Talked to Tax Man

Discussion in 'Business Operations' started by Husky03, Nov 30, 2004.

  1. Husky03

    Husky03 LawnSite Senior Member
    Messages: 432

    I called my parents tax man today to try to get some questions answered. I asked him how much to put back next year to pay taxes and he told me I needed to put back 15-20%. He said I only needed to put back like 10-12% if I was making under $10,000, but I told him I may make more than that next year to be safe. He told me to keep a log or save receipts to make write offs at the end of the year. He told me I did not have to save the receipts as long as I made a log. How do they know if you are telling the truth if you do not save receipts? ;) Also, he told me I could write off pretty much everything, even lunch. He also said that I could write off my new ZTR I bought at the end of this season since I will not be using it until next year. Does this all sound right? I did not know what else to ask him? Is there anything else I should have ask? Still trying to get ahold of the insurnace guy. He is never in the office :angry:

  2. Mo Green

    Mo Green LawnSite Bronze Member
    Messages: 1,487

    Interesting. I think I need to talk to a CPA as well.
  3. Husky03

    Husky03 LawnSite Senior Member
    Messages: 432

    What is a CPA?

    I also just thought of something. The tax man is the person you ask about becoming an LLC or sole proprietor etc. right? Should i ask him which would be best for me?

  4. Petr51488

    Petr51488 LawnSite Silver Member
    from NJ
    Messages: 2,377

    A CPA is a Certified Public accountant
  5. cleancutccl

    cleancutccl LawnSite Senior Member
    Messages: 698

    Husky if I were you I would wait until next year to begin depreciating your ztr. If you add 50% of your depreciable assets in the last quarter you make yourself liable for penalties on those assets. So unless you bought some other things throughout the year and the total of all those depreciable assets is more than the cost of your ztr you should wait until next year. And also It is much easier and smarter in the long run to make estimated tax payments throughout the year for your income taxes. That way you don't have to save money throughout the year to make one large payment, instead you are making payments throughout the year for your taxes. Basically figure what you think you will make next year and tell that to your CPA (tax man) and he can take care of the rest for you. One more thing, become an LLC, it will save your butt in the case of a lawsuit or, god forbid, an accident involving your business in some way. It costs a little money but in the long run it is a very good peace of mind.
  6. Husky03

    Husky03 LawnSite Senior Member
    Messages: 432

    Cleancut: remember I am a complete newbie here. What do you mean by depreciation. I know nothing about it. I have never even looked at a tax form. What is the advantage of paying your taxes throughout the year?

  7. bettergrass

    bettergrass LawnSite Member
    Messages: 242

    paying throughout the year in ohio you add up all income minus your expenses. and multiply the number by tax rate. i think mine is 7 percent. you do this every 6 months or you can even do 3 months.

    main advantage like he said above is that your seperating your payments and dont have to withhold any money for the irs at the end of the year

    hope this helps
  8. tonygreek

    tonygreek LawnSite Gold Member
    Messages: 3,852

    your parents tax man, presumably he's a cpa, seems to be leading you down a path you don't want to go down. you can't fully write-off 100% of lunch, and odds are, you can't write-off any of it. as for receipts, save all of them. the part about not worrying about them and just keeping a log is very, very bad advice. given this, you might want to find a local attorney who could advice you on the llc/corp stuff. you might ask your parents what kind of "tax man" he is, as well. could be he does nothing more than tax preparation.

    personally, i'd seek other advice than what you are getting so far.

    good luck!
  9. cleancutccl

    cleancutccl LawnSite Senior Member
    Messages: 698

    Tony greek is right. Save all business reciepts for at least three years. Because you can be audited on a tax return for up to three years after it is filed. Depreciation is when you buy a new piece of equipment used for your business, each year you get to use a portion of its worth to deduct from the amount you made for that year. Basically you get back the amount you spent on the equipment. Sorry I didn't realize you were 16. Over the next few years you will learn all about this, but talk to a CPA. Sounds like you tax man is not one. If you want to learn alot about how to do you taxes and ways to save your business and yourself money take a tax course. You probably can't take one until your 18 but its something to think about.

    During the winters I prepare taxes for HR Block. Good money but the best thing is knowing all the new tax laws and and ways to save or get money back.
  10. Husky03

    Husky03 LawnSite Senior Member
    Messages: 432

    How much can I expect to pay just to set up a time to ask an attorney questions? I just ask my parents and they said this guy was an actual tax man not just tax preparation. Also, he recomended I save receipts, but he said it was not a must. I was just asking because I was curious about not saving them and still writing stuff off. Also, I ask him how much yearly I did not say anything about every 3 months or anything. I called him and had no idea what to ask so maybe that is why I got the response I did. Maybe you guys can lead in the right direction as to what I should ask him and I will call him again. :help:


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