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important tax Q's

Discussion in 'Business Operations' started by mikesjumpingin, Apr 18, 2003.

  1. mikesjumpingin

    mikesjumpingin LawnSite Member
    Messages: 101

    Just curious what everyone is writing off, such as gas for trucks (do you use gas/credit card for receipt?), and more importantly, what percentage of write off of your vehicle (claim 100% for business or a percetage?).

    Also, Lesco charged me state sales tax on an aerator rental. Do we have to pay tax for seed, fertilizer, rentals, etc, when we are collecting tax from our customers?

    Mike :blob3:
  2. NYRookie

    NYRookie LawnSite Member
    Messages: 240

    Here in NY I write off a % of my truck because I still have a full time job. I write off the % that I use it for the business, say I put 20,000 miles on total, 5,000 miles are business related, that means I can write off 25% of my total expenses for the truck. That includes gas, ins.,maint., repairs.

    I pay sales tax on rentals, and just about everything I buy, just because you collect sales tax from a customer, does not mean you don't have to pay when you buy or rent something.

    I would recommend that you get an accountant, he will save you many headaches for the money they charge. Good luck.
  3. tiedeman

    tiedeman LawnSite Fanatic
    from earth
    Messages: 8,745

    don't use the gallons, use mileage instead for your truck. You will get a better deduction with mileage.
  4. JimLewis

    JimLewis LawnSite Fanatic
    Messages: 6,872

    There are two basic methods of accounting for auto expenses. The Standard Mileage Deduction method will almost always get you more money. Plus, it's simpler. No hanging on to receipts for gas, oil, maintenance, tires, tune-ups, etc.!

    However, if you own more than one company vehicle, you aren't allowed to use the Standard Mileage Deduction and are forced to use the Actual-Cost method (which means filing every freaking receipt).

    If all you own in your household (e.g. you and your wife) is one vehicle, you can NOT claim 100% of that vehicle for work use. It's obvious to the IRS and/or a judge that if it's your only vehicle, you must use that vehicle for other purposes other than just business. BUT, if you own another, non-work, vehicle, THEN you can claim 100% of the work vehicle's expenses.

    Anyway, for more on all of this, check out this website. It explains it all.

  5. lawnworker

    lawnworker LawnSite Senior Member
    Messages: 897

    Hey Jim, I think if you have two vehicles, you can still use miles if they or not operated at the same time, like a taxi service.
  6. BRL

    BRL LawnSite Bronze Member
    Messages: 1,211

    Each state has its own sales tax rules, so you need to contact your state about those questions if nobody from PA answers. Basically any expense that you incur to operate your business is a "write off". However, as in the case of vehicle expenses there are varying ways to account for some items. Its best to get help from an accountant with this stuff.
  7. bastalker

    bastalker LawnSite Senior Member
    Messages: 965

    In Ct you can get a tax exemtion form that you hand over to your local seed and fert dealer, that will exemt you from paying tax from that particular store. If you deal with other stores for the same things you can give them one also. It simply means that you will be collecting the tax from the customer to give to the state. Keeps you from getting taxed twice. I dont know about rentals, I think it is strictly expendable materials...Something to check into.

    I use a credit card for gas, for the reciepts, and mileage, whichever comes out more at the end of the quarter, thats what I will use.

    I use my truck for 100% of my biz. I can deduct that. I pretty much save all my reciepts, and let the accountant do his thing.;)
  8. JimLewis

    JimLewis LawnSite Fanatic
    Messages: 6,872

    Yes, that's true. I don't know if a Taxi service is a good example or not. You basically can't ever have two vehicles on the road at the same time if you are using that method of deduction. But if you truly did have like 2 trucks, but only one person or one crew (e.g. one truck was always parked) then you could still use that method, yes.
  9. mikesjumpingin

    mikesjumpingin LawnSite Member
    Messages: 101

    I read up on the tax publications, but I'm curious...

    For those using standard mileage, do you log all those miles?

    That's what I don't want to have to do. I am still working a full-time job, so I am going to claim a percentage.

    Is it okay to just use my total miles on the truck, and simply subtract fixed mileage to account for commuting, without having to log all those trips for business use?

    I'm looking for the simplest record-keeping method for truck expenses.


    Mike. :blob3:
  10. hosejockey2002

    hosejockey2002 LawnSite Bronze Member
    Messages: 1,195

    Mike- I use the Dome Auto Mileage Log. It's a little booklet that has columns for date, starting mileage, ending mileage and purpose of trip. It only takes me a few seconds each time to fill it out, and I'm sure it would look much better to an auditor than a pile of paper scraps with mileage written on them. Unless you've got an expensive rig with lots of depreciation, mileage is the way to go IMO.

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