No More Scrubbin' - I am Legit - Taxes!?

Discussion in 'Business Operations' started by Hannah Lawn Service, Jun 9, 2005.

  1. Hannah Lawn Service

    Hannah Lawn Service LawnSite Member
    from Jax. Fl
    Posts: 14

    I started out mowing lawns for 25.00 with a 21' Murray :dizzy: . After coming to this site and realizing that I would never prosper on these rates and how awful scrubs are I quickly organized. I am proud to say I have a license now and even a good ol tax id from Uncle Sam. I just bought an Exmark 36' and I can't believe the difference. :)

    Anyway, I have a guy that will work for me for the summer and I have questions. Is this guy a contractor or do I need to pay Federal tax on him. Do you guys attempt to do the tax part yourself or just pay a CPA? If so how much does a CPA usually charge? I would like to save this expense but at the same time I don't want to mess up with the IRS.

    Thanks for all your help!
     
  2. R&R LawnService

    R&R LawnService LawnSite Member
    Posts: 18

    Your new helper will be an employee not a contractor. CPA will very in price depending on how much of a pita your records are in. The best thing to do is get a version of quick books and then give a cd copy to your CPA.
     
  3. SCAG POWER

    SCAG POWER LawnSite Senior Member
    Posts: 343

    Higher him as a 1099 person, it will save you in the long run. But there are some different rules if you do this.
     
  4. chefdrp

    chefdrp LawnSite Bronze Member
    Posts: 1,384

    good for you. Congrats. It must feel good to be legit now.
     
  5. jason1978

    jason1978 LawnSite Member
    Posts: 45

    So how much are you charging now? Did you stay at 25.00 or move up in price?
     
  6. lawnman_scott

    lawnman_scott LawnSite Fanatic
    Posts: 7,547

    He is an employee. Just do the taxes yourself, its simple if you can operate a calculator. Go to irs webiste. irs.gov i think and get publication 15. It takes about 2 minutes to figure out a check, and send in the deductions 4 times a year. If money is an issue I would say your throwing it away if you dont do it yourself.
     
  7. Hannah Lawn Service

    Hannah Lawn Service LawnSite Member
    from Jax. Fl
    Posts: 14

    I kept the set price for exisiting customers. However, for new customers I now bid consistent with the knowledge learned on this website. I like the dollar a minute principle I read somewhere.

    I found IRS also has some educational CDs they send for free to help with a new business. I pulled the 15-E IRS form - good tip to read this.

    Thanks you all.
     
  8. Tvov

    Tvov LawnSite Bronze Member
    from CT
    Posts: 1,157

    Along with what R+R said, use a known accounting program such as QuickBooks, QuickBooksPro, Peachtree, etc. The "Pro" for Quickbooks means it can handle paying employees, including keeping track of IRS and state info, also has updates (which you pay extra for) available on the internet. The accounting programs are not hard to learn, and will save you a fortune in fees for the accountant. The landscaping specific programs work fine too (and are, well, specific to what we do!), you just may want to review them with the accountant so he/she knows about it.

    With employees, I definitely recommend using an accountant who knows small business. You don't need to use them weekly, they can just review your records and payments every quarter. You can do this by just emailing the info to them, simple and quick. Once you write the check, payroll is not your money, but the employee's income. I feel better knowing my accountant is reviewing my payroll.

    An employee is an employee. You can go the 1099 route, and as long as no one looks at your paperwork you will save a fortune! My accountant simply said "no" to doing that. The rules regarding 1099 / sub contractors have gotten strict and detailed over the years.
     
  9. tjgray

    tjgray LawnSite Senior Member
    Posts: 294

    While we are on the subject.....We have just recently starting paying our 17 year old son $7.00 an hour part-time to help his Dad. We have been paying him cash and it has only equaled to a couple of hundred or so. Since he is still our dependent it would be awesome if anyone could point me in the right direction on how I would handle any IRS issues *aside from irs.gov which is where I am going now :waving: *
     

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