Tax time coming

Discussion in 'Business Operations' started by formerscrub, Jan 8, 2002.

  1. formerscrub

    formerscrub LawnSite Member
    from Florida
    Messages: 16

    I classify my lawn operation as "part time" employment because I also have a full time job. My question is does anyone else do this and because this is my first time doing taxes for my business can I still take the deductions on my vehicle miles and equipment even though it is part time. Any comments would be greatly appreciated.
  2. LoneStarLawn

    LoneStarLawn LawnSite Bronze Member
    Messages: 1,415

    Yes you can deduct vehicle expenses, but you have to have a detailed log on what miles were business and what were personal so the percentage of business can be deducted.

    There is two ways for the deductions too. Check with the irs website to see which way is best for you (or which you are able to do)
  3. steveair

    steveair LawnSite Bronze Member
    Messages: 1,073


    I'm not sure what this 'part time' classification you have means.

    If you are running a business along with working full time, the business, in the eyes of the IRS and state is considered FULL TIME from my own experiences.

    What this means, is you treat it just as a regular, full time business.

    Writing off the vehicle is going to be are going to have to keep very good records on the mileage and also learn the codes on how to treat it as a deduction.

    For instance, if you drive to work, then go directly from work to the job, and then drive home from the job, you may think that you can write off ALL of the mileage because you technically had to drive the same way to work anyway as you did to the job. The fact is, you will have to deduct the round trip mileage from your full time job as personal mileage, and may only be able to deduct the mileage on top of that as a business expense.

    What you are going to find out is that the deduction for you part-time vehicle are going to be much, much lower than you think.......the IRS is very picky when it comes to personal mileage and business much so that you may be better off not claiming a thing at this point in the year if you have no records, fuel receipts, etc. Unless you kept a ledger in the vehicle tracking every trip you took for business, a accountant is going to tell you to just forget about it.

    Also, not sure how florida is, but here in NJ jan. 15 is the due date for quarterly taxes. In other words, you should be paying taxes NOW............a problem that may arise come April and penalties arise.

    The best advice is to go see an accountant , and go see him NOW.

    I worked full time for 9 months in 2001 and then went full time for the last didn't make a difference in the realm of taxes.

    Plain and simple, if you make money, you pay taxes on it.

    Really, go see a accountant immediately. It is the best advice I can give.

    Also, I hope if you are doing maintenance (mowing, pruning, etc) you have been charging sales tax. If you haven't been, then you are in for a whole other world of headaches.

  4. LoneStarLawn

    LoneStarLawn LawnSite Bronze Member
    Messages: 1,415

    If you are refering to him on federal taxes then which state you are in does not matter.

    Also, in florida, there is no sales tax on mowing services. (From what I have read and what people have posted here)
  5. steveair

    steveair LawnSite Bronze Member
    Messages: 1,073

    yes, I your right lonestar with the fed quarterly.

    I think I am right, but is there really a 'part time' classification when filling taxes? and if there is, does it really change anything?

    If there is, then does a part time business not have to pay quarterly taxes?

    I just don't understand this 'part time' buisness idea when it comes to taxes I guess.

    The way I see it, you going to pay 40% of what you made no matter if you are part time or full time.

  6. LoneStarLawn

    LoneStarLawn LawnSite Bronze Member
    Messages: 1,415

    no there is no classification for taxes (full or part-time) personal taxes are based on income. Business taxes are based on your business. Self-employeed should be paying estimatted tax quarterly.

    He was classifing it to us ...not necessarily for the IRS.

    It is in your best interest to talk to an accountant otherwise you might get bad information or cross info from here.
  7. steveair

    steveair LawnSite Bronze Member
    Messages: 1,073


    in other words, he should of been paying quarterly taxes this year already then.

    and in any case, should plan to pay quarterly taxes this upcoming year, whether he's working part time or not?

  8. LoneStarLawn

    LoneStarLawn LawnSite Bronze Member
    Messages: 1,415

    Not necessarily..since he has another job he can have his w-4 form changed so more taxes are taken out from there.
  9. steveair

    steveair LawnSite Bronze Member
    Messages: 1,073

    that makes sense.

    sorry for all the questions.....just get confused on the business aspects of having a business while working full time. thanks for the help

  10. bruces

    bruces LawnSite Senior Member
    Messages: 648

    The IRS doesn't care whether you work at your business 5 hours a week or 50 hours a week. The same basic rules apply to deductions, etc whether you are full or part time.

    As far as vehicle expenses, the portion of mileage related to business use can be deducted. Consult with your tax advisor regarding what is deductible and what is not.

    As far a estimated payments, that will depend on tax liability vs. tax withholdings from your wages any your wife's wages (if any). If your withholding is high or your other deductions can offset your business income, you might not need to pay estimates.

    You need to get all of your info to your tax preparer so he can tell you where you stand. It could keep you from getting a big shock on April 15th if you made some decent money in the lawn business this year.

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