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quadracer_13
07-26-2008, 08:11 AM
Like I have said in a couple threads already I am tryin to start a business. I was wondering if I could go ahead and get my DBA and federal tax ID number along with all my licenses and stuff now but not actually start doing lawn care til next spring. Is that legal or will i have to show profits or anything on this years taxes? any info on what to do or who to ask will help! thanks

Hortus
07-26-2008, 10:57 AM
As mentioned in those other threads, set up an appointment with a reputable accountant and/or lawyer as to the best plan of action for you, within your particular state's requirements. The most important step in building a business structure, is to file the right business type in the beginning, since future step ups in filing will be based on how you originally filed your business as.

In general, getting the formalities worked out (business account, business contact info, building business credit history, etc.) before your spring deadline, shouldn't be a problem. But again, this is what accountant/lawyers and getting familiar with your state and local regs will best answer your questions.

Another optional source for information, support and assistance for your business needs is to look up the various payroll companies out there. There a huge benefit for small solo, 1-20 employee companies.

Good luck with it all.

topsites
07-26-2008, 11:01 AM
I'm not disagreeing with the first reply but to answer the question, yes as far as I know what you speak of is perfectly legal because it is the opposite of what you speak of that isn't (and hope I'm right lol but I really think you'd be fine).

moose203
07-26-2008, 01:09 PM
The only thing i see is you will have to pay property tax on your equipment for this year. that is the way it is in TN anyway. You might want to get you business lic. Jan. 2nd to avoid this

Jason

quadracer_13
07-26-2008, 03:24 PM
Alright thats what I was looking forward to hearing. But just incase I will check with an accountant/lawyer. thanks for the input

mngrassguy
07-26-2008, 09:10 PM
The only thing i see is you will have to pay property tax on your equipment for this year. that is the way it is in TN anyway. You might want to get you business lic. Jan. 2nd to avoid this

Jason

You have to pay property tax on your equipment? Never herd of that. That would suck. Glad I don't live in TN. I wonder if any other states do that. How much is it?

bohiaa
07-26-2008, 10:52 PM
be carefull doing this, it's NOT a good ideal, you can only claim a loss for 3 years.

there used to be a "START UP" type tax break, most people now purchase a lot of equiptment with in the 1st 3 yrs, showing, or rather trying to show a loss for the year.

quadracer_13
07-26-2008, 11:11 PM
what happens if you show a loss for more than three years?

bohiaa
07-27-2008, 09:33 AM
what happens if you show a loss for more than three years?

Woops sorry I was thinking about something else

moose203
07-27-2008, 11:54 AM
You have to pay property tax on your equipment? Never herd of that. That would suck. Glad I don't live in TN. I wonder if any other states do that. How much is it?

it is a percentage of your total business assets, any thing from your trucks and large equipment all the way down to hand tools. different assets have different tax value. your business licence renewal from year to year depends on your assets. 100,000.00 in assets on average will will be around 350.00 renewal for the following year. depreciated value and other factors come into play. if you don't buy any new equipment from year to year your renewal will be less from year to year. Hope this helps a little. one more thing also we don't have a state income tax ether

Jason

lawnwizards
07-27-2008, 11:56 AM
what happens if you show a loss for more than three years?

from what i gathered, you can only show a loss 3 out of the first 5 years. anymore than that and the IRS considers what you are doing a hobby.

quadracer_13
07-27-2008, 03:57 PM
well thats dumb but i dont plan on bein in the hole anyways so i think i will be ok but thanks for the input guys i appreciate it.

CrewKut
07-30-2008, 03:33 AM
well thats dumb but i dont plan on bein in the hole anyways so i think i will be ok but thanks for the input guys i appreciate it.

That right there is the catch. No one plans on being in the hole, yet many end up that way for various reasons.

Have a good plan with reasonable goals. Then stick to it. If you have to reevaluate and adapt along the way, then do so, as long as your goal are being met. Try not to lose focus of where you want to end up. Good luck.

Dan

topsites
07-31-2008, 01:45 AM
You have to pay property tax on your equipment? Never herd of that. That would suck. Glad I don't live in TN. I wonder if any other states do that. How much is it?

Never bothered me too much, in terms of taxes it comes off federal as a deduction
then turn around and pay a little of that to the county, how it works it's just money
changing hands as usual. :p

Here Joe, take this $50 and give it to Mike so that he can pay Lee who in turn is going
shopping at Bob's who is my customer who will likely pay me again with it...

It's not that much but Virginia does it, too.
Too bad we have to work for it.