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BBallkid42
01-17-2012, 05:58 PM
I am an established company here in my hometown and just became a legal business that pays taxes and everything. How do you guys go about paying taxes? Do you receive a bill for the taxes you owe or do you just budget what you will have to pay? I'm all very new at this I need as much tax advice as I can get thanks.

weeze
01-17-2012, 06:02 PM
i use turbo tax for small business.

BBallkid42
01-17-2012, 06:08 PM
So even with that do you pay taxes with each paycheck or once a year or what? And what percentage of your paycheck will go to your taxes? Trying to find out how much in taxes I will pay personally and that the business will pay after tax write-offs.

Hughes Landscaping
01-17-2012, 06:09 PM
BBallkid,
It really just depends on the amount of sales you expect to do per calendar year. At the end of the year, you should get a CPA to look over your books to determine the best way to handle. We paid quarterly taxes in 2010, but we ended up getting a big refund after the CPA did our taxes because of depreciation. We have since switched to paying taxes at the end of the year. Also, if you have your vehicle in your personal name, be sure to keep a mileage log because you can write off the mileage you drove for work.

Unless you are pretty savy with all the tax laws, I would not risk doing your own taxes. You will likely miss some pretty substantial write offs such as depreciation, utilities from home office use, etc...

BBallkid42
01-17-2012, 06:12 PM
BBallkid,
It really just depends on the amount of sales you expect to do per calendar year. At the end of the year, you should get a CPA to look over your books to determine the best way to handle. We paid quarterly taxes in 2010, but we ended up getting a big refund after the CPA did our taxes because of depreciation. We have since switched to paying taxes at the end of the year. Also, if you have your vehicle in your personal name, be sure to keep a mileage log because you can write off the mileage you drove for work.

Unless you are pretty savy with all the tax laws, I would not risk doing your own taxes. You will likely miss some pretty substantial write offs such as depreciation, utilities from home office use, etc...

How much was the CPA's fee to do your taxes for you and was that less than what you got as a refund? Could you tell me how much or what percentage of profit went to taxes for you? If it would help you help me I had a gross income right around $10,000 last year (small income I know but I'm in college trying to become legal)

Hughes Landscaping
01-17-2012, 06:17 PM
I paid the CPA $450 which included both LLC and personal returns. If you are making $10K per year you will likely pay very little taxes because of depreciation and mileage.

If you have a "home office" you can write off part of your home utilities, part of your HOA dues, cell phones, uniforms and boots, mower parts and service...all the expenses comes off the bottom line.
Oh yea, your CPA bills are written off too.

weeze
01-17-2012, 06:19 PM
if you are pretty small you can use turbo tax for small business or something but as you grow things get more complicated you probably want to use a cpa and make quarterly payments. alot of it depends on your write offs. things you bought for your business, mileage driven, etc. all of that is subtracted from your gross income making your income less and your taxes less. turbo tax or similar things walk you through the process. either way you have to pay money to turbo tax or a cpa. turbo tax will be cheaper but if your business gets too big it will not work as well for you.

BBallkid42
01-17-2012, 06:24 PM
Ok I get that from the business view now but I have to write myself personal checks from the business so how much should I expect to pay in taxes for a paycheck? Is it a percentage or what? Just for example say I would pay myself $400 every 2 weeks how much should I expect to pay in taxes and with that would I just budget money to taxes with a paycheck until a quarterly payment would be due?

weeze
01-17-2012, 06:39 PM
well i'm not at that point yet. my personal and business accounts are the same one. i save as much money as i can all year long so i have more than enough to pay any taxes at the end of the year. quarterly payments would make it even easier to keep up with. the amount of taxes will vary depending on what state you live in, how many people you are claiming, and other factors. i worked a part time side job last year before mowing season started and made $1060..i claimed zero and i paid $175 in taxes if you count federal, state, medicare, social security. a little less than 20%.

i would say save 20% for taxes just to be safe. so on $400 save $75-$80 for taxes.

MOW ED
01-18-2012, 05:50 PM
I don't know about Kentucky but we have to pay sales tax on most lawn care services in Wisconsin. The state has a website that I put in total sales and it gives me the total I owe. I collect sales tax from all customers and submit an electronic payment to the state monthly.
My federal tax return also deducts what I owe to the feds every April. No I never get a refund, I ALWAYS pay and pay alot.

Check with an accountant/tax guy, not H and R Block either.

jvanvliet
01-18-2012, 05:55 PM
I would consult a CPA, we pay estimated taxes quarterly that are reconciled at the end of the year.

It's not wise to fool around with that stuff and you may not get the best advice here. Spring for the bucks and keep the IRS off your donkey..

weeze
01-18-2012, 06:23 PM
we don't have sales tax on lawn service in alabama. forgot to mention that.

Landscape Poet
01-18-2012, 06:50 PM
I would consult a CPA, we pay estimated taxes quarterly that are reconciled at the end of the year.

It's not wise to fool around with that stuff and you may not get the best advice here. Spring for the bucks and keep the IRS off your donkey..

This is the most solid advice you will get in this thread kid. A CPA will pay for themselves many times over because of things they will know to deduct etc that you do not know.

For example...did you run your business from your home? If so the percentage of your home will come into play to determine deductions. For example lets say you have a small office used EXCLUSIVELY for the business and you use the garage to store your equipment. The total % of that spaced based on your square footage of your home is equal to 15% of total square footage. You are now able to deduct 15% of you home phone line if it has been used for business, 15% of your rent/mortgage, 15% of you water bill, 15% electric bill, 15% of HOA dues.....what about your work clothes - they a cost don't they - write off......the CPA can assist you in finding out if it is better to take actual cost of your vehicle or the standard mileage deduction.
ALL in all I have a feeling if you are saying you made 10K when a CPA gets done with you they will show accurately that you did not make even close to as much as you think you made.

weeze
01-18-2012, 06:58 PM
this is true. anything you spent on your business gets subtracted from what you made for the year. this is how you come up with your earnings and this amount is what you are taxed on. the more deductions you can come up with the less you will be taxed. whatever is left after being taxed is your net earnings. you can pay throughout the year and you may get money back or have to pay a little at the end or you can just wait til the end and pay more. the amount you pay is the same. you can decide to spread it out over quarterly payments or pay it in one lump sum when you do your taxes.

grass-scapes
01-18-2012, 09:55 PM
an established business, but just now starting to pay taxes.....Hmmmm. Hope the IRS doesn't read this thread. You could end up owing a lot in back taxes and penalties.

GreenI.A.
01-19-2012, 11:26 PM
an established business, but just now starting to pay taxes.....Hmmmm. Hope the IRS doesn't read this thread. You could end up owing a lot in back taxes and penalties.

I was thinking the same thing

Landscape Poet
01-20-2012, 09:01 AM
Come on guys - do you really think the IRS is sitting around reading lawn threads? Give the kid a break, at least he is heading in the right direction now.

FLC2000
01-20-2012, 09:25 AM
Get a cpa!

wbw
01-20-2012, 09:37 AM
an established business, but just now starting to pay taxes.....Hmmmm. Hope the IRS doesn't read this thread. You could end up owing a lot in back taxes and penalties.

Get real. The guy said he did 10k last year. He doesn't owe the IRS squat.

GreenI.A.
01-20-2012, 05:59 PM
Come on guys - do you really think the IRS is sitting around reading lawn threads? Give the kid a break, at least he is heading in the right direction now.

Get real. The guy said he did 10k last year. He doesn't owe the IRS squat.

How does he know what he owes or not if he hasn't done taxes? My thougts were more in regards to insurance, if he is established with clients and is just trying to figure out taxes, my bet is he hasn't figured out insurance yet either. But either way I don't care if someone is billing out only $500, you still file your taxes, chances are you won't need to pay, but you still file it

Fvstringpicker
01-20-2012, 09:57 PM
How much was the CPA's fee to do your taxes for you and was that less than what you got as a refund? Could you tell me how much or what percentage of profit went to taxes for you? If it would help you help me I had a gross income right around $10,000 last year (small income I know but I'm in college trying to become legal)

Can your parents claim you as a dependent? (a serious question)