Going Legal?

[KSL]

First of all when would you say that you go legal and start paying taxes and what not. 21 yrs old bout 35 accounts. IF so how do you go about becoming legal and getting a tax id and making your company legit.

thanks for the help guys

[IN2MOWN]

If you are making money then you should be paying taxes on it.

[delphied]

michigan.gov and go LLC maybe. Thats how I did it. IRS.gov for tax ID You need to research it on the internet unless you trust other people. Personally, my feeling is that there is no honor in paying tax to a crooked govt and if it werent for wanting to protect what I already have I prolly wouldnt be legit.

[wintergreenlawn&landscape]

First of all when would you say that you go legal and start paying taxes and what not. 21 yrs old bout 35 accounts. IF so how do you go about becoming legal and getting a tax id and making your company legit.

thanks for the help guys

Fill out sales and use tax paperwork with your state and theyll send you your license and tax number. But first decide if your going to go LLC, etc. Make sure you contact your insurance agent and buy appropriate insurance. Not worth losing everything because you spit out a rock and hit somebody or some other freak accident. If you go LLC, that will protect you also by enabling them to only go after your business and not your personal assets.

[sandman23]

KSL, you should get an accountant. There are so many aspects to running a legit business. It is not as simple as getting an ID and paying taxes. You should get incorporated. I am a S corp. It was suggested that I become SCorp instead of LLC. I don't remember all the reasons but they made sense at the time. There is Payroll (even if it is just you, you should pay yourself a salary). There is insurance (liability, theft, auto). You need a business license. You need an accounting/invoicing program. I use QiuckBooks Pro. And, there always seems to be something that I need to file, send in, or renew.

My accountant takes care of all that for me. I could not imagine doing this without her.

[cgaengineer]

First of all when would you say that you go legal and start paying taxes and what not. 21 yrs old bout 35 accounts. IF so how do you go about becoming legal and getting a tax id and making your company legit.

thanks for the help guys

I am not an accountant and dont claim to be one, but here is my advice and your mileage may vary...

You can start out paying taxes on a 1040 at the end of the year like I do, and the commercial accounts make it easy as they usually send you a 1099. You probably wont get all the benefits as starting a corporation like purchasing supplies with a tax ID and deferring taxes, but you can make it work until you see fit to change. I have no idea how much money you are making, nor do I care, but I do know that after so much income the IRS wants tax payments sent quarterly.

I have claimed my income on my 1040 for 3 years and will do it again this year, you just have to make sure you put enough back to cover yourself at the end of the year. I do this because I have a fulltime job right now and its easier for me.

[wintergreenlawn&landscape]

KSL,
If you have numerous employees and are looking to save on employment tax, then an S Corp is for you. However, If you are going to be the sole proprieter, owner / operator etc ,then it will be easier to facilitate an LLC and afford you better liability protection. Like sandman said , talk to an accountant. I sent you in the general direction, by no means did I say it was that cut and dry. I also use QuickBooks Pro, its by far the easiest and most thorough program out there for the small business.

[RedSox4Life]

Personally, my feeling is that there is no honor in paying tax to a crooked govt and if it werent for wanting to protect what I already have I prolly wouldnt be legit.

Are you serious? Who pays for the roads you drive your truck on every day? Who pays for the school your kids go to? Who pays the social security you'll collect when you're too old to work? Who pays for your security?
Yes, the "crooked govt" does it all.

[Enzo]

My friend is an accountant and he is hooking me up with my taxes and all that plus he is getting me registered with an LLC so I dont got to do it myself or with an attorney.

[ProTouch Groundscapes]

llc is really easy to set up, just a couple pages of paperwork from the state and your set. only need a lawyer to draft up paperwork for corporartions. get yourself a tax id after you register with the state. then make sure you include tax in your prices or else it eats into your revenue. set yourself up with some liability insurance and you should be good to go! we have an accountant do all our taxes, alot of different stuff in our household, dad has a construction company, our landscaping company, mom's personal income etc... plus hes been a friend of the family for awhile.

[corey4671]

social INsecurity...if they'd let me out today, I'd let em have everything I've paid in to date...just let me invest MY money the way that I see fit!! It's about time for a modern day Boston Tea Party!! Yes I know that was in rebellion against the British gov't but if you have half a brain plugged in you understand the picture I'm trying to paint!! So what if it's color by numbers!

[KSL]

thanks for the help guys, i appreciate it. also i was wondering how much u think they take out for taxes for instance if u were makeing 35k a year?

[delphied]

Are you serious? Who pays for the roads you drive your truck on every day? Who pays for the school your kids go to? Who pays the social security you'll collect when you're too old to work? Who pays for your security?
Yes, the "crooked govt" does it all.

Gas tax pays for roads which I pay because I cant figure out how not to. Property tax for schools and I pay an awful lot. Ive already paid more Soc tax than Ill ever get in Soc sec. Ask yourself what income tax pays for because Im not so sure anyone knows. You must be the only other stinking liberal on this site besides myself. After all, these conservative businessmen try to avoid all the tax they can dont they?

[ProTouch Groundscapes]

i charge sales tax on my services. any business that offers you services charges sales tax, why should landscaping be any different?

[wintergreenlawn&landscape]

thanks for the help guys, i appreciate it. also i was wondering how much u think they take out for taxes for instance if u were makeing 35k a year?

What is sales tax % in MI?

[KSL]

6% sales tax

[delphied]

What is sales tax % in MI?

no sales tax in mich for mowing as yet.

[riverwalklandscaping]

All the rules vary by state. If your working by yourself, go for a sole owner LLC. If you try an S or C corp, not only will you have to pay a large corporate tax filing fee, you need all sorts of legal documents drawn up etc. LLC will protect your assets if someone comes after you. This is the order of priority I'd state

1) GET INSURANCE if you don't have it which I doubt you do if you have to EIN
2) Register your trade name with the secretary of state
3) Register an EIN (SSN for businesses)
4) Open a business bank account (so you can cash checks made out to your company)
5) Get an accountant - even if he just does your taxes, you can ask him a few questions to help you out
6) Take some business classes - this could be done at a local community college or online even
7) Get a website
8) TAKE A VACATION


Note: you can't do 1 without doing 2,3 and maybe 4, but I still think its most important

I'm sure there are other things i've forgotten, but those are some of the most important things.

As for accountants, yes its possible to do it yourself, but think of it like mowing a lawn. People who mow their own lawns do a crappy job. I am a business major from a good college, and I have taken several semesters of accounting, and I still don't do my own. People who do it every day, just do it better (usually).

Good luck.

P.S.

Whoever stated paying taxes is dumb because our goverment is crooked, should refer to the quote in my signature. There never was, is, or will be a perfect form of government. If we want our roads paved, so we can get to our lawns to mow, we gotta pay taxes. Just my 2 c.

[riverwalklandscaping]

Oops, Don't have a signature on this forum... well i do now

[stuffdeer]

All the rules vary by state. If your working by yourself, go for a sole owner LLC. If you try an S or C corp, not only will you have to pay a large corporate tax filing fee, you need all sorts of legal documents drawn up etc. LLC will protect your assets if someone comes after you. This is the order of priority I'd state

1) GET INSURANCE if you don't have it which I doubt you do if you have to EIN
2) Register your trade name with the secretary of state
3) Register an EIN (SSN for businesses)
4) Open a business bank account (so you can cash checks made out to your company)
5) Get an accountant - even if he just does your taxes, you can ask him a few questions to help you out
6) Take some business classes - this could be done at a local community college or online even
7) Get a website
8) TAKE A VACATION


Note: you can't do 1 without doing 2,3 and maybe 4, but I still think its most important

I'm sure there are other things i've forgotten, but those are some of the most important things.

As for accountants, yes its possible to do it yourself, but think of it like mowing a lawn. People who mow their own lawns do a crappy job. I am a business major from a good college, and I have taken several semesters of accounting, and I still don't do my own. People who do it every day, just do it better (usually).

Good luck.

P.S.

Whoever stated paying taxes is dumb because our goverment is crooked, should refer to the quote in my signature. There never was, is, or will be a perfect form of government. If we want our roads paved, so we can get to our lawns to mow, we gotta pay taxes. Just my 2 c.

I did one without doing any of the following objectives.

[IN2MOWN]

i charge sales tax on my services. any business that offers you services charges sales tax, why should landscaping be any different?


I dont know how it is where you live but here you dont charge tax on service you charge tax on the material that is used during the service.

For example.

I dont charge sales tax on mowing but if I plant a tree or lay mulch I charge sales tax on the tree or the mulch.

[ProTouch Groundscapes]

i include taxes on any materials i buy for clients. such as fert, mulch etc.

where we live, providing a service classifies you as a vendor, therefore you need to charge sales tax on your services. i pay taxes on all income i receive from mowing, therefore if i didnt charge tax:

say $25 to mow a lawn.
i charge my local sales tax 7.5%
25*1.075=26.875 so round it to $27

if not, i end up eating the cost of the tax into the $25

my accountant explained all this to me and it makes much more sense hearing it from him than me trying to explain it. he clarified all the licenses required in my county for service business such as landscaping/lawncare.

[tamadrummer]

Whatever you do, do not Incorporate or go LLC for the sole purpose of protecting your assets if you are a solo operator.

The reason I say this is because you are not going to have the protection you are being led to believe you will have. It is a myth that if you are a corp. or LLC. that they can only sue the company. The person that has been injured is also entitled to sue the operator of the machine that caused the injury so since you are the owner of the company you and your company are both going to be sued. There is no protection afforded.

Just be sure to carry the max amount of insurance and keep an ocdc on your machine. I will be putting the Power Chute on my 727a as soon as my taxes come in but I also carry a 3 million dollar aggregate policy for protection.

Anything you can do to protect yourself is smart but doing the corp/llc thing too early will likely increase the cost of getting your taxes done and I don't know if there are other problems but I did really well on my returns this year as an Sole Prop.

Just something to think about.

[delphied]

Whatever you do, do not Incorporate or go LLC for the sole purpose of protecting your assets if you are a solo operator.

The reason I say this is because you are not going to have the protection you are being led to believe you will have. It is a myth that if you are a corp. or LLC. that they can only sue the company. The person that has been injured is also entitled to sue the operator of the machine that caused the injury so since you are the owner of the company you and your company are both going to be sued. There is no protection afforded.

Just be sure to carry the max amount of insurance and keep an ocdc on your machine. I will be putting the Power Chute on my 727a as soon as my taxes come in but I also carry a 3 million dollar aggregate policy for protection.

Anything you can do to protect yourself is smart but doing the corp/llc thing too early will likely increase the cost of getting your taxes done and I don't know if there are other problems but I did really well on my returns this year as an Sole Prop.

Just something to think about.

I agree with this post. The main reason to form the business IMHO is so you can buy liability insurance. Then they force you into commercial vehicle insurance which, for me , was double. But you have to have it. Liability wise, I have a million because I only have a half million in assets. Go legal and start paying insurance and then 1/3 of all profit goes to Uncle Sam basically. Maybe more. Me fee for doing my taxes was $460. Gotta find a new accountant. Everybody wants a little hunk of your pie.

[ProTouch Groundscapes]

we are a registered llc and carry a 2 million aggregate policy.

we werent required to change over to a commercial auto insurance policy. we discussed this thouroughly and they said our commercial liability policy covers vehicle use on site and our auto insurance covers in transit. i am still a little skeptical of this and am still looking into the differences.

[delphied]

we are a registered llc and carry a 2 million aggregate policy.

we werent required to change over to a commercial auto insurance policy. we discussed this thouroughly and they said our commercial liability policy covers vehicle use on site and our auto insurance covers in transit. i am still a little skeptical of this and am still looking into the differences.

Thats weird because my agent said I needed commercial because my vehicle could damage something on site. Run over a sprinkler and break it was the example given by her. I said well now I know I dont need it because my vehicle will never leave the street in front of their house. Then it was because, well, you put more miles on it. I gave in, you cant win with insurance companies. You just hope they wont turn on you if you have an accident. Am I cynical? Geez I hope not.

[tamadrummer]

Me fee for doing my taxes was $460. Gotta find a new accountant. Everybody wants a little hunk of your pie.

Just to put it a bit more into perspective, mine was $200 because we just had to file a schedule C form in addition to my normal taxes for the business.

We do our own spread sheets for income/outflow so the accountant just had to do the number plugging. When and if I become an employer, I will then think about S type corp or LLC.

[delphied]

Just to put it a bit more into perspective, mine was $200 because we just had to file a schedule C form in addition to my normal taxes for the business.

We do our own spread sheets for income/outflow so the accountant just had to do the number plugging. When and if I become an employer, I will then think about S type corp or LLC.

Yes, all he did for me was plug in figures basically. It was 1040 standard with SCH C and several pages of investment gains and losses with a IRA rollover form also. He planned out my quarterly payments as well but I think I was gouged.

[GraZZmaZter]

OMG this is a joke right??

When should you go legal? So you admit to being ILLEGAL?!?!? My recommendation would be about 3 minutes BEFORE you decided to post this.

He has to be from MI also, doesnt he....

[KSL]

easy grass man just gettin started in the business sorry i asked for help...wasnt born with einstein intelligence like you

[GSPHUNTER]

we are a registered llc and carry a 2 million aggregate policy.

we werent required to change over to a commercial auto insurance policy. we discussed this thouroughly and they said our commercial liability policy covers vehicle use on site and our auto insurance covers in transit. i am still a little skeptical of this and am still looking into the differences.

This is wrong, at least in MO. Commercial Auto rates are alot higher usually. If your agent gave you a rate for Comm. Auto, he probably figured you would shop your insurance at that time to find a better rate. Instead he tells you that you don't need it, and in fact the company will have to pay the first claim you have if you wreck a truck on the road because the agent gave you this info. If the company finds out that you had signage on your truck with commercial mowers, they will most likely cancel you and you will have to find commercial auto at that time. Probelm now is that you have an accident on your record trying to shop for insurance.

He is right when he says that damage caused by equipment will be covered by your GL policy, but that goes for anywhere your equipment might be not just on work grounds. Ask your agent what a commercial auto policy is for then and see what he says.

Like I said, I'm speculating here, but I worked in insurance before starting my biz and agents will do a lot to write business and retain business.

[IN2MOWN]

Gas tax pays for roads which I pay because I cant figure out how not to. Property tax for schools and I pay an awful lot. Ive already paid more Soc tax than Ill ever get in Soc sec. Ask yourself what income tax pays for because Im not so sure anyone knows. You must be the only other stinking liberal on this site besides myself. After all, these conservative businessmen try to avoid all the tax they can dont they?



People were saying that 50 years ago...

[ProTouch Groundscapes]

Ask your agent what a commercial auto policy is for then and see what he says.

ya i knew it sounded a little funny. but we are currently looking for a commercial umbrella policy that covers everything.

[GraZZmaZter]

Unfortunately if you actually know what you were talking about ... Einstein actually wasn't born with "Einstein Intelligence" ... He flunked out of school! LOL

Common sence will get you a mile with this one bro. If you cant figure out when you should pay taxes on money your receive from a service your performing ... sorry, maybe getting a job is your best option.

[VBsnow]

"but we are currently looking for a commercial umbrella policy that covers everything."

Honestly, no offense, but all of your statements concerning insurance make no sense. Umbrellas do not cover everythin, and al lof them are different. An umbrella is an extension of existing coverage, and the addition of certain coverages often with a self retained limit.

Let me make this simple for you on the commercial auto everyone:

Do you make money transporting yourself or equipment to job sites?

If yes, you need a commercial policy. At the very least an endorsement to your personal policy that STATES IN WRITING you are allowed to do so.

If no you may be at the wrong site.

You need to fire your agent ASAP. If you are serious about being in business you need a knowledgeable rep that can answer your questions correctly. Calling 10 ads out of the phone book and checking prices will deliver the same quality of service it would in your business-the bottom feeders.

[IN2MOWN]

Unfortunately if you actually know what you were talking about ... Einstein actually wasn't born with "Einstein Intelligence" ... He flunked out of school! LOL

Common sence will get you a mile with this one bro. If you cant figure out when you should pay taxes on money your receive from a service your performing ... sorry, maybe getting a job is your best option.




Good one...:rolleyes:

[ProTouch Groundscapes]

Honestly, no offense, but all of your statements concerning insurance make no sense. Umbrellas do not cover everythin, and al lof them are different. An umbrella is an extension of existing coverage, and the addition of certain coverages often with a self retained limit.

why do you jump in and make assumptions here? ya man, totally, i can get an umbrella policy from my super agent that covers everything from homeowners insurance to life insurance to my commercial liability insurance. maybe if i said that you could have jumped all over this. what im getting at is that we are looking to add coverages to our existing policy. just because i didnt say exactly what we were doing doesnt mean i assumed an umbrella to cover everything for us.

we currently have two insurance companies, state farm for our homeowners etc.. and nationwide for our commercial policy. i want to move to one agent, but until i get things straightened out, im getting different stories from both of them regarding the commercial auto policy.

[vacamper]

VB's right. If you're using your vehicle for business purposes, you need to at least have endorse your personal auto policy for business use. The better way to do it would be to get a commercial auto policy. Its worth it for the broader coverage and protection.

Just a second opinion from someone with 13 yrs in the insurance business and we specialize in the green industry.

[VBsnow]

"ya i knew it sounded a little funny. but we are currently looking for a commercial umbrella policy that covers everything."

Insurance is a literal business. If you say something it is not for everybody else to decipher what you 'really' meant. My business is protecting people from losses, not mind reading. Before you go jumping on me for offering you FREE advice that you do not seem able to produce from the agent you PAY, perhaps you should take a look at where your problem started. You do not trust your agents advice. You went to a site that is for landscapers looking for insurance advice. So lets review your problem: You don't believe the person you hired, you look for anonymous help online, you get mad at someone who helped you because you misspoke/typed.

For those people out there who are reading his unprofessional reply, I suggest you stick w/ the bees and honey approach as opposed to the one demonstrated by this "professional." Does anyone have any doubts as to why he cannot get basic services from his agents(plural)?

By the way, these are basic questions you posed on this board. If your agent cannot get it straight they either:

a) Don't want to help. :nono:

b) Are not qualified to help you. :dizzy:

c) You are unable to understand. :confused:

In conclusion, having the same agent and/or company for your business insurance and your personal insurance does not get you a discount. If you look at the paperwork close enough, you may notice that it is actually not even the same company. You may buy from "Brand A Ins," but they are actually a group of companies. To further complicate the matter, most agents are independents and may split your insurance w/ a multitude of companies. To stick w/ one 'captive' insurer such as the two you named is not the best route. Not for commercial insurance. There are too many variables from year to year.

Thanks vacamper. Hope all is well up there in Fredricksburg.

[delphied]

For those people out there who are reading his unprofessional reply, I suggest you stick w/ the bees and honey approach as opposed to the one demonstrated by this "professional." Does anyone have any doubts as to why he cannot get basic services from his agents(plural)?



.

I have doubts. If the agent takes his money, then the agent owes him proper service and proper answers. Poor agents are the rule rather than the exception these days. IMHO, insurance has gotten a bad reputation which, on a whole, they have earned. Just my opinion.

[VBsnow]

You picked your agents. It's easy to take jabs at insurance agents, lawyers, ect.. Many of my clients have been w/ me for more than ten years. That is not an accident. I am curious, for the sake of conversation; what do you pay for insurance each year. Just your business. Let's find the root of your problem.

[delphied]

I didnt say you were a bad agent. I dont know you from Adam. Heres a question that should be simple for an agent to answer. If I own 1 million in assets, how much liability insurance should I have? My agent didnt really know. I asked a lawyer and got an answer. whats yours? Should my auto insurance double when switched to commercial? Mine did and the funny thing is, the risk of accident is the same as if I were driving as a non commercial driver.

[VBsnow]

"If I own 1 million in assets, how much liability insurance should I have? My agent didnt really know. I asked a lawyer and got an answer. whats yours?"

Rule #1 when a client asks how much THEY need, you ask them how much do they need. Here's the problem. If I answered 4 million, and then you are sued for say 10 million, it would be my fault because I told you what you NEEDED. I can tell you that the lawyer knows this or should. I would have led you a bit though. A good way to look at the issue is how much will it take to keep a lawyer out of your personal pocket? If you are indeed sued, most lawyers do not want to go to court. How much in the worst case scenario will this take to settle? Now lets change gears. Let's say that an employee of yours runs over a 3 year old. Parents are angry. They want to make an example out of you. They don't want the money, they want to destroy you. How much should you have then?

Regardless of whether you have $o or a million in assets, you should have as much as you can get. Now if I told my clients that someone would be writing in saying how insurance agents are always trying to sell them something they don't need. My starter level LCO insurance is $319 for 1MIll and $335 for 2MILL. Week in and week out people decline the coverage for another MILLION for an additional $16. it's kind of a weird position to be standing in.

The ultimate answer is to refer to rule #1. You NEVER tell the customer how much they NEED. They TELL YOU.

"Should my auto insurance double when switched to commercial? Mine did and the funny thing is, the risk of accident is the same as if I were driving as a non commercial driver. "

First, no, it should not have doubled. I cannot be 100% in my answer unless I know all of the variables such as the drivers list, Veh. weight, addition of trailer coverage and so on. Second, your statement that the risk is the same is not supported by logic. You are in fact going to drive more as a commercial/service use. Private passenger cars are not carrying a trailer full of equipment and materials up and down the roads everyday. I should also point out that the market changes. Just a handful of years ago it was cheaper to have a business policy and that day will return. Then it will go away again. Just like it always does, the earth continues to rotate and every day is different.

In conclusion, if you do not have confidence in your agent, why do you continue to give them your business? Considering they may be the only thing between you and your assets at some point, you would think you would want to trust their advice. Your lawyer cannot help you. Most policies assume the rights of your defense. You have no say in the matter once suit has been brought against you. You might want to put some thought into this.

Get off of the price thing. Swallow the pill. Even your insurance agent gets pissed about the cost of their own insurance. We do not get breaks on the cost. In VA, it is illegal. It is simply the cost of doing business.

Bees and honey my friend. Stick to it. The end result should be winning the game.