FHB Logo Facebook LinkedIn Email Pinterest Twitter X Instagram Tiktok YouTube Plus Icon Close Icon Navigation Search Icon Navigation Search Icon Arrow Down Icon Video Guide Icon Article Guide Icon Modal Close Icon Guide Search Icon Skip to content
Subscribe
Log In
  • How-To
  • Design
  • Tools & Materials
  • Restoration
  • Videos
  • Blogs
  • Forum
  • Magazine
  • Members
  • FHB House
  • Podcast
Log In

Discussion Forum

Discussion Forum

Client asking for receipts

ottcarpentry | Posted in Business on March 31, 2009 05:28am

How have you had a client ask you for copies of the receipts of materials you purchased for a job in addition to an invoice for tax purposes? If so, how have you handled it?

I have a clent of a job I’ve completed that stopped by today and asked if he could have copies of all the receipts for the job. It was a fire rebuild, and he said his tax man told him to get as many receipts as possible.

My experience is that the invoice I provide with labor and materials (materials not itemized) listed independently is adequate for tax purposes. I don’t mark up materials, I keep all the receipts, and usually wind up not charging enough anyway.

I’m curious what your thoughts on the subject are or how you’ve handled a similar situation.

Thanks,

Ott

Reply
  • X
  • facebook
  • linkedin
  • pinterest
  • email
  • add to favorites Log in or Sign up to save your favorite articles

Replies

  1. User avater
    mmoogie | Mar 31, 2009 05:33am | #1

    Your invoice to them is their receipt. What you billed them is what it cost them.

    Steve

  2. mike_maines | Mar 31, 2009 05:34am | #2

    We occasionally provide reciepts, but we work exclusively T+M.  Are you working on a fixed price?  Never heard of providing receipts for that.  Your invoice should be receipt enough.

  3. user-51823 | Mar 31, 2009 05:42am | #3

    Isn't there a standard acceptable markup on materials? I'm not a pro, just a DIY homeowner. While I don't like being overcharged for supplies, I certainly understand and accept that there will often be a percentage of the cost to my contractor added on.

    1. mike_maines | Mar 31, 2009 05:46am | #5

       

      Isn't there a standard acceptable markup on materials?

      Nope.

       

  4. sisyphus | Mar 31, 2009 05:44am | #4

    My receipts usually cover everything. 

    If you are not marking up material costs the client could give you cash in exchange for the receipts. 

  5. DonK | Mar 31, 2009 05:54am | #6

    I think your receipt is good enough, particularly since it's itemized and detailed.

    (FWIW - I've dealt with this as an attorney for about 20 years before I converted to construction. If the IRS wants more, let them ask for it. )

    Don K.

    EJG Homes    Renovations - New construction - Rentals

    1. User avater
      jonblakemore | Mar 31, 2009 06:04am | #7

      Don,We've been doing more replacement windows now that the tax credits have increased so much (30% credit on windows & doors up to $1,500 total credit) but the receipt thing has got me wondering.Energy Star says the credit is only available on material- no installation. I'm wondering how to handle this.Do I give them copies of actual receipts for the windows? I would rather not do this if possible. If I were to give them a statement of how much the materials were, would I include ancillary items (Vycor isn't a window but we won't install one without it so I could see that being included) and would I mark up the materials?Maybe I need to talk to my accountant. 

      Jon Blakemore RappahannockINC.com Fredericksburg, VA

      1. DonK | Mar 31, 2009 06:28am | #8

        Hi Jon-

        My point of view would be that your receipt qualifies as the "receipt". And, for what it's worth, I don't believe that the IRS requires that you file receipts with the tax returns. More often than not, it's a tax guy that's looking to cover their butt.

        As far as the scope of the "materials", I think a good argument can be made that  "materials" includes all of the necessary materials to do the job. They wouldn't question the screws that hold the window in. They wouldn't question the caulking that keeps it from leaking. Why would they question the Vycor? It's a necessary part of the window installation. You're not charging them for new venetian blinds.

        I would do a generic description of the materials used and include it as a footnote [OK, some habits die hard... :-)] Something like,  "Installation which is tailored to the specific site requires the use of multiple materials including but not limited to hardware (screws and nails), framing materials, waterproofing materials and other incidental items, all of which are included herein." My bet - (Most of) the folks at the IRS can't be bothered looking foir more than that.

        As far as talking to the accountant, by all means. Go for it. Remember tho', he's gonna wanna cover his #ss too.

        Don K.

        EJG Homes    Renovations - New Construction -  Rentals

        1. User avater
          BillHartmann | Mar 31, 2009 07:21am | #9

          "I don't believe that the IRS requires that you file receipts with the tax returns."I have never done any returns with the energy credits.But I have done ones with capital gains and losses, rental properties, depreciation, business income and expense, auto expenses, and installment sales income. And one rental that was completely destroyed in a fire and rebuilt.In none of those cases where anything filed with the returns. The only time I have ever seen the requirement for anything to be filed with the returns are W-2, 1099's, etc that show withholding.Of course you do need the documentation if you any of these are every audited..
          William the Geezer, the sequel to Billy the Kid - Shoe

      2. User avater
        aimless | Mar 31, 2009 10:03am | #16

        In order to file for my various rebates and credits when we replaced windows I needed to know the materials cost separated from the labor.  I had the windows installed by the same people who supplied them, and they gave me a receipt breaking it down - I knew the cost of each window, the cost of miscellaneous materials such as Vycor, and the total cost of the labor. 

        Since our locality collected sales tax on materials but not labor, this type of receipt is pretty standard around here.

        Edited to add: these are the costs to me, it is immaterial what the costs to the supplier/installer were.

        Edited 3/31/2009 3:06 am by aimless

      3. unTreatedwood | Mar 31, 2009 08:07pm | #25

        credit is ONLY on the COST of windows.  That kind of cuts out the contractor's potential for mark up.  But then again, that's par for the course right now it would seem.  I'm sure a new arrangement with vendors will appear and/ or you will have to work out a higher labor cost, maybe.  Remains to be seen.
        At its most basic level, capitalism offers people the freedom to choose where they work and what they do … the dignity that comes with profiting from their talent and hard work. … The free-market system also provides the incentives that lead to prosperity -- the incentive to work, to innovate, to save and invest wisely, and to create jobs for others.” -President George W. Bush

        In other words, free-market capitalism is the best path to prosperity.

        1. User avater
          BillHartmann | Mar 31, 2009 08:37pm | #27

          Cost to WHO?Maybe it is the cost of the glass units and the PVC extrusions the window manufacture buys.Maybe it is the cost of the silicon used to make the glass and the bulk PVC used to make the extrusions.Say some one buys windows directly from HD and hires some one else to install them. Is it what he pays HD or is it what HD pays the manufacture.And what difference is that than say a contractor buys from a manfacturer and sells them at a marketup. Maybe even less than HD's markup. .
          William the Geezer, the sequel to Billy the Kid - Shoe

          1. unTreatedwood | Apr 01, 2009 07:45pm | #42

            cost to WHOM.....sorry, I'm very obsessive about that.

            Here is the source of my comment: (Northern NJ lumber yard(s))  PLS NOTE LAST BULLET POINT!!

            ++++++++++++++++++++++++++++++++++++

            $1500 Energy Tax Credit

            Kuiken Brothers Company offers you a wide range of windows and doors that help increase a home’s comfort and energy efficiency. And, if you buy them now, you may qualify for a credit of 30% of the product cost up to $1,500 on your federal income tax.

            To be eligible, windows, doors and skylights must have both a U-Factor equal to or less than 0.30 and a Solar Heat Gain Coefficient (SHGC) equal to or less than 0.30.

            Not all products in the project are required to meet a 0.30 U-value and 0.30 SHGC. Therefore, $5,000 of product that does qualify can be used with product that does not, yet the homeowner receives the maximum rebate.

            Purchase and install qualifying products beginning January 1, 2009 through December 31, 2010 and meet all other requirements outlined in the federal tax code.

            Save your sales receipt and each window or door performance label (NFRC/ENERGY STAR¯ label) with your tax documents.

            Claim the tax credit associated with your qualifying purchase on your Federal filing for the 2009 and/or 2010 tax year.

            Tax credit is for the cost of the product only and does not include installation costs. Be sure to ask for a sales receipt that shows the cost of the product only.
            At its most basic level, capitalism offers people the freedom to choose where they work and what they do … the dignity that comes with profiting from their talent and hard work. … The free-market system also provides the incentives that lead to prosperity -- the incentive to work, to innovate, to save and invest wisely, and to create jobs for others.” -President George W. Bush

            In other words, free-market capitalism is the best path to prosperity.

          2. LIVEONSAWDUST | Apr 02, 2009 02:57am | #44

            Yes, but the cost of the window to who? The manufacturer sells it to the distributor, who marks it up and sells it to me, I mark it up and sell it to my customer.

            I see no reason why I'm not entitled to my mark-up as well.

            So if asked, I would give the customer one invoice for the windows, which would include my markup, and a separate invoice for the install.

            That windows cost to me, plus my mark-up IS the customers cost for the window.

          3. renosteinke | Apr 02, 2009 05:25am | #45

            You do raise a validpoint; in that instance, I am sure the supplier would be happy to provide you with the 'reccomended retail price.'

            Yet, nothing is simple in this world. While I understand the logic behind marking up your materials, I caution all to be sure that they comply with their State's sales tax rules;    it is very possible that you will be expected to collect, and remit to the State, sales tax on that mark up.

          4. unTreatedwood | Apr 02, 2009 04:16pm | #46

            I don't disagree. We are all in business to make a living. you are providing a service for your client so they don't have to run around to find windows. I dont have a problem with markup. However, the government doesnt currently understand that we make a living by working. They seem to think everyone is owed "stuff" for free. so how the states and the Feds, (this is federal law) interpret this is far more important than how you and I interpret this. As for me, I would have no issue with the markup being the client's cost....that IS their cost, as you say.
            At its most basic level, capitalism offers people the freedom to choose where they work and what they do … the dignity that comes with profiting from their talent and hard work. … The free-market system also provides the incentives that lead to prosperity -- the incentive to work, to innovate, to save and invest wisely, and to create jobs for others.” -President George W. Bush

            In other words, free-market capitalism is the best path to prosperity.

        2. User avater
          jonblakemore | Mar 31, 2009 10:24pm | #28

          Bill already made my point, but as always, I feel like I have something to add.If I markup our material, no customer is getting a window or any other product unless they pay that markup. I would think that, in this case, we are the window seller. I wonder if one could get away with offering free installation? It may not pass the smell test, but I haven't seen anything that indicates there are rules that have to be adhered to.I've searched the Energy Star site but cannot find anything that really gets to nuts and bolts.http://www.energystar.gov/index.cfm?c=products.pr_tax_credits 

          Jon Blakemore RappahannockINC.com Fredericksburg, VA

          1. User avater
            BillHartmann | Mar 31, 2009 11:04pm | #29

            IRS, not Energy Star would be the defining word on this.And I found this.http://www.irs.gov/pub/irs-drop/n-06-26.pdf".06 Installation Costs. With respect to Eligible Building Envelope Components, the credit is allowed only for amounts paid or incurred to purchase the components. The credit is not allowed for amounts paid or incurred for the onsite preparation, assembly, or original installation of the components."This is for the old program..
            William the Geezer, the sequel to Billy the Kid - Shoe

          2. User avater
            jonblakemore | Mar 31, 2009 11:46pm | #31

            Thanks.As I read it (all 15 pages worth), the "amounts paid" would be from the taxpayers perspective, not the contractor. I would interpret that a reasonable markup shown on the invoice the contractor gives to the home owner would be fine.I know you have more tax experience than I have. Would you agree? 

            Jon Blakemore RappahannockINC.com Fredericksburg, VA

    2. User avater
      ottcarpentry | Apr 04, 2009 04:41pm | #47

      I just got some more information that may or may not shed some light on things. The Client says that because he is a minister his taxes are handled like military personel. Everything is tax exempt. The only thing I can figure is that he is trying to get the taxes back on the materials purchased. He says the accountant is preping for an audit, because the fire rebuild involved insurance money and they remodeled at the same time. I guess they spent about $400k during the whole process.I'm concerned that by providing the receipts now I'm opening myself up to the audit as well, and if there is something shady, providing the receipts looks like I'm trying to justify my invoices. I DID NOT itemize the invoices because nearly every purchase was discussed w/ the homeowner. The receipts for the job have multiple payment systems, my business cc, my personal cc, my wife's cc, cash etc. and my personal purchases are intermixed as well. I kept careful track of all the reciepts as I went and logged the purchases by simply keeping a list of job materials purchases. No receipt refferal, just a list of prices.After this fiasco, I'm going back to materials upfront and everything comes out of my business account again. I only made this mess of this job because of all the delays and garbage that was pulled required me to be creative this time.Any ideas if the receipts really are required or can actually be used because of the tax exemption, or if I am letting my self in for it by providing them, or even the reverse by not providing them. I am going to consult my tax guy, I just wondered if you ever encountered anything like this?Thanks,Ott

      1. JohnCujie | Apr 04, 2009 05:09pm | #48

        I don't believe he can deduct the taxes unless you are a reseller, that is you do not pay tax on materials but collect from him. Otherwise you are claiming the taxes as an expense and he is claiming them as a deduction. Sort of double dipping from the government.At least that is how it was explained to me at one time on a job I did.Not a tax man and have never stayed at a Holiday Inn Express,John

      2. renosteinke | Apr 04, 2009 06:45pm | #49

        Tell the preacher: too little, too late.

        As a contractor, you have to pay sales tax. On the plus side, you don't 'sell' the materials, and thus do not have to collect the sales tax. Materials are considered 'raw materials' for your finished product - to which sales tax does not apply.

        Now, if he wants to go out, buy the materials himself, and pay full retail .... then he can use HIS tax certificate to avoid paying the sales tax at that point.

        The point is - by paying you for materials, he never paid any sales tax - because you never charged him sales tax.

        Heck, he doesn't pay income tax, either. Does he want a copy of your 1040, so he can ask the IRS for the taxes you paid them?

        1. Piffin | Apr 04, 2009 11:35pm | #50

          That is right. If he is dealing with this on a sales tax basis, he has to file with each retailer to set up an account ahead of time to not be charged the sales tax. Getting it back again is a waste of time for the retailer paperwork wise.But I have more of a question on this now - That sales tax exemption is for the church itself, not for the private use of the minister on his own home. Claiming it there would be illegal and immoral. 

           

          Welcome to the Taunton University of Knowledge FHB Campus at Breaktime. where ... Excellence is its own reward!

      3. DonK | Apr 06, 2009 05:37am | #51

        Sorry, but I've no personal experience in that situation.

        My logic though leads me back to the same place. The IRS, if they audit, will base it on the paperwork that the client provides. He will give them your bill(s) and copies of the check(s), and that should be it.

        If he is claiming that his income is tax exempt, he shouldn't need deductions to match against his salary. (I'm not getting into Piffen's position. That's another issue.)

        But, he would probably be taxed on the income from the insurance company. Then it's another question about how the money was spent. He has your bills. I think that should be enough.

        I would not give him more stuff unless he really needs it (Like when the audit letter comes.) and I would not keep jumping through hoops and wasting time for free. Enough is enough. I'll bet the CPA is charging him by the hour. You do the same.   

        1. User avater
          ottcarpentry | Apr 06, 2009 06:38am | #52

          I agree, the only other thing he mentioned is that his accountant was preparing for a possible audit and thought the IRS might be looking for possible kick backs.The whole thing sounds fishy to me and I wonder if they just want the receipts for personal reasons and want to make sure I didn't over charge them. The ironic thing is that I'm probably the only one who shopped for the best price for them and didn't markup materials, and I charged them $600 less than I figured to make sure some of the router bits and lumber I kept or used were covered.There's just no pleasing some people. ;-)Ott

          1. davem | Apr 06, 2009 03:43pm | #53

            ministers do not have to report as income the portion of his pay that is designated parsonage expense and is actually used to provide a home. However, they get the same deductions as anyone else. So, he could get a $1,000.00 per month designation, pay a $1,000.00 per month interest only mortgage payment, with the result being $1,000 per month in tax free income AND $1000 per month in home mortgage deductions.I don't follow taxes as much as I did in the past, but aren't there some new laws on sales tax deductions?

          2. User avater
            ottcarpentry | Apr 06, 2009 04:03pm | #54

            Maybe that little trick right there is what the issue is. But, do you have to pay income on insurance payout? Or, is it a matter of deductions because the costs related to the house? I've never enountered the situation so I have no idea. I still don't see how my receipts would help in any way. The invoices should be plenty. The only thing I can see based off of what he said about kickbacks, is that because I didn't itemize the materials portion of my invoice, the accountant thinks there's reason for the IRS to think something shady could have happened with that portion of the payments. I don't see how myself. On a $400k project my $10k worth of materials charges seem pretty insignificant.Ott

          3. Piffin | Apr 06, 2009 04:20pm | #55

            "But, do you have to pay income on insurance payout? "Possibly depends how the accountant is handling it all.
            Theoretically the ins payout is a re-imbursing for repairs, so is s net zero item
            And if he gets a 400K ins payout and only dopes 100K of repairs, then theoretically, the house is worth 300K less due to "unrepaired" items and it all balances out.But banks with the paper and insurance carriers might have a different view than the accountant or the IRSIt could be something is fishy here but it is just as likely that with so many stages of communication from acct to HO to you, tho all of us here, there is some misunderstanding and errors in communication going on.My bottom line on this is still the same - he deserves copies of receipts for what he paid directly, but where it was paid through you and you already billed, you don't need to verify with yet another receipt, except if there is a good "customer relations" reason for you to do so. I don't think I have ever had to actually SHOW a receipt for items I paid and rebilled/resold to a customer 

             

            Welcome to the Taunton University of Knowledge FHB Campus at Breaktime. where ... Excellence is its own reward!

  6. brucet9 | Mar 31, 2009 07:37am | #10

    "...he said his tax man told him to get as many receipts as possible."

    ...That way he can deduct the materials twice; once from the total on your invoice and again from all the individual receipts. Your invoice is all he needs to file an honest tax return.

    Of course, if business is slow, you could offer to bill him at your hourly rate for finding and making copies of all those receipts. Maybe, if he wants even more deductions, you could throw in some from other jobs from about the same time; perhaps even charge him by the dollar amount.

    BruceT
    1. davidmeiland | Mar 31, 2009 07:42am | #11

      You nailed it.

    2. User avater
      ottcarpentry | Mar 31, 2009 08:49am | #14

      I figured the same thing, that the client would try to deduct the materials twice if they could. They have already taken the insurance money and claimed the salvage rights for the damaged items the insurance paid for. They cleaned up everything possible kept it and used the money for improvements, etc.I think they're trying to squeeze some more out of the tax side as well.Ott

      1. brucet9 | Apr 01, 2009 05:59am | #34

        Give 'em Obama's Blackberry address so they can ask for some bailout money too.
        BruceT

        Edited 3/31/2009 11:08 pm by brucet9

  7. User avater
    ToolFreakBlue | Mar 31, 2009 07:44am | #12

    Your invoice is his receipt.

    The receipts you have for the materials you purchased are needed by YOU so that you can deduct those job costs from YOUR income.

    TFB (Bill)
    1. User avater
      ottcarpentry | Mar 31, 2009 08:43am | #13

      Thank you for your responses. I had come to the same conclusions, that the invoices were all that the client would need, but wanted to check if others agreed.

  8. peteshlagor | Mar 31, 2009 09:10am | #15

    "It was a fire rebuild"

    Despite all of the negative POV's presented, I feel the CPA is simply out to establish a Casuality Loss that goes on Sch A.

    Your completed receipt (that matches his payments made to you) for your services, not itemized, is all he needs for this purpose. 

    If still in question, ask his CPA what he needs.

     

  9. Piffin | Mar 31, 2009 01:24pm | #17

    if you itemize, that is the only receipt they need.

     

     

    Welcome to the
    Taunton University of
    Knowledge FHB Campus at Breaktime.
     where ...
    Excellence is its own reward!

    1. User avater
      ottcarpentry | Mar 31, 2009 04:36pm | #19

      I guess that may wind up being the crux of the issue. Because of the size of the job I didn't itemize the materials on the invoices. It usually would have taken me an extra hour to type up the invoices if I had itemized them. The job was T&M with me collecting some money for materials upfront and sometime getting reimbursed. Towards the end I simply used his credit card # to order many of the materials. I made sure the client was aware of all larger purchases, and they were aware of most of the smaller purchases as well. I figure that I'll search back through and make copies of all the purchases made directly with their CC. In order to be sure he got all of the receipts that were purchased that way since they aren't reflected on any of the invoices. Then I'll print copies of all the invoices and provide a summary page for the tax guy.Do you see any thing wrong with that approach, or do you think may it appear that I'm trying to be dishonest in some way and I should just make copies of everything and blackout the items on the copies that were my purchases?Thanks,Ott

      1. JohnCujie | Mar 31, 2009 04:44pm | #20

        I did a job for a guy who wanted the sales tax he paid on materials itemized so that he could take the deduction. He could not take that deduction since I paid the sales tax when I bought the materials.He needed me to obtain a resale license so that he was paying the sales tax directly to me for the tax deduction to apply.Hope that makes sense,John

      2. Piffin | Mar 31, 2009 06:27pm | #24

        Well, the use of his CC and the way you handled this sounds like he actually bought the materials and that you do have to dig and provide him the receipts. I wouldn't want to do that way.I also do a few items out of a 'pool' but haven't ever worded it that way. it just happens.On smaller jobs I will show a round figure amt for "misc screws, glue, and nails, or "caulk, sandpaper, and paint" which is my best guess est of that stuff for around 25-75 bucks. By the time my guess is getting over fifty bucks it is time to start thinking about itemizing things, both for customer trust level, and to protect myself because when I itemize, those items almost always total higher dollars than when I do a round figure guess.I have often heard from clients on small jobs where I itemize that they like to see that. They have used others in the past who only showed, "materials, $378.95" on the bill and that always leaves room for doubt. The customer pays it but lives forever after wondering....and then calls another handyman or remo guy the next time.An example - my latest job I itemized everything but took one shortcut and showed a mile long list of small items picked out at Lowes as a single line on my invoice "Lowes items - fixtures, tile, etc.____$879,79" I don't normally shop Lowes but did this pickup at customer request and charged them the time to do it, and saved time itemizing the bill,but I got a phone call questioning that one line item on my bill. Once they heard what all was on it, no problem. 

         

        Welcome to the Taunton University of Knowledge FHB Campus at Breaktime. where ... Excellence is its own reward!

        1. User avater
          ottcarpentry | Apr 01, 2009 04:38pm | #37

          Like I said earlier, He was my first client when I was getting started. I did remodeling work of 7 or 8 rentals for him, 4 of them being quite extensive. I just worked by the hour for him then. I got to work on many different styles and ages of houses and deal with many different problems with no real risk to myself. It was like getting paid to go to school.I relaxed several of the guidelines I had set up for myself of how I conduct business because of the past relationship. I should have known better. It's amazing how much you can go out of your way for someone, and they not only don't appreciate it, but simply want more and more.For almost all other jobs I've worked on for the last several years, it's T&M with the client providing the materials, or a bid w/ change orders, with estimated materials and a third labor up front. I've gotten to the point where I can estimate accurately enough that I try to do everything by bid anymore.I'm returning to my guidelines and sticking to them.Ott

      3. wane | Apr 01, 2009 03:15pm | #35

        If I were the client I'ld like the receipts for anything that I might be able to make a warranty claim on .. but lumber, drywall, etc, not required ..

        1. marv | Apr 01, 2009 03:49pm | #36

          Whats the big deal.  Just give him the receipts showing sales tax paid (upon his final payment for the job). He and his accountant can sort it out.You get out of life what you put into it......minus taxes.

          Marv

  10. JTC1 | Mar 31, 2009 03:31pm | #18

    I work mostly T+M with no mark up on materials, however, I charge for the time spent picking up materials. All mileage associated with the job is also billed at the Federal rate.

    I always ask first, but usually end up taking any leftover material. They know that this material goes into the "pool", and that they have probably gotten some material from the "pool" for their job. The "pool" supplies things like the one square foot of 3/4" plywood to patch their sub-floor - rather than them having to pay for a full sheet.

    Usually I suggest that the HO keep and store any leftover hardwood flooring, tile, shingles or siding for future repairs.

    My invoices include an itemized list of materials, and I charge for the time spent to prepare the invoice with it's material list.

    I would think one of my invoices would be sufficient for tax or insurance purposes.

    Although I have never been asked, I would gladly provide copies of the receipts along with an invoice for the time spent making the copies and any expenses incurred.

    My clients are mostly executives, retired executives and self-employed professionals.  They understand that time is money and they all seem to be fine with this arrangement.

    Jim

     

    Never underestimate the value of a sharp pencil or good light.
    1. User avater
      ottcarpentry | Mar 31, 2009 05:04pm | #21

      I've often worked the same way, T&M, no markup, I even shop around for better prices for the client. I've often told clients that if they needed copies of receipts I would provide them upon request, but in 11 years noone ever has.I must admit that I am annoyed with this particular client. I've known them for about 10 years and did a lot of work for them. They were my first client actually. I had decided about 5 years ago that because of the way they conducted themselves, I wouldn't take another job for them. Well... their 1920's house had a fire, and they came to me and asked me to handle all the finish work, tile work, and cabinetry. I provided design ideas that saved them probably $40,000.00 from what their GC had proposed. During the course of the job I watched the GC make mistake after mistake that cost them tons of money. Their hired him to build a large back patio/porch, and second two car garage on the property before I was even half way finished with my portion of the job, and cried no money while purchasing thousands of dollars worth of furniture. They asked for a ball park on time and changed so many things that it took me over twice as long and I still couldn't finish. I reduced my wages and built them this kitchen 115725.1 at T&M while passing about $5,000.00 worth of material saving so It probably cost them about $40,000.00 all together (maybe $20-$25k labor for me).I finally was ready to quit, and talked with them, and they said they wanted to work things out to finish. After about 6 weeks of about a week and a halfs worth of work, because they wouldn't make up thier minds, I finally said enough and just as I was about to call them and tell them, he shows up and says that they got some low bids by some larger production cabinet and door shops because of the recession and wanted to go with them. All the while during the course of the year I'd been involved I had open wall in my own house from my own kitchen remodel I'd put on hold to work on their house, which was causing health problems for my family. Which he used as an excuse to the lumberyard when he returned the remaining materials saying that I didn't have time for his job because I was working on my own house. I made about $46,000.00 on the whole job and spent about $23,000.00 on equipment and materials upgrading my shop in for and in anticipation of all of the work....And NOW he wants receipts...Sorry for the rant, but you can see it's been a rough year.Ott

      Edited 3/31/2009 10:07 am ET by ottcarpentry

      1. JTC1 | Mar 31, 2009 08:33pm | #26

        My sympathies, sounds messy.

        Might be easiest just to dig out the receipts and wash your hands of the whole thing.

        Look on the bright side - you have a new shop!

        JimNever underestimate the value of a sharp pencil or good light.

        1. User avater
          ottcarpentry | Apr 01, 2009 04:43pm | #39

          There is that to be greatful for (except I'm still paying off the CC's).I now have a Woodmaster molder/planer, a Powermatic 14" bandsaw, Powermatic 8" Jointer, a Powermatic Drill press, and a Jet mini lathe, as well as a few other odds and ends that make the job go easier. I now have the capability to build most anything I can think of in a timely manner.Ott

  11. Bowz | Mar 31, 2009 05:20pm | #22

    I have not been asked for receipts, but twice I have been asked to break out the cost of windows and insulation material for tax purposes. I have simply sent them a note on the same invoice form stating the amount that they were charged for those items. I included my 20% markup as part of the total but I did not break that out into detail.  I didn't include all the small parts, but thinking about it maybe I should have.

    Seemed to work for both parties.

    The other thing I did was to call back to a couple other clients that I did windows and insulation for and make them aware that they should check with their tax person and see if they could benefit from any more deductions. Nobody took me up on it, but at least it was a reason to stay in contact with a few clients.

    Bowz

  12. oops | Mar 31, 2009 06:09pm | #23

    I don't know if this is the situation in you case, but it could be that they are looking for the sale tax amounts and not necessarily the total cost of the materials. In some states where there is not a state income tax, a limited amount of state sales tax is deductible on you Fed. income taxes. If you validate more sales tax than is considered normal, you can deduct it.

    Again, I have know idea if this is why the invoices are being requested. As was previously suggested, why don't you just ask the persons CPA and end the all speculation.

  13. renosteinke | Mar 31, 2009 11:44pm | #30

    A single word: NO.

    They have no need to know what you paid,or where you purchased the materials. Any warranty issues refer back to you; it is your obligation to make things right - not theirs.

    Now, they DO have a legitimate concern that materials delivered to their site be paid for. They do not want to be subject to a lien from the supplier. That's whatlien releases are for.

    I have had one guy ask for such information. It was amazing how his understanding of the English language was directly proportional to whether he liked what he was hearing. The simple answer is: NO. If he presses, be blunt: tell him it is none of his business - and if he wishes to go shopping himself, he has your best wishes.

    Such folks are - simply put - trying to get you to work for free. Heck, if you offered to work for free, they would ask you for a fee!

    I say this with a clear conscience; I do not mark up my materials. Generally speaking, I have no opposition to the customer providing materials; many times I have taken the customers' credit card to the parts house.

    Keep in mind that there is no reason for figures to 'add up.' That is, a job consisting of $100 in parts and $100 in labor can quite legitimately be quoted as $140 in labor only.

    Why is that? Because there will still be bits and pieces you will need to supply. Because you will lose efficiency if the customer gets the wrong stuff. Because you're still on the hook for warranty issues.

  14. RedfordHenry | Apr 01, 2009 03:08am | #32

    I'll be happy to provide a copy of every slip of paper in my file that is relevant to a client's job.  Since this level of effort was not included in my original bid, the cost for this service is my standard hourly rate plus expenses of course.

    1. User avater
      ottcarpentry | Apr 01, 2009 04:45pm | #40

      Yeah, I was thinking of that too. Maybe I will provide one last invoice to the pile.Ott

  15. maverick | Apr 01, 2009 05:11am | #33

    if you were using my CC to purchase materials I would want the receipts also. I would suggest you get away from that practice

    use your own CC or get a deposit to cover expenses or both. then get in the habit of attaching a small percentage mark-up.

    I get rewards points on my CC. last year I implemented a 15% mark-up on all expenses. it amounted to an extra 20K in my favor for the year

    your business needs to make money too

  16. User avater
    Ted W. | Apr 01, 2009 04:38pm | #38

    I just want to add that if they materials are included in the receipt from your work, then they get the receipts for the materials, they are "Doubling" the receipts.

    ~ Ted W ~

    Cheap Tools! - MyToolbox.net
    See my work - TedsCarpentry.com

    1. User avater
      ottcarpentry | Apr 01, 2009 04:47pm | #41

      I think I mentioned earlier that I thought they might be trying to head down that road. "double" claiming the materials. Frankly, I wouldn't put it past them.Ott

      1. User avater
        Ted W. | Apr 01, 2009 08:24pm | #43

        Well then, YOU made a very good point =)

        Even some of my best customers are not above trying to manipulate reciepts, regardless of how it effects my business. That doubling up on reciepts also hits the contractor when IRS sees both contractor and customer claimed expenses for materials, and both could end up being audited because of it. I'm not sure whether said customer is not aware of this or if they just don't care. Either way, we gotta watch our butts when it comes to reciepts or any other sort of paper trail.~ Ted W ~

        Cheap Tools! - MyToolbox.netSee my work - TedsCarpentry.com

Log in or create an account to post a comment.

Sign up Log in

Become a member and get full access to FineHomebuilding.com

Video Shorts

Categories

  • Business
  • Code Questions
  • Construction Techniques
  • Energy, Heating & Insulation
  • General Discussion
  • Help/Work Wanted
  • Photo Gallery
  • Reader Classified
  • Tools for Home Building

Discussion Forum

Recent Posts and Replies

  • |
  • |
  • |
  • |
  • |
  • |
View More Create Post

Up Next

Video Shorts

Featured Story

Affordable Scans, Accurate Plans

Hover's smartphone app offers an easier way to get precise 3D scans.

Featured Video

Video: Build a Fireplace, Brick by Brick

Watch mason Mike Mehaffey construct a traditional-style fireplace that burns well and meets current building codes.

Related Stories

  • Podcast Episode 686: Brick Steps, Ground-Source Heat Pumps, and Greenhouses in Nova Scotia
  • FHB Podcast Segment: Efficient HVAC for a New Build
  • Affordable Scans, Accurate Plans
  • FHB Summit 2025 — Design, Build, Business

Highlights

Fine Homebuilding All Access
Fine Homebuilding Podcast
Tool Tech
Plus, get an extra 20% off with code GIFT20

"I have learned so much thanks to the searchable articles on the FHB website. I can confidently say that I expect to be a life-long subscriber." - M.K.

Get home building tips, offers, and expert advice in your inbox

Signing you up...

This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.
See all newsletters
See all newsletters

Fine Homebuilding Magazine

  • Issue 331 - June 2025
    • A More Resilient Roof
    • Tool Test: You Need a Drywall Sander
    • Ducted vs. Ductless Heat Pumps
  • Issue 330 - April/May 2025
    • Deck Details for Durability
    • FAQs on HPWHs
    • 10 Tips for a Long-Lasting Paint Job
  • Issue 329 - Feb/Mar 2025
    • Smart Foundation for a Small Addition
    • A Kominka Comes West
    • Making Small Kitchens Work
  • Issue 328 - Dec/Jan 2024
    • How a Pro Replaces Columns
    • Passive House 3.0
    • Tool Test: Compact Line Lasers
  • Issue 327 - November 2024
    • Repairing Damaged Walls and Ceilings
    • Plumbing Protection
    • Talking Shop

Fine Home Building

Newsletter Sign-up

  • Fine Homebuilding

    Home building tips, offers, and expert advice in your inbox.

  • Green Building Advisor

    Building science and energy efficiency advice, plus special offers, in your inbox.

  • Old House Journal

    Repair, renovation, and restoration tips, plus special offers, in your inbox.

Signing you up...

This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.
See all newsletters

Follow

  • Fine Homebuilding

    Dig into cutting-edge approaches and decades of proven solutions with total access to our experts and tradespeople.

    Start Free Trial Now
    • Facebook
    • Instagram
    • X
    • LinkedIn
  • GBA Prime

    Get instant access to the latest developments in green building, research, and reports from the field.

    Start Free Trial Now
    • Facebook
    • YouTube
  • Old House Journal

    Learn how to restore, repair, update, and decorate your home.

    Subscribe Now
    • Facebook
    • Instagram
    • X
  • Fine Homebuilding

    Dig into cutting-edge approaches and decades of proven solutions with total access to our experts and tradespeople.

    Start Free Trial Now
    • Facebook
    • Instagram
    • X
    • LinkedIn
  • GBA Prime

    Get instant access to the latest developments in green building, research, and reports from the field.

    Start Free Trial Now
    • Facebook
    • YouTube
  • Old House Journal

    Learn how to restore, repair, update, and decorate your home.

    Subscribe Now
    • Facebook
    • Instagram
    • X

Membership & Magazine

  • Online Archive
  • Start Free Trial
  • Magazine Subscription
  • Magazine Renewal
  • Gift a Subscription
  • Customer Support
  • Privacy Preferences
  • About
  • Contact
  • Advertise
  • Careers
  • Terms of Use
  • Site Map
  • Do not sell or share my information
  • Privacy Policy
  • Accessibility
  • California Privacy Rights

© 2025 Active Interest Media. All rights reserved.

Fine Homebuilding receives a commission for items purchased through links on this site, including Amazon Associates and other affiliate advertising programs.

  • Home Group
  • Antique Trader
  • Arts & Crafts Homes
  • Bank Note Reporter
  • Cabin Life
  • Cuisine at Home
  • Fine Gardening
  • Fine Woodworking
  • Green Building Advisor
  • Garden Gate
  • Horticulture
  • Keep Craft Alive
  • Log Home Living
  • Military Trader/Vehicles
  • Numismatic News
  • Numismaster
  • Old Cars Weekly
  • Old House Journal
  • Period Homes
  • Popular Woodworking
  • Script
  • ShopNotes
  • Sports Collectors Digest
  • Threads
  • Timber Home Living
  • Traditional Building
  • Woodsmith
  • World Coin News
  • Writer's Digest
Active Interest Media logo
X
X
This is a dialog window which overlays the main content of the page. The modal window is a 'site map' of the most critical areas of the site. Pressing the Escape (ESC) button will close the modal and bring you back to where you were on the page.

Main Menu

  • How-To
  • Design
  • Tools & Materials
  • Video
  • Blogs
  • Forum
  • Project Guides
  • Reader Projects
  • Magazine
  • Members
  • FHB House

Podcasts

  • FHB Podcast
  • ProTalk

Webinars

  • Upcoming and On-Demand

Podcasts

  • FHB Podcast
  • ProTalk

Webinars

  • Upcoming and On-Demand

Popular Topics

  • Kitchens
  • Business
  • Bedrooms
  • Roofs
  • Architecture and Design
  • Green Building
  • Decks
  • Framing
  • Safety
  • Remodeling
  • Bathrooms
  • Windows
  • Tilework
  • Ceilings
  • HVAC

Magazine

  • Current Issue
  • Past Issues
  • Magazine Index
  • Subscribe
  • Online Archive
  • Author Guidelines

All Access

  • Member Home
  • Start Free Trial
  • Gift Membership

Online Learning

  • Courses
  • Project Guides
  • Reader Projects
  • Podcast

More

  • FHB Ambassadors
  • FHB House
  • Customer Support

Account

  • Log In
  • Join

Newsletter

Get home building tips, offers, and expert advice in your inbox

Signing you up...

This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.
See all newsletters
See all newsletters

Follow

  • X
  • YouTube
  • instagram
  • facebook
  • pinterest
  • Tiktok

Join All Access

Become a member and get instant access to thousands of videos, how-tos, tool reviews, and design features.

Start Your Free Trial

Subscribe

FHB Magazine

Start your subscription today and save up to 70%

Subscribe

Enjoy unlimited access to Fine Homebuilding. Join Now

Already a member? Log in

We hope you’ve enjoyed your free articles. To keep reading, become a member today.

Get complete site access to expert advice, how-to videos, Code Check, and more, plus the print magazine.

Start your FREE trial

Already a member? Log in

Privacy Policy Update

We use cookies, pixels, script and other tracking technologies to analyze and improve our service, to improve and personalize content, and for advertising to you. We also share information about your use of our site with third-party social media, advertising and analytics partners. You can view our Privacy Policy here and our Terms of Use here.

Cookies

Analytics

These cookies help us track site metrics to improve our sites and provide a better user experience.

Advertising/Social Media

These cookies are used to serve advertisements aligned with your interests.

Essential

These cookies are required to provide basic functions like page navigation and access to secure areas of the website.

Delete My Data

Delete all cookies and associated data