Taxes

[bmroyer]

I plan on going legit next season with a friend of mine, regestering an LCC name, getting insurance, and I need to know how taxes work, how much to put aside from each job, and how often you pay them. I've already slip the money per job to put some money to the company, overhead, fuel for truck and equipment, and of course the "paycheck" or take home pay. I really don't want to split the paycheck too much. Its not going to be no 30% is it?

[The Cleaning Doctor]

Lawn care business tips

You really need to talk to an accountant so that you get the correct information.

__________________
Pat

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[bmroyer]

how much is one of them and how long will I need them for?

[Steve]

Here is a rough idea. Remember, I am not an accountant.

After expenses, you have to look at your federal tax bracket.

If you make:

$0 to $8,500 you will owe:_____10% of taxable income
$8,500 – $34,500 _____$850 plus 15% of excess over $8,500
$34,500 – $83,600 _____$4,750 plus 25% of excess over $34,500
$83,600 – $174,400 _____$17,025 plus 28% of excess over $83,600
$174,400 – $379,150 _____$42,449 plus 33% of excess over $174,400
$379,150+ _____$110,016.50 plus 35% of excess over $379,150

Then you have to figure 15.3% of your net earnings for self employment tax.

Then you have to find if your state has an income tax.

Usually you have to send in your taxes quarterly based on your projected income for that year.

Does this help?

[bmroyer]

I'm from Pennsylvania, not sure if they have a tax. So you are saying pretty much I need to save 30% of my income to pay for the taxes. Is that income my take home, like I have it worked out as the following.

I only have 2 jobs so far this year, so maybe I should wait till I get more business before I start paying for insurance, and I prolly don't make enough to pay taxes yet anyways.

Lawn Care Business Money Plan
Date: 5/21/2011
by: Brandon M. Royer

****************
Company: 15%
Fuel: 10%
Overhead:5%
Truck Fuel: 20%
Paycheck: 50%
****************
$30:
Company: $4.50
Fuel: $3.00
Overhead: $1.50
Truck Fuel:$6.00
Paycheck: $15.00
****************
$40:
Company:$6.00
Fuel:$4.00
Overhead:$2.00
Truck Fuel:$8.00
Paycheck: $20.00
****************
$50:
Company:$7.50
Fuel:$5.00
Overhead:$2.50
Truck Fuel:$10.00
Paycheck:$25.00
****************
$60:
Company:$9.00
Fuel:$6.00
Overhead:$3.00
Truck Fuel:$12.00
Paycheck:$30.00
****************-
$70:
Company:$10.50
Fuel:$7.00
Overhead:$3.50
Truck Fuel:$14.00
Paycheck:$35.00
****************-
$80:
Company:$12.00
Fuel:$8.00
Overhead:$4.00
Truck Fuel:$16.00
Paycheck:$40.00
****************-
$90:
Company:$13.50
Fuel:$9.00
Overhead:$4.50
Truck Fuel:$18.00
Paycheck:$45.00
****************-
$100:
Company:$15.00
Fuel:$10.00
Overhead:$5.00
Truck Fuel:$20.00
Paycheck:$50.00

[Tom53]

I hold out 35% right from the top. That "should" cover the following where I live. 1.Federal Income Tax. 2. Social Security Tax. 3. State Income Tax.

After that is when you start to worry about overhead, such as liability insurance, vehicle fuel, mower and other equipment fuel and oil, filters, belts, tires, or whatever else you happen to wear out like engines, blades, cables, etc. That just comes out of my pocket, but I religiously keep receipts, and track vehicle mileage and any other expenses, because they are tax write offs.

I keep what ever is left after that, which in my case varies, as I dont have a set number of clients, and do other work not related to this business. I work as an independent contractor in a different line of work for several (at least 8 to 10) other companies right now, and am gaining new client companies every week. So much other work is starting to come in, I may have to give up all but my very best lawn care customers. My biggest tax expense at the end of the year is paying the accountant because I have so many W-9's for him to process. With all the write offs I havent had to pay any taxes for several years. And I thank my accountant for his advice because that is what I use to avoid taxes. I happily pay him his fee. Which is what I use that 35% for and I usually have a bunch left over, but better to put it aside and not need it, than to need it and not have it. I never have and never will cheat on my taxes, but I do use deductions to every advantage.

Keep your equipment well maintained, and dont abuse it, and that helps a lot.
But as has already been said, you NEED to consult an accountant to find out what is needed in your particular situation. Your situation is just that > YOURS, and it is NOT like anyone elses situation.


Simple answer to your ? about "its not going to be like 30% is it?"

YES you had better plan on 30% until your accountant advises otherwise.

[Steve]

It's stuff like this that makes you want to pull the hair out of your head and makes you realize how unfriendly our government can be to business owners who's existence is the backbone of our nation.