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Tax Write offs

Discussion in 'Starting a Lawn Care Business' started by bigkyle, Feb 14, 2007.

  1. bigkyle

    bigkyle LawnSite Member
    Messages: 114

    Well basically the ? is where can i find a list of all the possible tax write offs that i could use.Thanks
  2. mdvaden

    mdvaden LawnSite Bronze Member
    Messages: 1,946

    Who does your tax preparation?

    They might have a list.

    What works for one person, may not work for another.

    Sometimes I don't like "write offs" because a write-off is typically a loss of income too.

    Some people prefer to have less expenses (write offs) because they can make more money even if the taxes are higher too.

    So there are good taxable income deductions and bad ones.

    I prefer the term "taxable income deductions".
  3. Az Gardener

    Az Gardener LawnSite Gold Member
    Messages: 3,899

    I find that there are plenty of ways to lower your tax burden and most of them will benefit your business and make your life easier. You just have to be making enough money to do the stuff.

    How about hiring a consultant or coach to improve the business.
    Buying land for expansion of the business.
    Hire a family member in need and help them along.
    Donate to deserving charities.
    Get health insurance for your employees.
    Fund a 401-K
    Have a retreat in the off season somewhere nice, take your senior employees and set some goals and plan for the upcoming season.

    There are tons of ways to spend money that are tax deductible that will benefit the business with out being illegal err.. I mean creative.
  4. bigkyle

    bigkyle LawnSite Member
    Messages: 114

    ok thanks for the help guys
  5. lawnpro724

    lawnpro724 LawnSite Silver Member
    Messages: 2,201

    You can write off basically anything that is used for your business.
  6. eddings

    eddings LawnSite Member
    Messages: 97

    I don't think he is looking for new ways to spend his hard earned money. He is looking for ways to pay less taxes. For example, what is he spending money on now that is tax deductible, tires, gas, blades, trimmer line, food, etc. A list of ded. that are common would be helpful to the new LCO.
  7. wnccutter

    wnccutter LawnSite Member
    Messages: 122



    Interest on Credit Cards (hint:group and separate business items from personal items and "pretend" that your payment goes to pay off business expenses first)

    Interest paid on your Truck Loan

    If you don't have a "home office"...you can still deduct a % of all office equipment that you use...computer...copier...paper...make a reasonable estimate and document why...i.e. minutes on computer vs. minutes using the internet for personal reasons...then apply this % to all your office expenses...(include digital cameras...dsl modems and etc. AND time reading Lawnsite.Com would be a business expense)

    If you use your wifes car to do an estimate track the mileage and deduct it...document it though, date, time, odometer reading and etc...you will be surprised over the course of a year how much this can add up to...

    80% to 100% of my tax software...I would not need the expensive tax software if I did not have 1099s/W2s...

    All beverages I purchase during the year if I make that beverage available to employees or contractors or CLIENTS...$350 in gatorade, pepsi, etc...

    CB radios, batteries

    ...anything...ANYTHING that is remotely useable or needed by your company is deducted...

    Remember...the IRS requires you to expense these items and they expect you to deduct everything you can...also...almost..100% of the issues with the IRS are documentation...if you can logical associate an expense with your company...AND YOU DOCUMENT IT...you are going to be okay with the IRS...
  8. txgrassguy

    txgrassguy LawnSite Gold Member
    Messages: 3,083

    One problem in deducting vehicle use is the incredible amount of paperwork necessary to track and log for the write-off.
    A way which is much, much easier which avoids all of the documentation is to commercially insure all vehicles you can reasonably expect to use at work.
    This way all expenses the vehicle is used for becomes an automatic deduction on the appropriate schedule forms.
    A warning about deducting clothes, a flag the IRS uses is when denim clothes, you know bluejeans, wranglers, levi's, etc - are claimed as a deduction, the IRS will then examine the remaining documentation.
    Why the IRS will not allow denim as a write off I do not know but they won't.
    I found out the hard way as when I was building courses the first year I completed my own 10-40 form. Bang, got audited and ended up owing over $2,000.00 in additional taxes.
    Next year I hired a tax consultant, cost me $300 and she saved me over $4,000 in deductions I had missed.
    Now I use the canned tax forms slaved to my accounting software - what used to take days now takes about 2 hours.
    One point about vehicle use, make sure you have one vehicle that you own strictly for personal use - not for the business at all.
    In my case I report my 1979 BMW as personal use only, transportation to and from the shop etc.
    The IRS doesn't know, nor do they care it is a motorcycle.
  9. wnccutter

    wnccutter LawnSite Member
    Messages: 122

    As far as having one vehicle that is used strictly for personal use...that would make it easier to justify claiming your truck as 100% business...once again...business use is business use whether the vehicle is 100% business or some % between personal and business...

    Expensing under either situation is not that complicated once a few ground rules are understood...they are very well explained in TurboTax and I bet they are pretty clear with TaxCut or other well known tax prep software...

    Nevertheless...consulting a tax pro, an accountant or CPA is the best bet...especially when you are establishing your business unless you are well versed in how a Sch. C/1120 or etc. works...

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