Filing Taxes

Discussion in 'Starting a Lawn Care Business' started by barefootlawns, Feb 16, 2006.

  1. barefootlawns

    barefootlawns LawnSite Member
    Posts: 60

    OK this is the first time that i have has to file taxes on my busness. I held out approx. 12% from each quarter but this isnt enough to pay Federal and State so now i am having to pay out of pocket, Which isnt that bad but i would like to know what i can do to prevent this from happening? I know that holding out more money each quarter would work but i ould like o get more indepth in it? Any advice would help alot
  2. Green-Pro

    Green-Pro LawnSite Bronze Member
    Posts: 1,420

    Get a good CPA, a good one will be worth his weight in gold. He will set up a quarterly estimate for you based upon last years numbers. He should also set you up on a depreciation schedule in regards to equipment purchases.

    We use Quickbooks to keep track of financials and just take a flash drive backup of end of year books for him to run through. Like I said a good one is worth his weight in gold IMO, for advice and tax purposes.
  3. Roger

    Roger LawnSite Fanatic
    Posts: 5,923

    What Green-Pro said about the CPA ...
  4. MMLawn

    MMLawn LawnSite Gold Member
    Posts: 3,569

    First, you shouldn't be just "holding" out the taxes. As a self-employed indiv, you are REQUIRED by Law to be filing and paying the taxes and FICA on yourself each Quarter. As this was your first year and you really didn't have an established income basis the IRS won't really say anything about not filing the Q'lys last year, but you can bank on it they will this year. A very good rule of thumb for a Sole Prop is that you will be paying 25% of that income, or double what you held out. But as was said you need a good CPA to guide you. NOT an accountant, but a licensed and trained CPA.
  5. barefootlawns

    barefootlawns LawnSite Member
    Posts: 60

    Ok thanks i will be contacting a CPA ASAP but for now how do I set it up to pay each quarter. This is starting to make me not want to do this but I really love this and dont want to give it up. I realize that this is only a small problem but it could compound if the IRS gets involved
  6. Green-Pro

    Green-Pro LawnSite Bronze Member
    Posts: 1,420

    When you contact a CPA and set up a meeting with him he should take care of or guide you through everything you will need to do to pay quarterly estimates. Also as Mike pointed out you are required to pay quarterly taxes, to not do this could incur a penalty, just an FYI in the event the IRS does require a penalty at tax time. CPA will advise you on all of this, waste no time and ask around/check references for a good CPA.
  7. dmlandcare

    dmlandcare LawnSite Member
    Posts: 28

    You might spend a little money on the CPA, but it will be worth it. Ask friends and family if they know a CPA, chances are someone does. My CPA is one of my fathers friends sister, she is taking care of everything we need. Try to find one that will do an initial consultation for free, see what they offer and what they can do for you. Obtaining a CPA will probably save you alot of money & headaches in the long run. Taxes can get very confusing.
  8. barefootlawns

    barefootlawns LawnSite Member
    Posts: 60

    I will be asking every one i know about a CPA thanks for all the help i would be lost with out it

    PMLAWN LawnSite Gold Member
    Posts: 3,535

    This is not a small problem- IRS has big teeth. and they WILL bite. (ask Al Capone). This is what people talk about when they say "know your costs and charge for them" this is overhead. I am sure that you will pay a penalty this year or at least interest on the missed payments but make the call Friday morn. to the CPA. You may get lucky and he will find many deductions to offset the income. Many are shocked on how little they really make but in this instance it will be a good thing.

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