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What do I do about taxes?

Discussion in 'Starting a Lawn Care Business' started by JLL25, Aug 27, 2006.

  1. JLL25

    JLL25 LawnSite Member
    Posts: 200

    Hey guys, I work for a lawn care company I am a supervisor, I also do side work. I dont have insurance or a company name and I havent even kept records of jobs I've done. I did one job and then it turned into several jobs, some for the same person a couple times. I basically stick to tree work(I love tree work!) but I did a kitchen remodel last winter. I didnt plan on paying taxes on these jobs but I am slightly worried that somehow I may get into trouble for this. I've made around 5 grand this year, some paid by personal check and some in cash, do you think I should pay taxes? And how do I know what to pay as I dont have an exact recorded amount? Thanks y'all!
  2. Dunn's

    Dunn's LawnSite Bronze Member
    Posts: 1,546

    Lots of people do what you are doing and yes it is illegal, but it is all up to you. Just so you know the IRS isn't the most feared agency in the country for no reason,if they find out the will rip you not just one but multiple new a3311oles.
  3. ChadsLawn

    ChadsLawn LawnSite Bronze Member
    Posts: 1,110

    Maybe be alittle off topic, but has to do with the IRS. I got audited because We had a baby in Sept of 95. I collected "earned income". They said I had to show proof of my child. I was like WTF!!!!!!!!!!
  4. Gemini1971

    Gemini1971 LawnSite Member
    Posts: 25

    Speak to your accountant. The IRS doesn't fool around with tax evasion. Dunn is right, if you get caught your going need a proctologist.. :) The good news is your chances of getting caught for $5000 is slim to none but wouldn't that be a *ITCH if you were the one out of the millions that got stuck with the random audit.. Outch...
  5. Fvstringpicker

    Fvstringpicker LawnSite Fanatic
    Posts: 7,603

    My advise as a CPA and ex-tax auditor:

    File a schedule C with your tax return reporting your income/expense. Even if you miss the numbers, this generally prevents a failure to file penalty.

    If you didn't keep records of the cash and didn't put it in the bank, its going to be hard for you or your accountant to come up with the correct number.
    You may have to estimate this amount.

    If you get a form 1099, or work done for a business, be sure to include it as income on your schedule C.

    The money that was deposited in the bank is a source of reportable income.

    Start compiling your records and logs of milage, cash expenses etc. I'm sure you have these if you look for them. You'll recognize them because they have the date, vendor, description, amount etc. Believe it or not, some folks used to create these logs after the fact. We always picked up on it because the entries are made with same pen throughout the year.

    PMLAWN LawnSite Gold Member
    Posts: 3,535

    A kitchen remodel is something that the customer will post against Captial Gains on the house-- so it will be reported to the IRS, They will look for the other side
  7. StBalor

    StBalor LawnSite Senior Member
    Posts: 798

    What is your state laws on how much you can make before you have to file?
  8. Total.Lawn.Care

    Total.Lawn.Care LawnSite Senior Member
    Posts: 841

    Get copy of a IRS 1040 Schedule C and start compliling and making best guess estimates on all of the line items on the schedule C. Your bank account will be the source of most of it and alot of the expenses will be either actual mileage, supplies purchased, phone calls, etc. If you do it write, you might can write off some of your house mortage (or rent, whichever you have) as an expense against this side income you made.

    I to am an accountant and I advise that you file the schedule C. If you honestly made money from these jobs, then make sure you have proportionate expenses to reduce the amount of tax liability and then pay the appropriate taxes.

    If you need help, email me at tlc.lawncare@comcast.net and I will try to help you put together the numbers for the schedule C baased on what you tell me about the jobs.

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