Want to go completely legit how to do it.

Discussion in 'Starting a Lawn Care Business' started by Rll131, Jul 7, 2013.

  1. Rll131

    Rll131 LawnSite Member
    Posts: 133

    I have about 15 accounts right now a 4x8 trailer snapper 36 pro wb echo blower trimmer and edger. All my accounts either pay me by check for the whole month or when I'm done the job they pay cash or check made out to me personally. I don't need a license for mowing in md , went to the courthouse also asked about needing a dba she said I only need one if I want the checks to bE made to a business name that I advertise with but all my customers just make it out to my personal name. Also haven't payed any taxes either. First year doing this on my own so please don't call me a low life or what not. Just need some advice on what to do first and how to properly bill my customers and get paid. Next year I will be going 100% at this I worked at a golf course for 4 years so I have a decent amount of experience but wanted to try this out first to see how it went before I went legit with taxes insurance ect. So what would be my first step keeping expenses as low as possible. I also have Paypal here but only 1 customer uses that.
     
  2. 32vld

    32vld LawnSite Gold Member
    Posts: 3,984

    Register your business with the gov. Most likely county gov.

    Get EIN from the feds and sales tax no. from the state.

    Workmens comp ins. if solo usually can get a WC exemption.
     
  3. 32vld

    32vld LawnSite Gold Member
    Posts: 3,984

    Collect checks without being legal. I think someone is not the sharpest tool in the shed.

    Even checks made out to cash can be traced back to you. If the gov wanted to go after you for back taxes you are toast.

    I tell my customers I have to charge sales tax. They say they will make the check to cash. I tell them the IRS will not believe I have that many aunts and that many birthdays.

    Also there is a guy on here, procut. His story is a lesson to keep personal money separate from business money and at two different banks. Maybe he would of not lost his business.
     
  4. Rll131

    Rll131 LawnSite Member
    Posts: 133

    What do you mean collect checks without being legal? Why am I not legal there personal checks made out to me personally. I don't need a license in the state of md nor do I need a dba. Basically just want to know what kind of insurance I need to get and how to pay taxes?
     
  5. recycledsole

    recycledsole LawnSite Gold Member
    from MD
    Posts: 3,231

    general liability insurance is what you probably want. should range from $300-$700/year for $1million dollar insurance.
    you might want to get some help with your taxes since you have a business. maybe they can show you how, and you can do it own your own after that if you feel comfortable.
     
  6. Cody S

    Cody S LawnSite Senior Member
    Posts: 753

    Basically by taking personal checks that is money made through your "business" you are doing what they call "tax evasion" if the IRS was ever to come down on you. Here is what I would do to solidify your business from the start to give you a solid foundation. You'll never be a business with taking personal checks and cash.

    1) Figure out a business name, then form your business. Don't waste your time on a DBA if you want to have an actual company. There are many forms of incorporation to choose from, but your best bet is to become a Limited Liability Company (LLC). It doesn't cost much to form, and you can even do it online. The tax rate isn't to bad, and you do all your business tax through your own personal 1040 at the end of the year.

    2) File for a EIN Number. Every business needs one. Sales Tax license is completely dependent upon what your state requires. For example, I don't need one for what my company offers. Now say I wanted to run my service aspect of this business, and also open up a landscape supply store, then I need to have a Sales Tax License. Basically, if you are offering a PRODUCT, chances are you need a Sales Tax license. If you are offering a SERVICE, you most likely don't. Like I said, just check with your state.

    3) Now you're an LLC and have your EIN, now you can accept checks with your company name! But you can't deposit them in your personal acct or cash them at a convenience store, so go open up a business checking and savings acct at your local bank.

    4) So you have a licensed business, an EIN, and a bank acct, youre ready to rock and roll....almost. Now you need a Commercial Liability Policy. Find a policy with a $1 to $2 million aggregate. Throw your truck on the policy. It will get classified as commercial/personal use. Youre trailer will be covered while being towed.

    5) Now you have a business name, it's registered with the State AND IRS, you have a bank acct that can track everything for the IRS, and you're insured. You can do this in a matter of a week, and the only thing it costs you is whatever you pay to form the LLC (Like $200).

    There are many aspects to running legitimately, but this is a good start.
     
  7. herler

    herler LawnSite Fanatic
    Posts: 5,144

    The laws change from state to state, what is legal here may not be legal there and the information you seek is highly important, get advice from here and what if it's wrong, most of us didn't register ours yesterday ...

    So I would go talk to a CPA.
     
  8. Will P.C.

    Will P.C. LawnSite Senior Member
    Posts: 965

    I knew a painter who built his business rapidly. I think he started out just as a weekend thing for 'extra money', but ended up doing it full time rather fast. I dont think he paid 1 cent for taxes and had checks made out to him. IRS came down on him and hit him hard for back taxes. Long story short, he lost his business. I think he is working for Kia on an assembly line now
     
  9. Cody S

    Cody S LawnSite Senior Member
    Posts: 753

    I would definitely advise you to take these peoples advice and talk with an accountant. It's much better to get your business advice from someone who deals with the legal aspect in your state such as a CPA or tax attorney, not a forum on the internet. Not that people on here are not a wealth of knowledge, believe me they are, it's just that every state has different regulations, and not everyone knows what you need.
     
  10. Rll131

    Rll131 LawnSite Member
    Posts: 133

    Thanks for the advice guys especially Cody. Made a lot of sense what you said I'm just going to have to figure out my states laws and rules exactly, hopefully it's pretty close to what you have stated.
     

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