Tax HELP!!!

Discussion in 'Starting a Lawn Care Business' started by ryan41, Jan 9, 2013.

  1. ryan41

    ryan41 LawnSite Senior Member
    Messages: 326

    Hi - I started my business legit this year (LLC). I have a few questions about how to go about getting my taxes ready to give to my CPA.

    1. Do i need to input all of my business expenses into an excel program? or can i just give the CPA all of my receipts?

    2. I didn't do such a great job at keeping all of my invoice i sent out. I did save all of my bank statements though. (has a photo of all checks going in and out). Would that work as well?

    I only had about 14 lawn maintenance accounts. I had quite a bit of landscape jobs that i do have a copy of invoices for.

    Any help would be much appreciated.

  2. grandview (2006)

    grandview (2006) LawnSite Gold Member
    Messages: 3,465

    Problem with CPA,they like to have everything totaled up. If they are going to have to all that extra work it will cost you. I have a bookkeeper who comes in every other month and do my books and end of the year hits ,print and makes copies for me to take to my tax guy.
  3. lawnkingforever

    lawnkingforever LawnSite Bronze Member
    Messages: 1,280

    My tax person sees very little receipts or invoices. My wife customized my excel spreadsheets that makes things very easy for tracking revenue and expenses. The accountant does get some items, bank statements, annual summary of utilities cost, large purchase receipts, ect.... But general revenue and expenses are just tallied up. This maybe my last year using my accountant as I will probably be paying my wife to do my taxes going forward.
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  4. AI Inc

    AI Inc LawnSite Fanatic
    Messages: 27,060

    As others said the more you have prepared for your accountant , the less it will cost.
  5. Roger

    Roger LawnSite Fanatic
    Messages: 5,943

    Your post/questions point up the need for using good financial management software, such as QuickBooks.

    QB makes all your invoices, records all receipts, functions to reconcile your bank statements, tracks credit cards (expenses, payments), records and categorizes all expenses, and makes a concise P/L statement.

    As others have said, giving your receipts for expenses to the CPA is costing you lots of money. How does he/she know how to categorize these expenses? Why wouldn't you want to track these for your information to help make business decisions? Also, why wouldn't you want to track income through categories so you know exactly where you are taking income?

    I understand this is the first year, and kudos for getting started and addressing these matters. I think many of us who have been in business for many years would urge you to get started soon with sound financial management practices. The primary reason for business failures is not making crooked lines across a yard with your mower, or not having shiny wheels on your truck, but rather failure to manage finances well. Not to overstate the matter, but business is about financial stability, not about the joys of riding a ZTR.

    I wish you well. Keep asking questions and learning.
  6. britsteroni

    britsteroni LawnSite Senior Member
    Messages: 334

    Hello Ryan,

    I'm guessing you will be reporting your income and expenses from your lawn & landscape business on your schedule C.

    In order to save your accountant the most time, which in turn will save you the most money, try your best to total up your income and expenses based on the following categories from the Sch C attached below.

    It is also a good idea to save those bank statements and receipts from major purchases to give to the accountant so he has some backup for the income and expenses you are claiming, which he will be signing his name on.

    After getting familiar with Sch C, it would be fine if you grouped all of your expenses in an excel spreadsheet.

    As others above have stated, the more time you save the accountant, usually the less it is going to cost you to have the return prepared. Because most lawn guys aren't that busy this time of year, it might be worth your effort to organize your income and expenses instead of the old shoebox method.

    Most of your opportunities to save on income taxes have already expired b/c 2012 is over. Here are some opportunities that might be overlooked that are still available.

    1. If you have a dedicated home office that is used solely for that purpose, you may be allowed a home office deduction.

    2. The fuel used in your mowers and other equipment that is "off highway business use" is available to be claimed for a tax credit.

    3. You can contribute up to $5,000 to an IRA for yourself and your spouse. There is more to this than a short post on lawnsite, but the general idea is that you have until April 15, 2013 to contribute to an IRA that is then still deductible on your 2012 tax return.

    4. You can also set up an SEP-IRA plan. Again, too detailed for this post, but the basic mechanics are that you as the individual can contribute $5,000, but in addition to that $5,000, the business can contribute up to 25% of your compensation and it is deductible as a business expense.

    Hope some of this helps!

  7. KeystoneLawn&Landscaping

    KeystoneLawn&Landscaping LawnSite Senior Member
    Messages: 774

    Call your accountant and he will tell you what totals he needs to file. Being your first year, it may take you some time to get organized. Also being your first year, there may be some deductions a first year LLC can take and the accountant can advise you there too. Most your accountant!
  8. ryan41

    ryan41 LawnSite Senior Member
    Messages: 326

    Thank you for all the feedback!! I really appreciate it.

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