Paying taxes on business income

Discussion in 'Business Operations' started by stevenf, Apr 4, 2009.

  1. stevenf

    stevenf LawnSite Bronze Member
    Posts: 1,612

    For the past two years I have included everything as my income. This year im aiming for some commercial accounts and wanting to expand. I am going to start having a business account and start paying myself an hourly rate.
    Question: Do I pay income tax on untouched business income? Or is it considered a different tax bracket?
     
  2. topsites

    topsites LawnSite Fanatic
    Posts: 21,654

    I highly recommend you speak with an accountant.
     
  3. sweetz

    sweetz LawnSite Bronze Member
    Posts: 1,597

    I agree with top, weirdly enough, but I agree with him.
     
  4. Littleriver1

    Littleriver1 LawnSite Senior Member
    Posts: 811

    I'll add to my post count to, and say their correct. Find one that will help you hide your wealth well. Obama will be around to see you soon. I've heard he visits this site often.
     
  5. Richard Martin

    Richard Martin LawnSite Fanatic
    Posts: 14,700

    I believe that in order to do that, and have it mean anything to the IRS, you will have to become either an LLC or INC. As stated above, a tax professional can guide you in this.
     
  6. terrapro

    terrapro LawnSite Bronze Member
    Posts: 1,234

    No offense but this is the exact reason why alot of people should not be running a business. If you do not know the difference between business entities you probably shouldnt be in business. Please do yourself a favor and pick up a business book before you end up in prison for tax fraud. The IRS doesnt care if you didnt know any better.

    Assuming you are a sole proprietor, you can not collect an hourly pay even if you tried your hardest. It is already all yours, it is like taking money from your left pocket and putting it in the right(well whatever does not go to taxes that is).
     
  7. AI Inc

    AI Inc LawnSite Fanatic
    Posts: 25,233

    Thats the correct answer right there. Do it right , and do it now.
     
  8. hvphotog

    hvphotog LawnSite Senior Member
    Posts: 325

    Steve

    your business will pay taxes on the business profit based on anual earning and what you pay yourself personally you will have to pay persoanl taxes on minus any dependants and interest on your mortage and any other deductions that you may have. Now with the business you have many more deductions such as advertising, office running expenses and the list goes on.. Get in touch with an CPA and they will set you up in the righ direction. Even though you take a small salary you can pay your cell phone bill, truck bills, health beni's and much more through the business as a business expense keeping down the overall profit margin of the business..
     
  9. hvphotog

    hvphotog LawnSite Senior Member
    Posts: 325

    oh forgot to mention or ask actually, are you an LLC, Inc or DBA? LLC being the better of the 3 protecting against liability the best without having to form quaterly and yearly shareholder meeting notes that a Inc does... DBA's leave you open to many problems and less tax right offs
     
  10. lawnman_scott

    lawnman_scott LawnSite Fanatic
    Posts: 7,547

    I dont know if we are all high, but I agree will topsites too............ I am on cold meds so I am not thinking right.......
     

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