How do you categorize your business expenses?

zlandman

LawnSite Bronze Member
Location
Ohio
Every gas receipt I have says it's for gas and how many gallons. Must be different in other parts of the country.

The original question is a great one! The schedule C instructions do very little to clarify why these separate categories exist. In the end they are all business expenses and I don't see a logical reason for the government to need an itemization. Nevertheless I try to get everything into the most correct categories. Correct to the best of my ability after reading the instructions.
 

lawnspecialties

LawnSite Silver Member
Location
Garner, NC
Landscape Supplies
Equipment Supplies
Truck 1 Expenses
Truck 1 Loan (if applicable)
Truck 1 Fuel
Truck 2 Expenses
Truck 2 Loan (if applicable)
Truck 2 Expenses
Equipment Fuel
Equipment Fuel Total Gallons
New Equipment Purchases
Subs
Office Supplies
Uniforms
Licenses and Classes
Insurance
Estimated Quarterly Taxes
 

oqueoque

LawnSite Fanatic
Location
Jersey
Here is a link from the NASE, that talks about what goes where, Schedule c from A to Z : Schedule_C_from_A_to_Z_2012_edition.pdf
 

oqueoque

LawnSite Fanatic
Location
Jersey
Does anyone or everyone do a beginning and ending year Inventory ( for example fertilizer) . I've gotten different answers from different accountants as to whether it is necessary.
 

windflower

LawnSite Bronze Member
Location
wilmington nc
These are the ones I use but as others have said it really is only for you to track the expenses you want. On the tax forms I check "attached" and print a year end summary sheet.

advertizing
fuel
greenhouse
insurance
Int. & fees
job supplies
Lic & taxes
office expense
other
parts
plants
postage
rents
repairs
subscriptions
telecom
tools
utilities
vehicle
 

jeffie b

LawnSite Member
Does anyone or everyone do a beginning and ending year Inventory ( for example fertilizer) . I've gotten different answers from different accountants as to whether it is necessary.
I always have some bulk mulch, fertilizer, and miscellaneous chemicals. I show this as 0. I went through a nasty audit from the state of Arkansas a few years ago and that portion made it through no problem. On the original question I learned that simple is better. My categories are landscape supply, equipment repair and maintenance,small tool,shop,fuel,new equipment. It was awful at the time but being audited made me a better business owner the hard way lol.
 

Cardinal Lawn

LawnSite Member
Location
Dayton, Ohio
Several years ago, when I was first starting up, my company was audited. I knew I didn't keep accurate records nor did I keep all my receipts. Bottom line, the auditor disallowed thousands of dollars of expenses and I ended up owing thousands of dollars, plus interest and penalties. Needless to say, I learned my lesson. It is not a good idea to play with the IRS. Keep honest and accurate records.
Yeah- I ran the audit route! No fun at all, the irs sent a letter saying you owe $16,000 in back taxes. After hours of meetings and a serious scare of “miss placing all my records/receipts” and logging mileage how they wanted to see it, a tape of all the receipts in order of them in the envelope. Ugh
I will be as careful as I can. I paid $600 and felt like a winner! Even though rental equipment and work boots were disallowed.
 

cool breeze

LawnSite Senior Member
Yeah- I ran the audit route! No fun at all, the irs sent a letter saying you owe $16,000 in back taxes. After hours of meetings and a serious scare of “miss placing all my records/receipts” and logging mileage how they wanted to see it, a tape of all the receipts in order of them in the envelope. Ugh
I will be as careful as I can. I paid $600 and felt like a winner! Even though rental equipment and work boots were disallowed.

Wow, from 16k to 600, good job
 

rippinryno

LawnSite Gold Member
As a solo op, the easiest thing for me is to use a business CC.

Every single thing goes on that CC unless it's a big purchase. IF it's a big purchase I notate it in my spreadsheet and at the end of the year it's CC and spreadsheet, very simple, fast, and easy to keep track of.

All expenses go on the CC, from insurance, to fuel, to materials, safety gear, small equpiment, parts, maintenance costs, etc.
 

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