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Expenses what can you write off?

Discussion in 'Lawn Mowing' started by turfcat75, Jan 15, 2001.

  1. turfcat75

    turfcat75 LawnSite Member
    Posts: 51

    Mikes landscaping service here from good ole upstate ny,
    I just started out 7 months ago on the books,i dont have an accountant yet,But i was just wondering what too expect on writing off expenses such as gas equiptment truck payments etc...say i spent 1,000 in gas last summer do i get that 1,000 back come tax time,also i hear if u finance a truck you only get a certain percentage of money back each year,and as far as commercial mower is it true you only get a certain percent of money back from equiptment like that?
    Fill me in guys i am pretty new!
  2. TGCummings

    TGCummings LawnSite Senior Member
    Posts: 773


    The most important thing to do would be to consult a tax professional. Get an accountant to do all your taxes for at least the first couple years then, if you feel more comfortable after that, get yourself some good computer software to track your finances and set up your taxes.

    This is not something you want to go into blind. Seek help! :)

  3. eggy

    eggy LawnSite Senior Member
    Posts: 947

    Mike I feel it is money well spent to see a CPA..find a local one..and talk to them.....a few dollars spent to do it write (taxes) can save you a few thousand later.
  4. kutnkru

    kutnkru LawnSite Silver Member
    Posts: 2,662

    First, consult with a certified public accountant. Then dont forget mileage and if your equipment is new he can help you with depreciation as well.

    Hope this helps,
  5. osc

    osc LawnSite Senior Member
    Posts: 502

    Gasoline is a write off or biz expense that comes right off the top. You can also apply to get the road taxes back from the state and fed on purchases from gas stations that go into off-road use. May be as much as 45-55 cents per gallon.
    Equipment you can take a capital expense all in one year ( up to 19 or 20 grand, whatever it is now)or you can depreciated it over time. A lease is 100% expensible
    but it really doesn't work out that well unless you've already spent the limit on capital expense. Once you spend the 20 grand, a lease becomes a good option for additional equipment. That would be a lot of equipment for a start up business.
    My advice is to take the expense all up front. Mowing equipment does not last long enough to enjoy the benefits of depreciation over time. If you mow real hard for 4 years you may have worn out your machines and have to buy new again. Depreciation just doesn't pack the punch you need starting out.
    Truck financing- I would stay away from this one unless you are knocking down some big bucks. You have to prove how what percentage of the truck was used for biz and personal. A lease on the other hand is 100% expensible as long as the vehicle is used 100% for business. The problem is that leasing is a very bad deal. Unless you make so much money that you just don't care, I would not lease. The best thing to do is buy a good used truck and do capital expense or depreciate.
    Office in your home- some people write off part of their mortgage and claim a room in their home is an office. They write off partial utilities etc.. Not the best deal when you look at the whole picture.
    All other legitimate expenses in the process of doing business are legal. Save your receipts and keep very good records. Find a great accountant and spend the 70 bucks or so for a tax planning session for your business. It will prove to be a great investment.

    Good Luck
  6. turfcat75

    turfcat75 LawnSite Member
    Posts: 51

    Thanks guys!That was a quick reply!
    Yes i am getting an accountant its our familys accountant,we have an appointment with him this month.
    i was just curious,i'm not new to the work,but new to the buisness part of it!
    Is it mandatory to tax the service?i live in NYS ,8%
    Just add 8% to the bill?
    Just curious
  7. Greenkeepers

    Greenkeepers LawnSite Senior Member
    from NE Ohio
    Posts: 695

    Hi welcome and hope that you get a lot of info here. I'm an accountant, I believe that you need to go and get yourself a good accountant to get you on the right track. Once you feel comfortable then you can take on the tasks yourself. But in your first years of business you'll have enough to worry about, you don't need an IRS auditor breathing down your neck.

    You have been misinformed by someone because you don't ever get "Money Back" from the IRS :) The expenses that you have mentioned are taken off of your sales to arrive at net income (loss) this is then transfered to your 1040 (assuming you're not incorporated).

    There are many ways to benefit your bottom line number, one being depreciation. But I would sugguest going to an accountant to better suite your needs.

    Good Luck....
  8. Skookum

    Skookum LawnSite Senior Member
    Posts: 675

    I think consulting an accountant or using one is fine, but from my own experience, I would reccomend doing as much as you can yourself. Become knowledged about it yourself as much as possible. In otherwords, do not totally rely on what a accountant tells you. There are just as bad of accountants as there are lawn mowers out there.

    Even if the accountant is a friend or family member, I would still be involved and double check them whenever you can. Just something to think about.
  9. kutnkru

    kutnkru LawnSite Silver Member
    Posts: 2,662

    We are considered tax exempt at the time of the purchase if we will be adding sales tax to the service and the product price is included therein (ie. fertilizer).

    When we do business with some of the local pits for topsoil, we pay the tax to them and not the customer because its easier for us in the long run (our choice).

    Hope this helps.

  10. mowerman90

    mowerman90 LawnSite Bronze Member
    Posts: 1,491

    Get yourself a good accountant!!! Then remember that it's not what you make - it's what you keep. You'll learn to save every receipt and I mean EVERY one. That package of tube socks you bought - write-off, that cordless phone for the house - write-off. Your cell phone, your wifes cell phone (she is your secretary isn't she?) Shoe laces for your work boots, are you starting to understand?

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