what is the proper term?

Discussion in 'Lawn Mowing' started by bobbygedd, Feb 23, 2004.

  1. bobbygedd

    bobbygedd LawnSite Fanatic
    from NJ
    Posts: 10,178

    ok, what is the proper term for this: when i cut 50 lawns a week, at $30 each, i GROSSED $1500. now, at the end of that week, i write myself a paycheck(or as my accountant says, a "draw") ok, so i write myself a check for $600. it hasnt had any deductions taken out. so, is that $600 considered my GROSS? as far as my pay is concerned? is the same term "GROSS" for both of these? ok, i'm makin myself dizzy, do you know what i'm trying to ask?
     
  2. EagleLandscape

    EagleLandscape LawnSite Platinum Member
    Male, from Garland, Texas
    Posts: 4,347

    its gross to you, but your company could call it paying salary. aka company expense.
     
  3. PLI1

    PLI1 LawnSite Senior Member
    Posts: 254

    1. Gross company income
    2. Gross Salary
     
  4. bobbygedd

    bobbygedd LawnSite Fanatic
    from NJ
    Posts: 10,178

    ok, so then, let's just say, for instance if i wanted to brag, but still tell the truth. if someone asked, "hey you pee on lawn boy, how much you make last year?" i would say like, "well sir, my company grossed $80,000. and i grossed $60,000. and........by the way, while you were working, i was wearin your robe and slippers, smokin your pipe, and your wife was frying me some ham and eggs. " got it guys, thank you
     
  5. PLI1

    PLI1 LawnSite Senior Member
    Posts: 254

    Bobby, That you just mentioned is called "Company Bonus!!"
     
  6. Zach76

    Zach76 LawnSite Member
    Posts: 197

    Bobby, you are the coolest. Thanks for keepin me laughin.
     
  7. DUSTYCEDAR

    DUSTYCEDAR LawnSite Fanatic
    from PA
    Posts: 5,134

    just remember bobby every time u take a draw u pay taxes on it twice;)
     
  8. bobbygedd

    bobbygedd LawnSite Fanatic
    from NJ
    Posts: 10,178

    taxes on it twice? how so?
     
  9. DUSTYCEDAR

    DUSTYCEDAR LawnSite Fanatic
    from PA
    Posts: 5,134

    depending on how u have your company set up u could be hit twice with taxes 1 as the company gross income then 2nd as income to yourself
     
  10. Let it Grow

    Let it Grow LawnSite Senior Member
    Posts: 476

    That money would be your personal income. I'm assuming that your business is set up as a sole proprietorship.
    If that is true then any money that you, the owner, takes out of the business is called an owners draw, which is basically your salary. That is not the same as your gross income from your business. Gross income is the amount that your business received for sales & services (also called gross receipts). Your net income is basically just your gross income less business expenses. This is the "formula":

    Gross Income-Business Expenses=Net Income

    When someone asks "what did you gross last year" they are wanting to know how much sales or services your business did. But that number is not actually that helpful when you want to know how much you actually made in profit (your Net Income).

    I hope this helps.
     

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