What paperwork needs to be filed so I can have tax write offs? What can be deducted?

Discussion in 'Starting a Lawn Care Business' started by l3randonf, May 5, 2011.

  1. l3randonf

    l3randonf LawnSite Member
    Posts: 176

    Can I deduct the truck I just bought which is my only means of transportation? My equipment? My gas? The 800 dollars in tax that I had to pay the state of Texas to buy my new truck? What can be written off and what paperwork needs to be filled so that I am an official business? I have 0 yards at this time so I'm trying to keep it simple and write off everything I can.
  2. djagusch

    djagusch LawnSite Platinum Member
    from MN
    Posts: 4,231

    Call and set up an visit with a accountant. It might cost a $100 or so but would be well spent.
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  3. GravyTrain

    GravyTrain LawnSite Senior Member
    Posts: 375

    Agree with djagusch....talk to an accountant. I'll tell you this, any fees to your accountant should be deductible (i'm not an expert, talk to your accountant about that). But don't worry about what they will charge, how popular they are, how much they advertise, etc.

    Call up several accountants and choose the one that seems to be the most interested in taking their time to answer your questions. You are going to have a lot more questions than just these few. Find an accountant that is willing to help you out.
  4. jsslawncare

    jsslawncare LawnSite Bronze Member
    Posts: 1,674

    taxes? What?
  5. GravyTrain

    GravyTrain LawnSite Senior Member
    Posts: 375

    I'm glad I'm subscribed to this thread...can't wait to see what happens next.
  6. Mark Oomkes

    Mark Oomkes LawnSite Fanatic
    Posts: 12,400

    Next thing you'll be talking insurance and all that rot too.
  7. DavesLL

    DavesLL LawnSite Member
    Posts: 48

    Correct answer: talk to an accountant, or at least one of the tax services. A one time visit with an accountant will probably be slightly more expensive than walking into a tax office (like HR Block, Jackson Hewitt, etc...), but both should be able to give you the same information. The accountant will be able to discuss more than just the taxes with you though.

    Short INAL/A answer: as a solo proprietor, effectively the only thing you *can't* deduct on your taxes is what you pay yourself. Make sure you maintain records, receipts, and logs of EVERYTHING you're deducting; basically keep all paper for anything you buy, period. You only need the records in case you're pulled for an audit, but at that point, you will NEED the records.

    Slightly less short INAL/A answer: if something is an expense for your business, it's deductible. The general theory is, the service/product you bought for your business will be taxed on the seller's side, so taxing you for it as well would be a double tax (however, more than a few people don't bother to file their taxes correctly and end up paying double tax). Most of these deductions are basically straightforward, but for things like home offices and phone/etc charges for your business out of your home, there are rules and guidelines that must be met. For things like mileage, there's not really a short answer, but as long as the rules are followed at least a decent chunk of your business mileage is deductible.

    Long Answer: the accountant will give you this.
  8. Patriot Services

    Patriot Services LawnSite Fanatic
    Posts: 12,974

    The CPA that does your taxes will make the correct entries. Yes you will be able to deduct the truck. You will have 2 options for vehicle expenses (fuel,oil,tires,parts). You can claim them individually or take the .51 per mile deduction which usually works in your favor. Make it easier for your CPA, get organized. Keep receipts in neat files. Get a mileage log from Staples. Only log actual business use miles. If you get audited and your claimed mileage and odometer match you will have to explain to the IRS how you get around without a personal use vehicle. Don't try to be slick, be honest and don't cheat the system. Contrary to what some will tell you here operating legit has its benefits. Namely you get to keep your freedom. Lastly do not take tax advice from Wesley Snipes.
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    Last edited: May 5, 2011
  9. Smallaxe

    Smallaxe LawnSite Fanatic
    Posts: 10,081

    If you are not using your truck for work as a business, then you are either running personal or commuting... Nothing is 'deductible'... If your truck is being used for business then you want to use the Standard Mileage Rate ay least for the first year... $0.50/Mile for tax year 2010...

    You can always switch to Actual Expenses later if you want, but when you start actual expenses you can never go back to SMR...

    Attach Form 4562 to your 1040 form along with your Sch C, to report your Total mileage, your Business mileage to determine your % of business use...
    You will not write off, $800.00, unless your truck is 100% business, but then if you run 2000 miles for 2011 you'll write $1000.00 instead...
  10. Cuttingedgemowingandmore

    Cuttingedgemowingandmore LawnSite Member
    Posts: 2

    In a lawncare business can you deduct miles starting from your home to the jobs and back? Or just between jobs? Also, how do you deduct miles on a form 1065?

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