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Good Ol' Uncle Sam

Discussion in 'Business Operations' started by precisionlawn, Feb 7, 2003.

  1. precisionlawn

    precisionlawn LawnSite Senior Member
    Messages: 254

    Please tell me if I'm on the right track. And remember these are only examples not real figures:
    Lets say I had 40 weekly accounts @ $30 each = $1200 G.P.
    And lets say my my variable expenses per each account (gas, weed whip string, bags, etc.) was $2. Because I am operating alone. So that is $80
    And my fixed expenses (phone, answering service, advertising, insurance, and rent.) is broken down into $147.50 weekly.
    So thats:
    $1200 (G.P.) Gross Profit
    -$80 (V.E.) Variable Expenses
    -$147.50 (F.E.) Fixed Expenses
    $972.50 Net profit (before taxes)

    Now what I want to know is what percent of that does Uncle Sam take. I figured 30%???:confused:

    Which would take my actual net profit down to $680.75 N.P.
    Am I right? And remeber These figures are only examples!!!
    Thank you in advance for your input.
  2. ladibugg

    ladibugg LawnSite Member
    Messages: 79

    I am not sure where you are headed with this....but, Sam gets about 55%. Thats right. I am not sure how all these guys do it, but I pay my self about 5 bucks an hour. The best advice is tax shelters like mortgage interest and retirement plans.
  3. bruces

    bruces LawnSite Senior Member
    Messages: 648

    It depends, is the figure for 20 weeks or 52 weeks. You will pay self employment tax of 15.3%, income tax will depend on total income, other deductions, other income, filing status, dependents, etc.

    Spend a little and get some tax advice specific to your situation.

    I'd ask a tax preparer, not LCO's.
  4. walker-talker

    walker-talker LawnSite Platinum Member
    from Midwest
    Messages: 4,771

    Does that $2 a week also include equipment operating cost? That does not sound like much income, IMO. Get into the add on services as well, this will help boost income. Get a job in the winter if needed. Get a helper and double your accounts, then double your accounts with another crew. Get your pesticide license and make some serious money.

  5. dklawncare

    dklawncare LawnSite Member
    Messages: 79

    Make sure you include any purchases you have made through the year... Also, if you kept up with your miles then you can get 36.5 cents per mile. So if you traveled 10000 miles, then you have a big deduction right there.
  6. Ed Ryder

    Ed Ryder LawnSite Senior Member
    Messages: 541

    Yo Precisionlawn,

    Da*n, I thought you were a big guy. When you asked us to critique your promotional piece, your writing in the piece represented your operation as established with many customers. Why the deceit? There's nothing wrong with being a one man operation. For me it's a strength. In my humble opinion, you're much better off not bullshi*ing in your marketing pieces. Some people want to deal with a little guy and not a crew of strangers.

    You should absolutely emphasize your strengths as a sole operator. To clearly paint a different picture: i.e established, big, many customers and using words like "we" is a scam. I'd feel tricked.
  7. e-RoK

    e-RoK LawnSite Member
    Messages: 56

    Just A Lawn Guy,
    You do sound hurt. How did you take the Milli Vanilli scandel? Just teasing. I think the way he was marketing himself is pretty much the norm. Gives a nice professional impression I think. And it sounds as though you thought so too. Also keep in mind he never stated any numbers, he said he was an established business with many costumers. I don't see the deceit. What I think was you took those words and added your own numbers to them. I think that's good marketing. I think 30 lawns is many costumers for a solo op. You were just thinking he is bigger than he is.
  8. juststarting023

    juststarting023 LawnSite Member
    Messages: 84

    you left out allot of possible deductions there truck,trailer,mowers,etc i suggest you get an accountant to help you out.keep good books and all your receipts

    just a thought:eek:
  9. 65hoss

    65hoss LawnSite Fanatic
    Messages: 6,360

  10. paponte

    paponte LawnSite Silver Member
    Messages: 2,366

    That is one of the reasons I am incorporated. My accountant handles everything. There are business costs, equipment depreciation, deductions, write offs etc.! Sam is no uncle of mine, cash is cash. The only thing that goes down as a profit are checks and credit cards. What Sam doesn't know about he can't tax you on. I would seriously consider sitting down with an accountant. after I was incorporated, it opened a new door of opportunity for me. Taxes were different, the "company" was actually something totally separate than my personal account. Not only that, but I got a grant from the state since i was a new business. That's right, a $30,000 revolving line of credit to spend in whatever way I wanted. What "revolving" means, is if you spend only $10,000, thats all you get taxed on. You still have $20,000 available. Also Inc. protects your @ss. If something should happen, you personally can't be liable.

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