Tax Question

Discussion in 'Business Operations' started by heygrassman, Mar 8, 2002.

  1. heygrassman

    heygrassman LawnSite Senior Member
    Posts: 509

    1) If I purposely bid a job below cost in the attempt to get a job for the portfolio picture, can I reap tax benefits and how?? Marketing Exp?? looking creative but legal

    2) Same scenaio above and bid the job at cost. Am I able to recoup anything?

    I know there will be yelling but I need 2-3 maybe 4 landscaping jobs for my portfolio (that currently only has my yard in there.) This will not be common practice I need a few. From there I can show why I deserve the fair bid.

  2. Nebraska

    Nebraska LawnSite Senior Member
    Posts: 525

    Do you use an accountant?

    How comfortable would you be defending it in an audit should that happen?
  3. heygrassman

    heygrassman LawnSite Senior Member
    Posts: 509

    Yea.. I have an accountant but he is pretty untouchable until 4-16. I have a few I am looking at going after by the end of the month.

    I am not looking for IRS troubles. I would want any alternative to be pretty set in code.

  4. Nebraska

    Nebraska LawnSite Senior Member
    Posts: 525

    I don't know if this helps but I deduct the $ paid for referral as an advertising expense.
  5. LawnLad

    LawnLad LawnSite Senior Member
    Posts: 738

    Unfortunetly you can't write off opportunity cost. Otherwise we'd never pay taxes. Can you imagine... "Oh gee, I should have made another $500 on that job, so I'll just take that as an additional expense!". Gosh, this would be nice.

    What you can write off is the actual expense for the job. So if the job cost you $1500, and you bid it at $1200, you lost $300.00. So you got the write off... you lost $300.00.

    I thought about this a while back with respect to charity work. If we donate labor/equipment to Habitat for Humuanity - I'm loosing money by not working. All you can declare is your out of pocket expenses, which you'd have on a for profit job anyways. You just loose the revenue. In otherwords, it's an opportunity cost. It's like maintaining your mother's house. Got to do it... and it's a loss.
  6. BRL

    BRL LawnSite Bronze Member
    Posts: 1,211

    What? You don't charge Mom? ;)
  7. LawnLad

    LawnLad LawnSite Senior Member
    Posts: 738

    Okay I lied in my previous most... darn straight I charge her. Terms are net 10 days, 2%.
  8. Nebraska

    Nebraska LawnSite Senior Member
    Posts: 525

    I am curious about the opportunity versus "real" costs.. Where do you find more information about this?
    I ask because what if I had a friend of a friend that does a church for which the friend provides an invoice at the regular rate, they then provide a receipt that reflects the invoice and they write the full amount of as charitable contribution. The friends accountant say's it alright?
  9. Simple simple simple.

    "IF" you payed for material, you write those off correct?

    "IF" you pay employees, you write that off correct?

    "IF" you don't make any money on it, humm no taxes to be paid.

    So how do you get writing off the job, that has already been done.

    "IF" you don't make a profit off it, that's "your" fault, not the IRS.

    Do that job at whatever price for you portfolio.

    Next thing you need to do, is spend about $100 talking to an accountant.

    You just flunked Business 101.
  10. Well that's not the same as what we are discussing.

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