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RD592
09-28-2006, 11:12 AM
This is my first year in the lawn buisness. I do have an LLC company with no insurace. Note I am only part time. I have 8 accounts that I make a good profit on but all of my clients are residential and they pay me cash. I also cut two peoples lawns ( my moms and my neighbos) and dont charge them at all.

I do plan on going to my CPA, but here is my problems. I dont have any invoices because they pay me cash, how much should I show, and can I claim my mom and my neighbors cuts as donations.

I also would like to know how much of a lost I could have in my first year of buisness.

Before I started my buisness I was really orginized and said I was going to invoice everything, but once I got started my clients would just come out with the cash and give it to me and they all said that they didnt need an invoice.

I did spent about 10,000 dollars to get off and started and this year I made my money back.

newz7151
09-28-2006, 11:35 AM
This is my first year in the lawn buisness. I do have an LLC company with no insurace. Note I am only part time. I have 8 accounts that I make a good profit on but all of my clients are residential and they pay me cash. I also cut two peoples lawns ( my moms and my neighbos) and dont charge them at all.

I do plan on going to my CPA, but here is my problems. I dont have any invoices because they pay me cash, how much should I show, and can I claim my mom and my neighbors cuts as donations.


Before I started my buisness I was really orginized and said I was going to invoice everything, but once I got started my clients would just come out with the cash and give it to me and they all said that they didnt need an invoice.


The first thing to do would be to not post incriminating evidence like this on a public forum.

Next, try and go back and make invoices on all the cuts you did. When people tell me "oh, I don't need a receipt" , I tell them "You don't.. but I DO" .

ATVracer
09-28-2006, 05:50 PM
So you spent 10 grand on equipment, took the time to make it an LLC, but didn't bother to spend a few hundred dollars to get insurance? Wow.

RD592
09-28-2006, 09:39 PM
So you spent 10 grand on equipment, took the time to make it an LLC, but didn't bother to spend a few hundred dollars to get insurance? Wow.


Yes I did and I saved about 1300 bucks this year because of this. I may get some next year

grass_cuttin_fool
09-28-2006, 09:46 PM
I dont give all my customers receipts, but I file each days work on an excel sheet and have a total of what I charged at the end of the year, Actually I have a sheet for each customer so that I have a record of the work for each account. Shop around for some Insurance, I dont know how much coverage that was 1300 bux but maybe look into a smaller policy, anything to help cover your butt. And remember ..........Ins is a cost of doing buisness and a deduction too, something else to help differ taxes

wayne

SodKing
09-28-2006, 09:58 PM
So, you don't keep records, don't have insurance, didn't pay ferderal or state or medicare taxes, can we then assume you didn't pay workers comp, Have no idea what went on this year but you spent some money starting up....

This has failure written all over it.

RD592
09-28-2006, 10:31 PM
So, you don't keep records, don't have insurance, didn't pay ferderal or state or medicare taxes, can we then assume you didn't pay workers comp, Have no idea what went on this year but you spent some money starting up....

This has failure written all over it.


Failure? I can quit tomorrow and have a lot to show for it. I work solo and really dont have any overhead because my properties a all in one subdivision.

Imdont know anything about running a business, but Im making really good money doing it even though I would give 25 percent of my total profits to the government.

You may be doing things right but the people I talked that are doing very good in this buisness are hidding all their cash. Just like half the people on this site.

Just my opinion.

RD592
09-28-2006, 10:42 PM
[QUOTE=SodKing]So, you don't keep records, don't have insurance, didn't pay ferderal or state or medicare taxes, can we then assume you didn't pay workers comp, Have no idea what went on this year but you spent some money starting up....

This has failure written all over it.[/QUO

Dont act like I o the government any thing

This years

federal 8,074
FICA 3,619
State 1,537

This is my real job to date.

lawnman_scott
09-29-2006, 12:14 AM
So, you don't keep records, don't have insurance, didn't pay ferderal or state or medicare taxes, can we then assume you didn't pay workers comp, Have no idea what went on this year but you spent some money starting up....

This has failure written all over it.since he is solo I think everyone would assume he didnt pay workers comp.

fiveoboy01
09-29-2006, 01:51 AM
Better get yourself some insurance. One accident, and all that money you made back will be gone, and then some.

Why would you form an LLC, a legitimate business, and then not keep decent records or use invoices?

My agreements specifically state no payment will be taken at the time of service. All invoices are mailed to my customers, except for one who is a friend of mine. I give it to him personally each month.

If they don't want an invoice, give it to them anyways. THEY can trash it, but you will have a copy.

And FWIW, part of being legit is NOT hiding the money. A good CPA will get you a lot come tax time. No need to hide the money. That is for illigit dirtbags.

hickslawns
09-29-2006, 02:46 AM
Half the people on this site hide their money? This is a kick in the shorts to at least myself. Probably "half the people on this site". I guess I am in the top half paying for the illegit, deadbeat, lowballers to collect their earned income tax credit. The only cash I ever receive is from 5-6 yards of mulch from my wife's siblings once a year which I deliver for free and sell just over my cost. Heck I haven't even collected from her one sister yet 5 months later. I invoice my customers and claim everything. I hear there are ways around it, but it isn't worth the chance. Besides, bank loans are based off income and cashflow. My opinion is you have made a statement which is going to tick off a lot of hard working/tax paying business owners on this site. My other thought process is your very off in your concept of hiding money. There are legal ways to "hide" money. It is called buying property and gaining equity while getting a write off. It is putting money into your retirement account. It is putting money into your wife's retirement account. There are legitamit ways to "hide" money. You just pay for them later when you cash out.

As far as figuring out what you NEED to claim on your taxes, talk to another local contractor and ask how many times he has mowed his accounts this year to date. This will at least get you in the ballpark as to how many times you might have done your accounts. I figure our average season has 26 cuts. Yours is probably different.

SodKing
09-29-2006, 07:27 AM
Well said Philip. The problem with this industry is companies like RD592s'.

hoyboy
09-30-2006, 10:12 PM
I'll answer your questions and resist the urge to pile on...

How much should you claim for income? All of it.

Can you count your mom and neighbor as donations? No. They are not a charitable organization as recognized by the IRS under section 501(C) of the tax code. You may try to group the expenses incurred in doing so as "training" or "advertising" or some other lame expense catagory if you can claim that by cutting their lawn you were somehow trying to further your business. Expect a fight, though. It's aggresive at best.

Your other expenses? You can only claim expenses that were for legitimate business use...and you better have a receipt. If you paid cash and didn't keep receipts, go back to those vendors and try to get a replacement. Otherwise, the IRS will disallow those expenses.

You can claim depreciation on your equipment. In fact, section 179 allows for write off of up to ($150,000? check that...it's changed alot recently) in the first year if the equipment was purchase new. If it was used, you still have a nice first year write off with the normal MACRS method.

Good luck...and, um, get some insurance.

Loy's Home Services, LLC
10-03-2006, 11:28 PM
My advice is you had better get legite. You can go to jail and all the profit that you made and them some is going to go towards fines and legal fees. Don't think that no one will notice. It is pretty obvious when someone is running a buisness illigally. Some nearby compettators could turn you in. Play buy the rules bud it's only fair to you and everybody else in this industry!

Emerscape
10-04-2006, 12:17 AM
RD592 shoot me a PM with some questions if you need be. I am a forensic accountant but can try to answer your tax questions as they come up. A good idea, other than using a financial software such as quicken or quickbooks, is to use your debit/credit cards as often as possible. Electronic statements and records are a great way to record purchases if you have trouble holding on to receipts. Also, try keeping a log book with you, use it when you fill up for gas, record your mileage, gallons, cost and location, its always a handy tool even if you dont use it for anything in the long run.

As far as insurance, it doesn't cost much and its essential. Protect yourself and those around you. Everyone on here will give you sh@t for not having it but 80% of them once operated without insurance.

If you are truly in your first year of business, estimate your income liberally and your expenses conservatively. The IRS would rather you overstate your income and understate your expenses than the other way around. Nonetheless learn from your mistakes this year and get on a straight course going foreward.. We all make mistakes... even accountants!

As for everyone else, maybe instead of bashing people right off the bat, try to explain the consequences and provide guidance instead of pushing people away.

RyanD
10-10-2006, 11:13 PM
Sounds like you got some guys who are willing to help you. I work for the IRS in the collections department. Take these guys advice. They are trying to help. I can try to field some questions if you have any as well (ecspecially what happens if you don't pay taxes). Lots of info at www.irs.gov. (http://www.irs.gov/) Click on the business tab.

fiveoboy01
10-11-2006, 12:05 AM
I work for the IRS in the collections department.

That statement should get you a LOT of friends:laugh:

RD592
10-11-2006, 09:01 AM
I made each account 1 invoice for the total amount of this seasons cuts i did for them. I will give them an invoice every month even though they pay me the money in advance.

I ll just give these invoices to my accountant and go from there.

MarkintheGarden
10-12-2006, 05:59 PM
I made each account 1 invoice for the total amount of this seasons cuts i did for them. I will give them an invoice every month even though they pay me the money in advance.

I ll just give these invoices to my accountant and go from there.

A lot of people think as you mentioned that lawn co. operators and a lot of other small businesses take cash and do not claim it. I am sure that this happens, but you will soon see why it does not happen as often as you might think. The reality is that you cannot build a business working under the table. As soon as you start keeping books you will see that the numbers game is a big part of operating a small business. If you are spending time on cash jobs and not recording it, then your business is neglected. I knew someone who learned this the hard way, it took him ten years to get his business to a point it should have been in five.

Check out the Small Business Administration, they can help you learn how to do things right.

Get Insurance!