietorships by the type of activity they are engaged in to facilitate the administration of the Internal Revenue Code.

These six-digit codes are based on the North American Industry Classification System (NAICS).

• Line A of Form 1040 Schedules C and C-EZ requires a Principal Business or Professional Activity description to be entered. Select the category (from the six-digit codes) that best describes your primary business activity within the construction industry.
  
  If you owned more than one business, you must complete a separate Schedule C or Schedule C-EZ for each business.

• Line B of Form 1040 Schedules C and C-EZ also requires a Principal Business or Professional Activity description to be entered. However, this code should represent the activity that best identifies the principal source of your sales or receipts (i.e. your principal customers or clients).

For a complete listing of the NAICS six-digit codes and IRS instructions for Schedule C, click here. (This link is for NAHB members only.)