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Making $30k the First Year mmmm.......

Discussion in 'Starting a Lawn Care Business' started by kebrowns, Nov 8, 2012.

  1. White Gardens

    White Gardens LawnSite Fanatic
    Posts: 6,783

    Don't forget meals and entertainment expenses along with advertising/promotion.

    I think Cell phones are now a 100% deduction too. They change the rule on that and we used to only deduct a certain percentage, but I'm pretty sure the gov't will allow you to write off the whole thing now.

    I like going out to dinner when it's business related, I can actually justify spending the money to go out and eat knowing I can ride it off on my taxes.;)

    Here's another thing to consider also when comparing gross to net.

    You might Net a certain amount, but if you look at the personal deductions, your actual Net is probably way better.

    What I'm saying is that you get to deduct cell phones, office space, computers, gas, insurance, etc.... and if you had a job where you were paid by someone else, then you pay those expenses out of pocket.

    So, if you Net 30k in a year, it's probably more comparable to someone who makes 45k-50k a year with a "real" job.

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  2. kynobi

    kynobi LawnSite Member
    Posts: 23

    Excellent points. I definitely need some professional input on the accounting side. The mower, trimmer, blower, and hedge trimmer were all purchased new this year, but I do have an office space set up in my house and use a computer that I already owned. I also use an SUV that I already owned but maybe there are some write-offs in those and other items. Thanks a bunch.
     
  3. White Gardens

    White Gardens LawnSite Fanatic
    Posts: 6,783

    Yes, definitively have an accountant help you out at least if you don't have them actually file your taxes.

    If you use your SUV for both personal and business, then you would deduct the percentage of use for the business, either by mileage compensation, or the total cost to operate it each year. Basically whichever is bigger.

    My smaller truck usually gets more miles than maintenance a year, so I deduct the mileage. And generally it gets used for 90% business related activities. Most of the time we use my wife's car for personal things.

    My Dump truck generally gets more repairs and fuel, so I deduct the expenses.

    But again, do get professional advice from an accountant.

    Also, get a good accounting program such as quick-books. Makes keeping track of ALL your expenses a breeze when you keep up with the register.



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  4. Landscape Poet

    Landscape Poet LawnSite Gold Member
    Posts: 3,637

    Deducting your mileage is huge, last year half the year the mileage rate was 0.55 cents a mile. Mileage deduction almost always outweighs the average cost.

    And White you are correct in essentially considering your write offs as a benefits package.
     
  5. Patriot Services

    Patriot Services LawnSite Fanatic
    Posts: 12,441

    Just remember you can't take mileage and maint deductions on the vehicle. Its one or the other. Also once you swith to itemized vehicle deductions you can't go back to mileage.
    Posted via Mobile Device
     
  6. Landscape Poet

    Landscape Poet LawnSite Gold Member
    Posts: 3,637

    Yep, learned that last year as I have always tracked both thinking it would come in handy as one year my true cost would outweigh my mileage. My CPA informed me that the mileage was still my best bet even though I had to have a computer replaced, a new set of tires, brakes etc on top of regular oil changes etc. Like I said it was fine as it still worked out better for the mileage even after all that.

    Last year was a little silly though. I do not track my mileage by month, not sure about you guys, but the fed gave the old rate of .50 for mile for certain dates and the new .55 rate for mile the remainder of the year.
     
  7. caseysmowing

    caseysmowing LawnSite Bronze Member
    Posts: 1,849

    I think you can easily gross 30k your first year but profit 30k is possible but you would have to be in the right market with very low overhead and bust your ass. I'm will be finishing up my first PT year in mid Dec and I think I'm going to be at around 25-30k gross. Profit negative alot because of the amount of equipment I've bought. But I'm happy with where I'm at.
     
  8. caseysmowing

    caseysmowing LawnSite Bronze Member
    Posts: 1,849

    Question: Mileage VS Expense You can't switch back and forth, so can you have one on mileage and one on expense or do they both have to be the same? Thanks I didn't know you couldn't switch them from year to year.
     
  9. Patriot Services

    Patriot Services LawnSite Fanatic
    Posts: 12,441

    Both have to be the same. Unless you are operating 2 completely different companies.
    Posted via Mobile Device
     
  10. caseysmowing

    caseysmowing LawnSite Bronze Member
    Posts: 1,849

    Ok Thank you!!!
     

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