1. bare's landscaping

    bare's landscaping LawnSite Member
    Posts: 1

    My husband just started his landscaping business about 6 months ago. We talked to an accountant about what we need to do for our taxes and with the forms he gave me we owe thousands of dollars. However I was talking to a couple of acquaintances of mine who own small businesses and they explained that since this is a service business and not sales that we shouldn't have to file monthly taxes only quarterly taxes and that for the first two years we should be able to claim a loss. I am now uncertain what to do concerning our taxes. Please help.
     
  2. topsites

    topsites LawnSite Fanatic
    Posts: 21,654

    your friend is correct, take this exact problem to that same accountant and explain things like you just did here.

    Most likely he will set things straight and you will owe about the usual on your income.

    And if not then ur acc'tant sux and u should get a new one lol
     
  3. PMLAWN

    PMLAWN LawnSite Gold Member
    Posts: 3,535

    Does AZ charge tax on services. some states are starting to do that.
     
  4. Roger

    Roger LawnSite Fanatic
    Posts: 5,917

    Whether your state requires monthly or quarterly tax filings will probably depend upon the amount of income, not the kind of business. It sounds like you have not had detailed, open discussions with your accountant about the business. If he/she does not know the state rules about filing, then you need to find another one, quick.

    Be sure you are clear about what taxes are involved. You have at least three taxes to consider, (1) Federal Income, (2) State income - if your state as an income tax, (3) Sales tax - if your state requires you to collect tax on your services. If the answer to (3) is yes, then most likely you need to apply for a license to collect the sales tax. Again, your accountant should have all this information at his/her fingertips, and if not, then more the reason to find somebody else. That is not necessarily a strike against the accountant. The expertise may be elsewhere. He/She may not deal with small businesses, and am not familiar. In your selection of an accountant, the matter of familiarity with small business, service oriented, should be a critical criteria.

    Oh yes, there may be a fourth tax, a local municipality earned income tax.
     
  5. daveintoledo

    daveintoledo LawnSite Silver Member
    Posts: 2,587

    all states are different, ohio mowing, landscaping, snowremoval, all need a vendors license and collect sales tax on if you make over 5000, id check with the accountant again, and listen to them not some one who MIGHT know.....
     
  6. PMLAWN

    PMLAWN LawnSite Gold Member
    Posts: 3,535

    Well yes you can claim a loss--IF you lost money, but you need to have all the facts to show that-- If you are asking all these questions and are unsure of what you should be doing all year, I would suggest you not only sit with your accountant to figure this year, but plan what you need to be doing and what records you need to be keeping from Jan 1 on, so next year you will be ready. also set up the payments that you need to make.
    And Roger is right, Make sure you accountant is set up to deal with small business accounting.
     
  7. Novaowner

    Novaowner LawnSite Member
    Posts: 70

    Can't you depreciate your equipment when you first begin your business over a period of time? I haven't looked into it yet, still working hard to get my business ready for spring.
     
  8. daveintoledo

    daveintoledo LawnSite Silver Member
    Posts: 2,587

    it depends on the situation, sometimes its better to have the depreciation all at once, somethimes its better over time...but that is only a small part of it.... equipment, gas, milage, advertising, even your prescriptions can be deductable.... a good accountant will easily quide you though this......
     

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