View Single Post
Old 09-28-2013, 12:28 AM
Roger Roger is offline
LawnSite Fanatic
Join Date: Dec 1999
Location: McMurray, PA
Posts: 5,891
You need to report it all for taxing purposes. The $1,700 is gross income, but you have many expenses that will offset most of this, leaving you with far less net income. All the items you listed are "expenses," but there may be many more you are unaware. This is why an Accountant who is skilled in tax law is of great help to you. He/She can explain what expenses are permitted, what is not permitted. Your tax burden is based upon the net income, so you want to find as many expenses as possible for minimum taxes. Yes, you need your receipts to justify expense in the event of audit.

Also, you will need to file Estimated payments. Again, the Accountant can help you through what minimum tax payments need to be made while the season is in progress. Your final tax calculation will be done after Jan 1, 2014, when you have all your income, all you expenses, and what you have already paid during the year. This is known as reconciliation -- that is matching your estimated taxes, against the actual taxes, and finding the difference (either added payments, or refund).

I strongly advise you to work with a financial management software, such as QuickBooks. QB will enable you to track each customer, prepare invoices, manage your bank account and credit card account. It will permit you to prepare the necessary reports needed for the Accountant to do final tax preparation.

You don't say how you are paying your helper. Are you paying taxes on his behalf? Do you have a payroll system established, or farming this out to somebody else?
Reply With Quote
Page generated in 0.03334 seconds with 8 queries