Write offs?

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

  1. Smallaxe

    Smallaxe LawnSite Fanatic
    Posts: 10,080

    Are you setting up your pickup trucks for Depreciation??? Bad mistake even if it really IS 100% business use...
    Start with Mileage at least the first year, so that you can always return to the SMR later on...
    Trucks/cars are considered, "Listed Property" by the IRS Code, just like computers, phones and such...

    Depr. is good for 3 years,,, then What? Buy another Truck or spend a lot on repairs???
    I always advised clients to think about their usage and make a decision for the long term... almost always they chose the SMR...

    Its been a few years now since I did that job, so some details may have changed, but I do SMR on my taxes every year...
     
  2. Smallaxe

    Smallaxe LawnSite Fanatic
    Posts: 10,080

    As an S-corp. I was recieving notices from the FEds about health ins. for my Employees, even though we were 2 only...
    This happened as soon as Obamacare was signed into existance... I killed the Corporation the very next week... I quit the tax business due to the headaches involved and I cerainly wasn't going to deal with the paperwork of Obamacare...
    Sole Proprietorship is just fine, if done correctly...
     
  3. Kelly's Landscaping

    Kelly's Landscaping LawnSite Platinum Member
    Posts: 4,280

    Think you may have prematurely given up on your corp. Iv read as much as I can on Obamacare and if you have fewer than 50 employees most of it misses you. You are still going to get whacked with the personal fine for not having it which goes to 2.5% of your income in 2016 but thats only 1000 at 50K. (yes I know not exactly 2.5% in that example but its their numbers and they phase it in funny and skip the first 9k or so) They led every one to believe the fine was either 695 or 750 but the actual current cap is 4700 which is reached at 200k income. What I find funny is 37k vs 9k both pay the 695 dollar fine in 2016.

    Iv always had a payroll service so we allow them to do a lot of the paper work. Now where Obamacare gets rude and will in fact cost millions of Americans their jobs no debate about it is the fines over 50 employes. At 51 the stated fine is 2000 per employee over your first 30 so that would be 21 employees times 2000 or 42000. But that is a lie and like the rest of the bill was designed to fool you. Every employee that gets his own insurance through and exchange or say he doesn't like your plan cause you require him to pay part so he goes on the exchange. They do not get fined at 2000 each they get fined at 3000 each even if you offer your employees insurance!!!! Now you have 51 they will base the fine on at 21 employees do you have any doubt they will be able to pick 21 out of 51 on their exchanges of course they will. So the fine is now 21 employees times 3000 or 63000 for adding that next employee. And it gets even better its not deductible so the effect is closer to 100k pre tax.
     
  4. herler

    herler LawnSite Fanatic
    Posts: 5,144

    It is not a wise idea to write off more than what you bring in.
     
  5. Smallaxe

    Smallaxe LawnSite Fanatic
    Posts: 10,080

    Like I said ,,, Headaches...

    As a solo operator I've decided that a citizen of the USA may have more rights than a subject of the USA... Especially a 'subject' created by the State... :)
     
  6. 32vld

    32vld LawnSite Gold Member
    Posts: 3,984

    Why can't one keep time sheets for the maintenace work that one does, pay oneself hourly, and write it off?
     
  7. KeystoneLawn&Landscaping

    KeystoneLawn&Landscaping LawnSite Senior Member
    Posts: 774

    Much of the advise you receive on this site about the legalities of running your business is a valuable place to start. However, nothing beats having a quality professional CPA.
     
  8. herler

    herler LawnSite Fanatic
    Posts: 5,144

    If you do that you'll need to pay yourself as an employee and that affects the way your company is set up, tax-wise if you work solo you'd have the company set up as a sole proprietorship which in turn leaves no room for employees... And if you set yourself up for employees so you can deduct maintenance you might as well start hiring because you'll need a secretary just to handle preparing and filing quarterly taxes.

    Keep in mind this isn't even beginning to describe but the top most quarter gram tip of this iceberg.

    You wouldn't believe the sheer number of tax forms that have to be filled out every three months for the IRS in an employee-based company, a sole proprietor can't do it, believe me this and either way you go is fine by me but it's one or the other else it's damned if you do, damned if you don't, been there, done that.

    Granted, you can probably hire an administrative assistant part time.
    On the other hand, sole proprietorships only file once a year.

    Again I haven't really delved into this in depth at all, the above is not in any way to be viewed as anything but opinion, it is not to be seen as advise on how to do things.

    That is why you may wish to retain the services and experienced advise of a certified public accountant.
     
    Last edited: Dec 22, 2012

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