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Taxed To Death

Discussion in 'Business Operations' started by 2 man crew, Feb 9, 2003.

  1. John Allin

    John Allin LawnSite Bronze Member
    Messages: 1,488

    As I said on another thread... I like paying taxes on profit. However, with an accountant I expect only to pay my fair share and nothing more.

    Missmanagment to have to pay taxes ?? If you're at it six years and don't pay any taxes yet - time to find another gig.....
  2. bruces

    bruces LawnSite Senior Member
    Messages: 648

    KehH - following comments not directed at you, but your quote is perfect illustration of one of my pet peeves!

    Owing a large tax bill at the end of the year doesn't really send up any red flags. The IRS will collect their penalty for not receiving estimates during the year and be happy.

    Do you think it is mismanagement on the part of 2 Man Crew or his CPA? (I assume you mean the taxpayer.)

    Depends on the relationship and what the CPA is hired to do for you. If you see your CPA once a year to get your taxes done and you get a surprise at the end of the year, it is your fault.

    Since the gross doubled over the prior year, that should have been a clue that taxes would be up substantially. It would have probably been prudent to go see the CPA before the end of the year and do a little tax planning. Too late now, obviously.

    If the CPA does work during the year and sees the gross going up (monthly financial statements, etc) he should have noticed and warned him.

    Don't expect your tax preparer to check and ask how things are going during the year unless you initiate the call. If you have just used them for tax preparation in the past, it is up to the taxpayer to react if you see something changing that will affect the tax liablity.

    Seems to me like an awfully lot of people on here are running businesses and purporting to be professionals but are unwilling to spend a little money for professional tax advice.

    If you really understand the tax laws, great, but the tax programs you buy at Best Buy or Office Max won't yield the right answer if you don't know what to put in to it.

    And besides that, you will be spending money that you could use to pay toward professional tax preparation and advice, not to mention the time you spend trying to figure it out.
  3. Russ

    Russ LawnSite Senior Member
    Messages: 540

    I have to agree. Add up your taxes, Fed., State, County, Payroll, Property, Business Property, Personal Property Excise, Gasoline, Sales, Fed. telephone, Emergency 911 useage, ect. What % of your gross is your total? Do you feel your tax dollars provide a value to you?-----OR is government spending out of control? I'm not against taxes. I know they'r necessary, but I sure do think small business need to draw a line in the sand. I think it was Jefferson who said "the government that governs the least governs the best".
    No your not the only guy not cheating. Am I the only moron who thinks we are over taxed?
  4. dougaustreim

    dougaustreim LawnSite Senior Member
    Messages: 488

    There is no question that we are overtaxed in this country. However, we cannot lower taxes until we cut government spending. The same people that complain about taxes are often the first people that complain when their favorite govt handout gets cut.

    If govt had to run at the same efficiency as we have to run our businesses to survive, the cost of govt would go down significantly.

    The other day, I drove though another town where a crew had gone through and trimmed the lower branches over the street and sidewalk. The city truck with a chipper was driving along with one city worker driving the truck and 4 men picking up and feeding the chipper. The size of the branches and the capacity of the chipper was such that on a private crew, there would likely have been only one man feeding the chipper, rather than 4. Without a profit motive, however, there is no incentive to be efficient. I always marvel when we call the one-call system for undrground utility locates. Privately owned utilities send one man to do the locates, the municipal owned utilities always send a two man crew or sometimes even 3.

    Until we fix these things taxes will always be high.

    Austreim Landscaping
  5. bubble boy

    bubble boy LawnSite Bronze Member
    Messages: 1,020

    try up here.

    top tax bracket approx. $65 000.

    and under that we pay significantly more. de facto socialism i guess.
  6. AztlanLC

    AztlanLC LawnSite Bronze Member
    Messages: 1,051

    It's good to pay that much on taxes trought the year that means that you made some good profit, the bad part is that you owe it, which leads me to believe that either you or your accountant didn't see it coming, something you get what you pay for, if you only use your CPA at the end of the year don't expect too much from them if she or he does all you reports tr ought the year I'd highly suggest finding someone else and put more attention on your part also.
  7. KenH

    KenH LawnSite Bronze Member
    from CT
    Messages: 1,622

    Hey Bruces-- The above is exactly.what I meant about mismanagement. If you do your own bookkeeping, it is your responsibility to make sure your business is on track, based on the taxes from the preceeding year.

    I do know that if you owe a certain amount of taxes you need to fill out special forms, (say 1a instaead of 1b for example.) this, to me, is a red flag.

    Ive been spoiled, as my Aunt is an accountant...I use her advice throughout the year. (yes I do pay her).

    I would assume the IRS keeps tabs on penaltys, late fees, fines, etc.......To me, these are red flags.
  8. TJLC

    TJLC LawnSite Bronze Member
    Messages: 1,308

    I keep in touch with my accountant throughout the year. I let him know to that point, what I have made and he adjusts my est. tax accordingly. In my 4 yrs of bus. I have ALWAYS been 100% legit in every way. I gripe about it, but I do it because I don't want to have to always look over my shoulder and I feel it is worth it to do the right thing.
  9. Mike Bradbury

    Mike Bradbury LawnSite Senior Member
    Messages: 492

    That's the situation where guys go buy a new $30,000 truck and use that biz deduction to depreciate it all this year,up to 27,000? I think. Pay the money to GM and have a new truck vs paying it to the gov.
    If you have access to the money, maybe some dealer would back date the sale to 2002?? (you didn't hear that from me):blush:
  10. lsylvain

    lsylvain LawnSite Senior Member
    Messages: 779

    Just for the info:

    In a class we took we went over government spending in detail and did you know that government overspending, (you know the $30,000 hamer and the $25,000 toilet) only accounts for less than 1% of government spending. This was 3 years ago but in relation to all other goverment "spending" over 60% of that was from social security, SSI, Welfare, etc.

    If you have a $20,000 tax bill you must have pulled in around $60,000 taxable income. $8500 of that is SE tax.

    Dont complain we get taxed less than most people around the world, and we have more stuff that we take for granted, like paved roads and 24hr police protection.

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