I need help!!!

Discussion in 'Starting a Lawn Care Business' started by LawnBoy89, Aug 21, 2007.

  1. LawnBoy89

    LawnBoy89 LawnSite Senior Member
    Posts: 967

    Right now I'm 18 I'm up to over 50 lawns a couple (BIG) commercial ones which pay me from the business by check which is starting to get me nervous. Anyways I'll get to the point, I'm not paying taxes, I want to start but I don't know how. I have two trucks, one is paid for the other I financed but it's in my dads name because as far as the state knows, I don't make any money. I don't really know what to do right now whether I just set up a business account at the bank or what I have to do. I get paid alot of cash and I also get alot of checks which get made out to either my name or to cash. I know alot of you guys could help me out since you've been through this already....thanks alot....I need help before the IRS comes after me!
  2. KrayzKajun

    KrayzKajun LawnSite Fanatic
    Posts: 10,742

    Get a business lawyer! and a CPA
  3. P.Services

    P.Services LawnSite Fanatic
    Posts: 6,322

    go get register as a sole proprietorship ans pay tax on the checks and don't say a word about the cash no need for a lawyer. just get a name registered
  4. Sweet Tater

    Sweet Tater LawnSite Silver Member
    Posts: 2,123

  5. MV Property Care

    MV Property Care LawnSite Member
    Posts: 169

    First thing go to your bank and open a basic business account. " Bill Smith lawn service" If you have your name in the title of the checking account it's a lot easier. You can always change and get a fancy name but do this now. Then you can cash your checks.

    Second save all reciepts that pertain to your business. (gas reciepts, service on your trucks receipts, anything you buy-oil, string, safety glasses, etc. ). It all adds up at the end of the year.

    Third. Keep a log book of your customers( the ones you want to claim) and all the milage you drive. If you ever get audited this will look very good on your part. You should consider billing your customers or at least give them a receipt. This will come as your business gets bigger.

    Forth. This is the easy part. You are trying to be honest but things just started to fast. This is a good problem. Make an appointment with a small tax accountant. Not a franchise like H R block. You will be legal if you pay the taxes at the end of the year. The state likes the sales tax to be paid quartley but you didn't know. Not that big of a deal. Next year or if you can find your states web site you can register online as a sole properpriorter and have it taken out of your checking account for this quarter and the last quarter.

    Last thing most important. Save money for any tax surprises. When your self employed you have to pay your own taxes remember. I wouldn't try to make cash and not pay taxes but you might be in a situation where it's better not to mention all the cash your recieving. The biggest mistake is not paying taxes.

    Next year go to a insurance broker and get liability insurance. It's pretty cheap. Around $300.00 for six months for $400.000 liability. And I was told I was paying way too much, so shop around.

    Hope your business thrives next year.
  6. LawnBoy89

    LawnBoy89 LawnSite Senior Member
    Posts: 967

    I guess the part I am not understanding is at the end of the year how do I know how much I need to pay for taxes? Does the state send me a bill or something. Do you guys charge extra sales tax? Example: I will cut your lawn for $40 so you send them a bill for $40 plus sales tax somwhere around $42.50? Thanks alot you guys are a great help

    MV Property Care thanks alot for the info helped alot.
  7. MV Property Care

    MV Property Care LawnSite Member
    Posts: 169

    There is sales tax which in my state is 6 percent and there is income tax which is why I say save your money and your receipts. There is also social security you have to contributed a little. But all that stuff is for your tax accountant to figure.

    You will know how much your sales tax is my mutliplying 6 percent by your bill. If you charge people $40.00 I wouldn't raise it this year to reflect that your now charging sales tax. For your records it could be $37.74 price of mow plus sales tax. Keep track of all your sales tax and that directly goes to your state.

    Income tax is another story. I am no expert so I let my tax accountant do it. Basicly anything that costs you to do business can be deducted at the end of the year. Also your mileage you drive and if you buy a new truck or mower those items can be decucted over a period of years (depreciation). But that is stuff for your tax guy to figure out.

    Remember Keep it Simple.

    Your state gets all your sales tax, you will be ok if you pay it at the end of the year just make sure you have it.

    Save all receipts and keep a log book for milage for deductions so you can pay your income taxes.

    find a tax account that you can trust.

    Save money for surprises. This is a learning curve you will know a lot more next year etc.
  8. Albery's Lawn & Tractor

    Albery's Lawn & Tractor LawnSite Bronze Member
    Posts: 1,674

    Your accountant will tell you how much but remember if you wait and pay at the end of the year instead of quarterly you will have to pay a few penality's which won't be cheap.
  9. martinfan06

    martinfan06 LawnSite Senior Member
    Posts: 631

    Also if your getting a company processed check from comm. act you will be 1099"d at the end of the year. Basiclly that company reports how much they paid you for services rendered to the IRS so they claim the tax break off of that what they paid you. And it will come at you maybe not right away mine took almost 2 years they came after me and I owed almost 2,000$:cry:,so be careful.
  10. GLLawns

    GLLawns LawnSite Member
    Posts: 132

    Go to an accountant and get things straightened out now. They will come after you and you will not be happy with the outcome. Also get some software like Quickbooks Pro, it will save you a ton of hassle and most accountants will help you get started setting it up. The nice thing is at the end of the year you click on an option that will print up a report of all your expenses, profits, and other neccessary info for your accountant.

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