Tax Question

Discussion in 'Business Operations' started by BBallkid42, Jan 17, 2012.

  1. BBallkid42

    BBallkid42 LawnSite Member
    Posts: 118

    I am an established company here in my hometown and just became a legal business that pays taxes and everything. How do you guys go about paying taxes? Do you receive a bill for the taxes you owe or do you just budget what you will have to pay? I'm all very new at this I need as much tax advice as I can get thanks.
     
  2. weeze

    weeze LawnSite Fanatic
    Posts: 7,811

    i use turbo tax for small business.
     
  3. BBallkid42

    BBallkid42 LawnSite Member
    Posts: 118

    So even with that do you pay taxes with each paycheck or once a year or what? And what percentage of your paycheck will go to your taxes? Trying to find out how much in taxes I will pay personally and that the business will pay after tax write-offs.
     
  4. Hughes Landscaping

    Hughes Landscaping LawnSite Member
    Posts: 79

    BBallkid,
    It really just depends on the amount of sales you expect to do per calendar year. At the end of the year, you should get a CPA to look over your books to determine the best way to handle. We paid quarterly taxes in 2010, but we ended up getting a big refund after the CPA did our taxes because of depreciation. We have since switched to paying taxes at the end of the year. Also, if you have your vehicle in your personal name, be sure to keep a mileage log because you can write off the mileage you drove for work.

    Unless you are pretty savy with all the tax laws, I would not risk doing your own taxes. You will likely miss some pretty substantial write offs such as depreciation, utilities from home office use, etc...
     
  5. BBallkid42

    BBallkid42 LawnSite Member
    Posts: 118

    How much was the CPA's fee to do your taxes for you and was that less than what you got as a refund? Could you tell me how much or what percentage of profit went to taxes for you? If it would help you help me I had a gross income right around $10,000 last year (small income I know but I'm in college trying to become legal)
     
  6. Hughes Landscaping

    Hughes Landscaping LawnSite Member
    Posts: 79

    I paid the CPA $450 which included both LLC and personal returns. If you are making $10K per year you will likely pay very little taxes because of depreciation and mileage.

    If you have a "home office" you can write off part of your home utilities, part of your HOA dues, cell phones, uniforms and boots, mower parts and service...all the expenses comes off the bottom line.
    Oh yea, your CPA bills are written off too.
     
  7. weeze

    weeze LawnSite Fanatic
    Posts: 7,811

    if you are pretty small you can use turbo tax for small business or something but as you grow things get more complicated you probably want to use a cpa and make quarterly payments. alot of it depends on your write offs. things you bought for your business, mileage driven, etc. all of that is subtracted from your gross income making your income less and your taxes less. turbo tax or similar things walk you through the process. either way you have to pay money to turbo tax or a cpa. turbo tax will be cheaper but if your business gets too big it will not work as well for you.
     
  8. BBallkid42

    BBallkid42 LawnSite Member
    Posts: 118

    Ok I get that from the business view now but I have to write myself personal checks from the business so how much should I expect to pay in taxes for a paycheck? Is it a percentage or what? Just for example say I would pay myself $400 every 2 weeks how much should I expect to pay in taxes and with that would I just budget money to taxes with a paycheck until a quarterly payment would be due?
     
  9. weeze

    weeze LawnSite Fanatic
    Posts: 7,811

    well i'm not at that point yet. my personal and business accounts are the same one. i save as much money as i can all year long so i have more than enough to pay any taxes at the end of the year. quarterly payments would make it even easier to keep up with. the amount of taxes will vary depending on what state you live in, how many people you are claiming, and other factors. i worked a part time side job last year before mowing season started and made $1060..i claimed zero and i paid $175 in taxes if you count federal, state, medicare, social security. a little less than 20%.

    i would say save 20% for taxes just to be safe. so on $400 save $75-$80 for taxes.
     
  10. MOW ED

    MOW ED LawnSite Fanatic
    Posts: 5,028

    I don't know about Kentucky but we have to pay sales tax on most lawn care services in Wisconsin. The state has a website that I put in total sales and it gives me the total I owe. I collect sales tax from all customers and submit an electronic payment to the state monthly.
    My federal tax return also deducts what I owe to the feds every April. No I never get a refund, I ALWAYS pay and pay alot.

    Check with an accountant/tax guy, not H and R Block either.
     

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