Originally Posted by clayslandscape
My accountant and I sat down today. I had total sales of roughly 85k and after overhead is taken out, I cleared about 35k. My accountant says I need to spend quite a bit before Dec. 31.
My question is, what do you guys spend end of the year money on typically? I don't have anything I really need besides a snow blower which I will get.
Do you all have to show that you did not have a profit each year in order for the taxes to not eat it up?
Before I give a detailed response, let me ask a few questions.
1. Is your business set up as a sole-proprietor where you business activity flows to Schedule C of your tax return?
2. Are you a married filing jointly taxpayer? If so, does your wife work? If so, please give the details of her income as this will have a large affect on the taxes you will pay on your profit.
3. Of the $35,000 of net profit showing, how much do you have sitting in the bank?
4. How much do you need for reserves to make it to next spring?
5. What are you goals for the business in the upcoming season and into the future?
I'll try to give a more thoughtful response after you answer these questions.