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cost to operate

Discussion in 'Starting a Lawn Care Business' started by magicmike, Mar 7, 2013.

  1. Smallaxe

    Smallaxe LawnSite Fanatic
    Messages: 10,082

    Truck payments are more of a personal expense rather than a business expense so to keep it sensible in "Operating Costs" you'll compute Mileage and you'll also find in Tax Prep., Mileage is the way to go...

    Stay out of debt and start where you are at, and don't let the math scare you out of it... I started with a pushmower in the trunk of my car and realized I was living the dream w/out so much mowing... It would have been absolute folly to get a loan for a trailer and ztr, before I realized I had better jobs available than mow and blow ,,, only... :)
  2. Patriot Services

    Patriot Services LawnSite Fanatic
    Messages: 14,168

    He's better than the guys that base their numbers off imaginary accounts they don't even have just to brag about the imaginary bottom line.
    Posted via Mobile Device
  3. Smallaxe

    Smallaxe LawnSite Fanatic
    Messages: 10,082

    I'm happy about what I do and I don't worry about what hotdogs claim about their bottomline... with a crazy view of how a business is run,,, there is no way that the crazy accounting methods will bring prosperity...

    The more we follow the accounting principles of gov't,,, the more likely we are to fail economically...

    Sometimes we step over a dollar to pick up a nickel,,, and sometimes we price ourselves out ofa job... :)
  4. 32vld

    32vld LawnSite Gold Member
    Messages: 3,983

    Truck payments are a business expense. IRS allows us to deduct $.55 per mile.

    If not landscaping one would not need a truck. One can get by and get better gas mileage with a car.

    Without a truck one can not run a landscape business. Yes some people throw in 21" mower in their trunk and do a few lawns when starting out. Though the proof that a truck is needed is that LCO's always move to a truck ASAP.

    Whether one always preferred an suv or pickup for their personal use before becoming an LCO. Being an LCO just makes them able to use their favorite type of auto for both work and personal use.

    To continue being an LCO when the current truck wears out and needs to be replaced the business needs to of made the money to buy a new one.

    Business bought the truck. A truck is a business expense.
  5. magicmike

    magicmike LawnSite Senior Member
    Messages: 266

    lots of good pointers guys thanks I am going to redo my expenses. Ill repost them once I get better numbers.
  6. New2TheGreenIndustry

    New2TheGreenIndustry LawnSite Senior Member
    from GA
    Messages: 918

    You can either claim truck expenses or mileage, not both. It works out for me to go with mileage. Ends up being about a 15-20k deduction each year.
  7. Patriot Services

    Patriot Services LawnSite Fanatic
    Messages: 14,168

    Side note. Once you switch from mileage to itemized you can't go back. For most guys mileage is best. The gov is actually quite generous with the rate. Never claim 100% business use though. Big red flag to IRS. 95% is realistic. Keep stellar mileage records. This is a ripe area for audits when guys make outlandish mileage claims.
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    Last edited: Mar 10, 2013
  8. 32vld

    32vld LawnSite Gold Member
    Messages: 3,983

    I have to check.

    The way I remember you write off the repair and maintenance for the truck or the $.55 per mile. And once you itemize you can not go back to the per mile rate.

    Though the truck purchase is treated as any piece of equipment that is bought so one can write off the purchase price of the truck.

    JALEXANDERSLC LawnSite Member
    Messages: 32

    How do you keep your mileage records? Do you
    write it down every day/week and then divide it by 95% at tax time?
    Posted via Mobile Device
  10. Patriot Services

    Patriot Services LawnSite Fanatic
    Messages: 14,168

    I don't anymore, now that I have multiple vehicles and other costs, itemized is to my benefit. Back in the day I just used a Dome hand written log with start and stop mileages daily. At the end of the year I just knocked 5% off that number. The IRS just has a real problem believing 100% of mileage is business. If you get audited they will say "so you never once deviated from the business route to get lunch, pay a bill, pick up groceries on the way home?". That's how much fun audits are. Thankfully I just got to see others. I've been questioned but never a full blown audit. Now they have GPS trackers and other devices, but the Dome book is still IRS approved, cheap and perfect for the small solo op.
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