Write offs?

Discussion in 'Starting a Lawn Care Business' started by goinggreen123, Dec 20, 2012.

  1. goinggreen123

    goinggreen123 LawnSite Member
    Posts: 106

    Is there only a certain amount you are entitled to with tax write offs? My business has been up and running for 5 months now and I have spent allot more then I have earned but I am considering buying a truck and of course I am going to claim it on my return but have I gone too far lol?
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  2. HPI_Savage25

    HPI_Savage25 LawnSite Member
    Posts: 192

    I set mine on depreciation. So when I bought my equipment I believe I did a 3 year. So instead of claiming it all on one year. It will be split up for 3 years. I did that on my truck and all equipment.
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  3. Kelly's Landscaping

    Kelly's Landscaping LawnSite Platinum Member
    Posts: 4,353

    You can roll your deductions over from one year to the next. I have more than 100k in roll over deductions and that doesn't even count the new 65,000 dollar truck we picked up this spring/summer. There is no rule that says you have to pay taxes, if you have real legitimate deductions take them.
  4. weeze

    weeze LawnSite Fanatic
    Posts: 8,908

    my first year i got money back from the government. i spent more than i made but in reality i didn't. the way that works is say you buy a mower and are making payments on it you can write the entire amount of the mower off at one time. you can also space it out and write it off over 3 years or so. i just did it all at once though. you have the option. as far as my truck it's my personal truck too so i can't write it off at all. i can only write off the mileage driven for business reasons.

    basically you can write everything you spend on your business off. mileage, gas for the mower, trimmer line, blades, blade sharpeners, earplugs, trailers, mowers, trimmers, blowers, edgers, oil, etc. it has to only be used for your business though technically. it's not supposed to be stuff you also use for personal stuff outside of your business. i mean if you use the business mower to cut your own yard too so what. noone is gonna be sitting outside your house making sure you don't use your business mower to cut your own lawn lol. it would be stupid to buy a whole new mower just to cut your own lawn when you already have a top of the line mower you can use.
  5. goinggreen123

    goinggreen123 LawnSite Member
    Posts: 106

    what do you guys think I should do? I have big plans for this business I have been in it for a long time just havent done it on my own and its getting there day by day even this time of year I am picking up clients, atleast one a week I got my 06 chevy on route now and this truck I will be getting is another 06 chevy lol same mileage look and everything the only thing different is its a single cab vs my other is a crew cab. I am getting this truck for the future of the business do I really need it right now? No but I can sleep good at night knowing that if something happens to one I have another on stand by. I am buying it for 4 thousand its a deal I am not going to pass up but do you think I should write the whole thing off this year? My business can use it would like another trailer and nice used walker.
  6. RSK Property Maintenance

    RSK Property Maintenance LawnSite Bronze Member
    Posts: 1,486

    depends on what you are trying to show for your business. If you are trying to buy a house or anything bigger, and want to show you are making decent money, then more write offs isn't gonna help, because that will show you made less money. If you are truly just trying to get the tax deduction for your business, then go ahead and buy it and write off the whole thing all in one year.
  7. rbljack

    rbljack LawnSite Senior Member
    from Texas
    Posts: 702

    I have a related question here as well. Because our equipment requires maintenance (oil changes, cleaning, lubes, tune ups, blade sharpening etc)...can we include that TIME we dedicate to that as an expense in addition to the materials. As an example, if we spend 8 hrs a month doing oil changes, blade sharpening, etc....can that TIME be applied as an expense? I havent had time to research this yet, but seems like a logical thing to me. IF we make X dollars per hour net, seems we should be able to log the time for maintenace like we do mileage, and then subtract that time and dollar value from our Net Income somehow.

    Posts: 1,343

    Only if you have an invoice can you deduct an expense.
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  9. Darryl G

    Darryl G LawnSite Fanatic
    Posts: 8,063

    If you want to deduct your equipment maintenance time you'll have to send it out to the shop or have an employee do it. If people could deduct the time they spent as an owner, people would be spending thousands of hours on it, lol. Similary you can't deduct your time doing administrative tasks unless you're paying yourself hourly and keeping time sheets and all.

    I deduct any equipment purchases under $500 in the same year and depreciate the rest over time. All of my equipment is fully depreciated now except for my snow plow. Some companies turn their equipment over as soon as it's fully depreciated.
    Last edited: Dec 21, 2012
  10. Kelly's Landscaping

    Kelly's Landscaping LawnSite Platinum Member
    Posts: 4,353

    You get to deduct your payroll and if you are an employee of your company and your set up as a Corp then your salary is deductible. All profits and loses pass through to the owners. We often see a modest profit but then our accountant does his depreciation tables and we get some rather nice deductions passed through to the owners.

    I guess the negatives are the amount of tax returns my partner and I have to complete each year. I have 2 personal one to the fed one to the state he has 2 personal one to the fed one to the state and the corp has 3 one to the fed and 2 to the state. Needless to say H&R block hasn't seen us ever.

    Something that I think most people over look when it comes to salary's as a business owner. Is with the tax code and of course the perks that go with owning the business in what ever trade you have, it can give you a life better than the raw numbers would indicate.

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