How much taxable income on $100,000 gross?

Discussion in 'Business Operations' started by lawnguyland, Apr 2, 2005.

  1. lawnguyland

    lawnguyland LawnSite Bronze Member
    Messages: 1,108

    Ok, here goes...
    For round numbers sake, let's pretend one were to gross $100,000 from all services in 2004.
    What would be a reasonalbe amount to expect to have as a taxable income after all the deductions and expenses are taken off. I know, I know, it varies widely depending on equipment purchases, overhead, how much of that was shrubs for clients, and a million other things like student loan interest deductions, healthcare, IRAs, and so on. I'm looking for an idea only for curiosity. Would it be reasonable to have a net profit of in the range of 35-40% or $35,000 give or take??? I know it can be higher or lower for any number of reasons, but if you have any thoughts, please let me know. I believe 30-40% is in the ballpark right? Wrong?
    In some ways it seems very low, but considering all the deductions I guess it seems to be about right. These are not my actual numbers (maybe more, maybe less) so a thougt on percentage taxable vs. gross receipts would be good. Thanks! Stupid taxes. For what?
  2. promower

    promower LawnSite Bronze Member
    Messages: 1,233

    Your right theres so many variables that the amount you are taxed can vary extremely. But I would say your in the ballpark of $30K and maybe 40K on the higher end. Then again if you play your cards right it could be more then $40K.
  3. Precision

    Precision LawnSite Silver Member
    Messages: 2,995

    Taxable income?

    What kind of company do you have? Sole Prop, partnership, C-corp, LLC

    I would pay myself most of what I didn't want to reinvest in the company. That way I would not be getting taxed on the corporate level. On the personal level I can always add to my IRA, take it against stock or realestate losses, invest in low income housing or something to conteract my increased income.

    But better yet get a good accountant to advise you.

    If you are trying to avoid the IRS audit cause you are doing something squirrely, then just stop the squirrely stuff.
  4. pjslawncare/landscap

    pjslawncare/landscap LawnSite Bronze Member
    Messages: 1,410

    $33,333.33 and of course 1/3 cent
  5. lawnguyland

    lawnguyland LawnSite Bronze Member
    Messages: 1,108

    Hey guys, thanks for the responses already. I am 100% too legit to quit and no squirrely stuff here! I have an accountant and have for the last 9 years. I'm a sole proprietor so paying myself is not really an option relevant to taxes, it all comes down to the bottom line at the end of the year. I just want to see if I'm in Shea Stadium. Of course like we've said, there are multiple variables and deductions.

    Yeah, 'taxable income', as in after I deduct x,y, and z from the $100k I have a number left that I would call my "taxable income" It's what left after schedule C! It's the amount I pay fed taxes on. Maybe I'm using the wrong terminology, but that's what I mean.
  6. lawnguyland

    lawnguyland LawnSite Bronze Member
    Messages: 1,108

    Ahh, very good. I was thinking more like $33,333.34 though! I just want an idea of a range. 20k would be too low, but not if I had purchased a new truck and other large equipment. 60k would be a little high I think as far as a 60% gross profit is steep. So 30-40k sounds about right, right???
  7. Planet Landscaping

    Planet Landscaping LawnSite Senior Member
    Messages: 607

    That sounds legit. Its hard to make money and not make money at the same time. :confused:
  8. sildoc

    sildoc LawnSite Silver Member
    Messages: 2,925

    Amen. I tried to show 0 this year by buying some last minute items. However either you take it in the shorts this year or you have to take it in the shorts next.(or buy more new equipment.) As a sole proprietor you can only use so much equipment.
  9. calbren

    calbren LawnSite Member
    from K.C. Mo
    Messages: 8

    Is your question this, if you gross 100,000 what percent should be expense and what percent should be income? Is a 30 percent profit normal or are most of you making less or more then that and if not should you consider making changes? I use to build houses and the goal for builders was a 20% overhead expense a 20% profit and 60% hard cost. I would think anything over 20% profit would be considerd doing good.
  10. PMLAWN

    PMLAWN LawnSite Gold Member
    Messages: 3,534

    Talk to an accountant. And take some business classes.
    In any 5 year period you need to make profit in at least 2 or the IRS will want to see what you are doing. You can not keep running at a loss.

    There is a reason that most of these guys are cutting grass and not in the business world. If you are paying 30-40K in taxes on a business that does 100K gross, you have no idea what you are doing. Get an accountant.
    You only pay taxes on profit. Which in a small business like this should be 10% or less.

    For 04 my tax rate compared to total gross income for the family/business/investments was around 8%
    Get an accountant and start learning the tax laws. They are your best investment. (and yes this is all legal and will stand up to an audit)

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