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net / gross tax income question

Discussion in 'General Industry Discussions' started by PORTER 05, Feb 28, 2009.

  1. TMlawncare

    TMlawncare LawnSite Bronze Member
    Posts: 1,197

    Usually your net income is before you pay your taxes. So if you did 100k gross and all your expenses totaled 70%. Your net income would be 30k. The 30k is also what you will pay Federal, State and self employment taxes on.
     
  2. FYS777

    FYS777 LawnSite Silver Member
    Posts: 2,305

    the other way around, time I take out state feds, tax and the other. I get around 50% within a couple %.
     
    Last edited: Mar 1, 2009
  3. TMlawncare

    TMlawncare LawnSite Bronze Member
    Posts: 1,197

    That might be the way your doing it but your wrong. Your net income does not include taxes. You can not write your own taxes off can you? If you pay quarterly tax vouchers you apply them at tax time on your net income. The only taxes you can write off are payroll taxes.
    In the eyes of the goverment, personal taxes are not an tax deductible expense. Therefore they can't be considered a business expense either.
     
  4. FYS777

    FYS777 LawnSite Silver Member
    Posts: 2,305

    I know that, I guess I should have said, after all exp. and pay tax is calculated, my net is some were around 68% and because I profit that much I owe state and fed so much, I took that off, 48 to 50% is actually mine.
     
  5. grasschopperofchicago

    grasschopperofchicago LawnSite Member
    Posts: 152

    I run about 50-52% net of gross pretax, definition of net can vary depending on what you are figuring...if I gross sales $280,000 my gross profit after expenses is about $144,000 and then pay taxes on that amount....
     
    Last edited: Mar 2, 2009
  6. FYS777

    FYS777 LawnSite Silver Member
    Posts: 2,305

    thats good, you have to make a good percent, :clapping::clapping::clapping: called efficiency, and planing well
     
  7. grasschopperofchicago

    grasschopperofchicago LawnSite Member
    Posts: 152

    2 New Dixie Choppers spanked me!---couldn't pass up the 0% financing for 3.5 years!!
     
  8. PORTER 05

    PORTER 05 LawnSite Senior Member
    Posts: 642

    ya i did 37% after i paid my state/fed tax.
     
  9. ExtExc

    ExtExc LawnSite Member
    Posts: 204

    so to K.I.S.S. for everyone, and for future reference, lets use these terms.

    Gross Sales
    Net Sales
    Gross income
    Net income


    :)
     

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