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Discussion in 'Starting a Lawn Care Business' started by jbell113, Jul 21, 2004.
Wanted to know what all can u write off?
Basically any expense that you incure during the course of doing business.
But understand one important point about a "right off", it is not a freebie from the goverment.
Example: If your business/Personal tax is 25%, then you have to spend $1.00, to save $0.25 Same with your vehical expense. the goverment might give you $0.36/mile to cover gas, repair etc, but really you only get 25% of that $0.36 Think of it this way, you spend $20,000/year on vehicals, and that is an expense, and you have an income of $100,000, which means you only get taxed on $80,000, which at 25% is $20,000, so you spent $20,000 on vehicals to save sending $5,000 to the goverment. If you had an income of $100,000 and no expenses, then you would be taxed 25% of $100,00 = $25,000.
Hope this helps, and I have got it right. Nothing worse than licking egg off ones face.
I would suggest buying a good tax guide (I like the Ernst & Young edition) for starters. That'll give you the basic understanding of write-offs. When I started my biz 3 years ago I got deluged with letters from CPAs offering free consultations. That's a good idea to do as well.
Talk to an accountant. Nothing will help you more than having an expert on your side. You could miss things or do the wrong thing.
This is the last year a small business can write off 100% of a 6000lb+ GVW vehicle's purchase price, up to $100K, and, you can spread that tax break over a 5 year period if your tax liability is too low to utilize it. Next year it drops to $25k.
Get this, as an owner of an LLC, your accountant can off-set your net losses of starting the business against any real income generated by your spouse. At $150 per billable hr, it still pays to retain a good/ethical accountant.
Possible write-offs: business related meals, a portion of your gas card/utilities/mortgage/insurance(both home and truck/health business related vehicles, clothing, advertising....etc
Basically anything legitimate and business-related that can reduce your "net income" reduces your tax liability.
ps Allways depreciate your vehicles/equipment as aggressively as possible!