Just a few questions.

Discussion in 'Business Operations' started by AndyTblc, Nov 25, 2006.

  1. AndyTblc

    AndyTblc LawnSite Fanatic
    Messages: 5,480

    Ok, so me and another person A LOT older then me. I'm 18 next month and the other person is about, well over the hill, probly 53. Anyway. We are going to go in business together this upcoming summer, and if we got our business licence to write off things and crap like that. When customers gives us checks. Do we need to pay income on that if we took it to the bank and just cashed it and not deposited it. Or would the government find out about it. Because my neighbor has his own business and when his customers gives him checks that don't have the taxes taken out. He takes them to the bank and puts it in the "sock drawer". Would you need to pay taxes on things like that? I hope you guys know what I'm getting at?
  2. Josh.S

    Josh.S LawnSite Bronze Member
    Messages: 1,085

    You will pay taxes at the end of the year on your adjusted gross...

    No, the government wouldn't find out about a personal check unless you got audited and had records of it... and if that happens you will wish that you would've claimed it...

    HOOLIE LawnSite Gold Member
    Messages: 3,981

    If you're planning on doing a little tax evasion, they why worry about getting a biz license "to write things off"??? Write-offs are great if you are actually paying taxes in the first place

    Your older and less-wiser partner probably has checks written out to him personally...if they are written to a REAL business they have to be deposited. At least with my bank, they won't let me cash or even get cash back on deposits.

    I mean you can do things the right way or not...I think you know which is which....
  4. AndyTblc

    AndyTblc LawnSite Fanatic
    Messages: 5,480

    Oh yah, I know which way. But we won't get a bus. Licence it we don't have too, we already have the equpiment that we need, accually we have 4 times as much equipment as we need, but this is where the magical word, "Back-Up" comes to mouth. So yah, I just thought I'd ask that. Thanks for the info.
  5. Josh.S

    Josh.S LawnSite Bronze Member
    Messages: 1,085

    I would just have your partner file under sole prop., and to get a business lic. to "write-off" stuff is pointless as the 2 above me stated...

    Just make sure you get insurance, and when you figure prices, if you think that gas is your main expence then your going to be a low baller....

    Hope it all works out for you, just figure your expences before you price things..
  6. AndyTblc

    AndyTblc LawnSite Fanatic
    Messages: 5,480

    Gas won't be our biggest expense. because we can get it cheeper then what people pay at the gas station. Who knows our biggest expense could be going to buger king for lunch.
  7. Uranus

    Uranus LawnSite Bronze Member
    from Mass
    Messages: 1,624

    Any check written out to a business has to be deposited.
    Any check written out to a persons name can be deposited or cashed.
    If your going to play that game go to the bank that the check is from.
    If you go to your bank and use your business account to identify yourself it can show up as a deposit and cash back. paper trail. For the little you will save doing that its not worth it if you get caught.
  8. topsites

    topsites LawnSite Fanatic
    Messages: 21,653

    Yeah LOL I know a couple of guys that play this dumb game of running bank-to-bank to cash all the checks, and I watch these guys running around in dilapidated 20+ year old trucks and with decrepit equipment...
    You gotta ask yourself if you want to work with stuff that's not fit for anything but the junk yard.

    And you will have more problems because of this...
    See, you're already breaking the law, so there is little to stop you from breaking more, and you will likely suffer...
    And if you don't, your equipment will (and hence, so will you).
    To say the least, causing problems breeds more problems for you.
    Take it from someone who's been down that road.

    But you can do it either way...
    1) I make one deposit / week, takes me all of an hour to write out the slip and stop by ONE bank.
    That 1 hour = $60.
    Now you go running bank to bank, you're talking several hours...At $60 / hour.
    If you only do this once / month, you're looking at +$180 / month in lost labor hours easy.
    x12 = $2,160... Wow, there's most of my yearly tax payments right there.
    Don't forget the extra wear and tear on your vehicle.

    2) Customers who, before you have a chance to mention it, already made the check out to your company.
    Now they have to write another one (read: uncool).
    And what if they left you the check?

    3) Customers who, when you do get the chance to mention it, frown. And for good reason, they're not stupid and they know what is going on (read: you can now expect to give a BIG discount, since you're not paying taxes).

    4) Customers who don't pay, and you can't go after them. You think you can, but you don't want your name plastered on their credit record OR go to court over it do you, since you're breaking the law, that might not be such a wise idea... So, you have no legal resources available for deadbeat collection.
    You need to think if you plan on running by their house and groveling at their feet every time someone doesn't pay.

    So like was said, you will lowball and there's nothing you can do.
    In the end, it's about the same money, so why not play it legit?
    Then you don't have to hide and be afraid.

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