Tax question for the solo guys/gals

Discussion in 'Business Operations' started by Outsiders Lawn Artists, Oct 5, 2004.

  1. Outsiders Lawn Artists

    Outsiders Lawn Artists LawnSite Member
    Posts: 14

    i'm very new to the lawn care industry. i have just started my own co. and I was wondering what it the best way to do my taxes? I know that sound a little broad, does everyone file quarterly or cash only or 1040, ect. What is to stop everyone who starts out from not claiming immediate income, or just wait? Thanks
     
  2. PLM-1

    PLM-1 LawnSite Bronze Member
    Posts: 1,640

    I'm wondering the same thing...help us out guys!
     
  3. eruuska

    eruuska LawnSite Senior Member
    Posts: 454

    I AM NOT AN ACCOUNTANT. FOR OFFICIAL INFORMATION, PLEASE TALK TO AN ACCOUNTANT.

    That being said, I don't believe there is any requirement to file quarterly. Just set x% aside in a separate account. You'll need to set aside about 15% for the self-employment tax. Depending on what state you're in, you'll need to set some aside for state income tax. And a certain percentage needs to be set aside for federal income tax. That depends on what bracket you're in.
    If you know anyone who does payroll, they'll be able to get you in the right ball park.

    And when it comes time to do your taxes, get them done as early as possible. That way, if you get bad news about what you owe, you've got a couple of months to get the money together. Or flee to Mexico. Whichever you choose. (Is it true that LCO's in Mexico will hire illegal Americans?)

    But the best advice it to talk to an accountant.

    Hope this helps,
    Eric
     
  4. HOOLIE

    HOOLIE LawnSite Gold Member
    Posts: 3,981

    You are supposed to pay quarterly for federal taxes. I believe the rule is, if you expect to owe more than $1000 for the year (don't quote me on that number), they want you to pay quarterly. Payments are due Jan 15, April 15, June 15 and Sept 15. The IRS will send you the payment vouchers or you can download them (or hire an accountant)

    Of course, the IRS doesn't know when you have just started your business. I consulted with an accountant my first year, he advised me to just pay my taxes in full on April 15, then start with the quarterly payments next season (now the IRS knows you're in business).

    Best thing is really to hire an accountant, or set up a consultation with one.
     
  5. Team Gopher

    Team Gopher LawnSite Platinum Member
    from -
    Posts: 4,041

    Hi Outsiders Lawn Artists,

    Hoolie has some great advice
    It shouldn't cost you much at all and will help you start on solid footing.
     
  6. Turf Medic

    Turf Medic LawnSite Bronze Member
    Posts: 1,073

    Definitely contact a tax professional for the straight scoop. I do believe the law states that if you must have at least 90% of your taxes paid by Dec 31 or you are subject to penalties and interest. However if you have a fulltime job or your wife works fulltime and you usually get a tax refund, you might be ok.

    Found this on the IRS website.

    9.5 Estimated Tax: Penalty Questions

    What is the minimum amount of estimated tax that I am required to pay without incurring any penalty or interest charges?

    In general, you may owe a penalty for 2003 if the total of your withholding and estimated tax payments did not equal at least the smaller of:

    90% of your 2003 tax (current year tax), or
    100% of your 2002 tax (prior year tax). (Your 2002 tax return must cover a 12-month period.) Your 2003 tax, for this purpose, is your Total tax for 2003. There are special rules for farmers and fishermen, and for certain higher income taxpayers.

    Generally, you do not have to pay an underpayment penalty if either of the following conditions apply:

    Your total tax is less than $1,000, (less withholding and credits) or
    You had no tax liability last year.
     

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