I,m a pest

Discussion in 'Lawn Mowing' started by caz1, Dec 19, 2004.

  1. caz1

    caz1 LawnSite Member
    Messages: 72

    Ok I know I'm geting anoning and this thread should be on just starting a biz but I don't get the answers on fourm that I get here. My question is how do you guys pay yourself are you salary or hourly or all profit is yours :waving:
  2. SodKing

    SodKing LawnSite Bronze Member
    Messages: 1,641

    I pay myself a weekly salary. It is based on the previous years profit, what the company needs to retain for upgrades and anticipated increases in the profit margin.
  3. captaingreen

    captaingreen LawnSite Senior Member
    Messages: 471

    Well, my first year I had a DBA checking acct. and wrote all expense both bus. and pers. out of this acct. and relied on my software to track which expenses were bus. and pers. related. I really didn't pay myself in the sense of a set amount, I just kept whatever was left over at the end of the year in the account, after Uncle Sam got his chunk anyway, for my personal use. Pretty much did the same most of the second year. Next year I'm becoming a LLC, so I'm kind of restructuring that system. I'm actually paying myself a set salary this coming year. My accountant actually came up with the number based on things growing slightly over what I did this year, and taking into account the best number that would help me out on the tax benefit of being an LLC.
  4. mtdman

    mtdman LawnSite Gold Member
    Messages: 3,143

    Know your expenses. Put that money aside. Put aside whatever money you want for investment and improvements. The rest is profit, and take as much of that as you need to, when you need to. I've always just taken the money as I've needed it, nothing real regular. The longer I leave it in my business account, the less of it I spend. I suppose once I start hiring people and having a regular payroll, I'll start paying myself more regularly.


    BTW, what's the tax benefit of being an LLC? A single member LLC passes the profits through to the member, and that gets reported like a sole proprietorship on schedule C. There's no tax benefits there.
  5. captaingreen

    captaingreen LawnSite Senior Member
    Messages: 471

    The benefit is the revenue that is not paid to me in salary. The way I understand it I'm saving the 7.5% social security tax on that money. All I know is my accountant says I would be saving over $2,000 on taxes this year if I had LLC'd as an S corp last year. Your a smart guy MTD, you should know that! :rolleyes:
  6. naturescaretaker

    naturescaretaker LawnSite Senior Member
    Messages: 854

    You should really have a CPA advise you on this. Speaking from what I do, I personally own a couple of vehicles I lease back to the company at fair market valaue. I own the land that the shop sits on. Therefore the company pays me rent for use of the land. Then I draw a salary paid on the first of each month and a percentage of profits at the end of the year.

    BOTURF LawnSite Senior Member
    Messages: 316

    Thats what my cpa did for me this year.... we are now a s corpand are registered with the fed goverment as such

    XYZ Landscape Maintenance Services, INC.
    dba ANY NAME
    Saves paying the self employment tax as captain green stated and will save a bunch come april 15 . Payed myself a salary or my secetary treasuer did ( My wife ) every week . You need to get a good cpa, worth their weight in dollars for sure and pick his brain
  8. Frontier-Lawn

    Frontier-Lawn LawnSite Silver Member
    Messages: 2,955

    Here's how i do mine:
    Monthly Income
    15% Taxes
    20% Expense's
    25% Business Savings
    40% goes to me
  9. mtdman

    mtdman LawnSite Gold Member
    Messages: 3,143

    Whether it's a salary or profit, if it comes from your business you have to report it on schedule c and pay the self employment taxes on that. On schedule se, you report the net profit from schedule c, and base your self employment taxes on that. As a single member LLC, you must use schedule c to report your income just like a sole proprietor.

    I am a smart guy, I do know that!
  10. captaingreen

    captaingreen LawnSite Senior Member
    Messages: 471

    Me and my CPA reserve the right to disagree with you :D

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