Lawn Care Business Forum Lawn Care Business Book Lawn Care Business Blog Lawn Care Software
Home Forum Contract & Flyer Templates Blog Software Videos Podcast Calculators / Estimators Store Mower Review Design It Yourself Lawn Business School

Go Back   GopherHaul Landscaping & Lawn Care Business Marketing Forum > Business > General Business Discussions

General Business Discussions A place to talk about general business discussions.

The evil 5 letter word "TAXES"


General Business Discussions

A place to talk about general business discussions.
Reply
 
Thread Tools Search this Thread
  #1  
Old 07-15-2011, 08:12 PM
Ducke's Avatar
Ducke Ducke is offline
Senior Member
 
Join Date: Nov 2010
Location: The Duck Pond
Posts: 844
Rep Power: 4
Ducke is on a distinguished road
Default The evil 5 letter word "TAXES"

This being my first year on my own I am learning all kinds of neat new things.
I have read many books and talked to many business owners and everyone has been a great help.

So I have a question about my pending year end.

Is it better to end the year with a profit in the bank ?
or
Is it better to reinvest your profit back into the company (equipment advertising etc) and have a 0 balance at the year end ?

I have been setting a side for the sales tax portion so I have that covered.
But which of the above is better for me in the end as it applies to my income Taxes ?
__________________
Ducke's lawn Care and Introducing Duck's Seasonal Decor.
Reply With Quote

Stop guess-timating. Learn how to estimate and make money! $$$
Mow Time Estimator Lawn Care Price Estimator Mulch and Topsoil Calculator Snow Plow Estimate Calculator


  #2  
Old 07-15-2011, 08:48 PM
Steve's Avatar
Steve Steve is offline
Administrator
 
Join Date: May 2003
Posts: 36,307
Rep Power: 10
Steve has disabled reputation
Default

Lawn care business tipsLawn Care Business Book
Let me pick your brain for a moment on this because I think this is a very important topic many many new lawn care business owners deal with.

Are you leaning towards one or the other?

What's your view on the pro's and con's of each?
__________________
- Subscribe to my Lawn Care Marketing Blog Feed and get daily tips sent to you. Free!
Download your Free trial of Gopher Lawn Care Software.
Reply With Quote
  #3  
Old 07-15-2011, 10:14 PM
bruces bruces is offline
new member
 
Join Date: Apr 2010
Posts: 828
Rep Power: 0
bruces is on a distinguished road
Default

its a hard question to answer .If you have money in the bank ,you will have an easier time getting a loan ,mortgage etc. ,if you have no money you will pay less taxes but not have any luck when you darken the door of your bank looking for money to buy something with .Talk to an accountant because either situation has benefits and issues to deal with .
Reply With Quote
  #4  
Old 07-15-2011, 10:22 PM
The Cleaning Doctor's Avatar
The Cleaning Doctor The Cleaning Doctor is offline
Senior Member
 
Join Date: Nov 2009
Location: Helena, MT
Posts: 927
Rep Power: 5
The Cleaning Doctor is on a distinguished road
Default

Let's put it another way. Say you are in a 30% tax bracket to make things easy for the math and you have $1,000 profit. There are some things you need to think about. This goes for mortgages too.

You have a 1k profit so your taxes would be $300 at 30%

Now you are going to need money come spring when things finally thaw out up there again.

So you want to spend $1,000 just so you don't have to send the government $300?

Same goes for not paying off mortgages, you would spend 10k in interest to a bank every year just so you don't have to pay the government 3k?

Just something to think about.
__________________
Pat
Reply With Quote
  #5  
Old 07-16-2011, 07:13 AM
Ducke's Avatar
Ducke Ducke is offline
Senior Member
 
Join Date: Nov 2010
Location: The Duck Pond
Posts: 844
Rep Power: 4
Ducke is on a distinguished road
Default

Quote:
Originally Posted by Steve View Post
Let me pick your brain for a moment on this because I think this is a very important topic many many new lawn care business owners deal with.

Are you leaning towards one or the other?

What's your view on the pro's and con's of each?
I would like to be able to show a profit at my year end Just to be able to show the kind of success I have had.

Not sure of the pro's and Con's yet this is why I asked the question.
I suppose having a profit will cost me money while breaking even won't ???
I not really sure at this point but maybe I will be enlighten in the coming days.
__________________
Ducke's lawn Care and Introducing Duck's Seasonal Decor.
Reply With Quote
  #6  
Old 07-16-2011, 07:15 AM
Ducke's Avatar
Ducke Ducke is offline
Senior Member
 
Join Date: Nov 2010
Location: The Duck Pond
Posts: 844
Rep Power: 4
Ducke is on a distinguished road
Default

Quote:
Originally Posted by bruces View Post
its a hard question to answer .If you have money in the bank ,you will have an easier time getting a loan ,mortgage etc. ,if you have no money you will pay less taxes but not have any luck when you darken the door of your bank looking for money to buy something with .Talk to an accountant because either situation has benefits and issues to deal with .
This is not an issue with me as I am operating on a cash on hand bases, I did not borrow any money to start up and am not planning on becoming a Mega million Landscaper either.
__________________
Ducke's lawn Care and Introducing Duck's Seasonal Decor.
Reply With Quote
  #7  
Old 07-16-2011, 07:19 AM
Ducke's Avatar
Ducke Ducke is offline
Senior Member
 
Join Date: Nov 2010
Location: The Duck Pond
Posts: 844
Rep Power: 4
Ducke is on a distinguished road
Default

Quote:
Originally Posted by The Cleaning Doctor View Post
Let's put it another way. Say you are in a 30% tax bracket to make things easy for the math and you have $1,000 profit. There are some things you need to think about. This goes for mortgages too.

You have a 1k profit so your taxes would be $300 at 30%

Now you are going to need money come spring when things finally thaw out up there again.

So you want to spend $1,000 just so you don't have to send the government $300?

Same goes for not paying off mortgages, you would spend 10k in interest to a bank every year just so you don't have to pay the government 3k?

Just something to think about.
I understand what your saying but wouldn't it be nicer to put the $300.00 toward a new weed Whacker instead of giving it to some politician to have a steak dinner ?
__________________
Ducke's lawn Care and Introducing Duck's Seasonal Decor.
Reply With Quote
  #8  
Old 07-16-2011, 05:50 PM
picframer's Avatar
picframer picframer is offline
Andy
 
Join Date: Jan 2009
Location: Halifax, Nova Scotia
Posts: 2,885
Rep Power: 9
picframer will become famous soon enough
Default

Having cash in the bank has nothing to do with the tax you pay, here in Canada.

You pay tax's on your net income after depreciation, depreciation in Canada has various rates depending on the piece of equipment and CCRA's estimate on it's expected life.

A company should always have retained earnings at year end which forms working capital in the new year.
__________________
Andy
Halifax, Nova Scotia
Reply With Quote
  #9  
Old 07-16-2011, 05:55 PM
picframer's Avatar
picframer picframer is offline
Andy
 
Join Date: Jan 2009
Location: Halifax, Nova Scotia
Posts: 2,885
Rep Power: 9
picframer will become famous soon enough
Default

Quote:
Originally Posted by Ducke View Post
I would like to be able to show a profit at my year end Just to be able to show the kind of success I have had.

Not sure of the pro's and Con's yet this is why I asked the question.
I suppose having a profit will cost me money while breaking even won't ???
I not really sure at this point but maybe I will be enlighten in the coming days.
There is a big difference between operating income and net income. Operating income is above the line and what a bank would look at if going for a loan or what a buyer of your company would look at.

Your comment on Interest VS tax's on Mortgages here in Canada is a lot more complicated than that.

You can apportion a percentage of your home towards the business and deprecate that portion to reduce your taxable income, should you sell your house it's a taxable capital gain at a business rate which is far less than income tax rates.
__________________
Andy
Halifax, Nova Scotia
Reply With Quote
  #10  
Old 07-17-2011, 07:45 AM
Ducke's Avatar
Ducke Ducke is offline
Senior Member
 
Join Date: Nov 2010
Location: The Duck Pond
Posts: 844
Rep Power: 4
Ducke is on a distinguished road
Default

Quote:
Originally Posted by picframer View Post
There is a big difference between operating income and net income. Operating income is above the line and what a bank would look at if going for a loan or what a buyer of your company would look at.

Your comment on Interest VS tax's on Mortgages here in Canada is a lot more complicated than that.

You can apportion a percentage of your home towards the business and deprecate that portion to reduce your taxable income, should you sell your house it's a taxable capital gain at a business rate which is far less than income tax rates.
WHAAAAA See I knew if the government was involved it had to get complected. But I understand a bit better now.
__________________
Ducke's lawn Care and Introducing Duck's Seasonal Decor.
Reply With Quote
Reply

Bookmarks

Thread Tools Search this Thread
Search this Thread:

Advanced Search

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is On
Forum Jump

Similar Threads
Thread Thread Starter Forum Replies Last Post
"Part Timers", "Low Ballers" & Self Employed doug1980 General Talk 22 07-24-2011 05:32 PM
Starting a Lawn Care Business with "Lawns of Wealth" startlawnbusiness Promote your products or services 0 09-08-2010 03:29 PM
Have you seen "Simply Mowing" door hanger/flyer template? akg62 Starting a lawn care business. 1 04-17-2009 02:02 PM
NEEDED: 1 landscaping company to profile LocalAdLink's "Geo-targeting" advertising Green_Day Promote your products or services 10 04-08-2009 09:48 PM

» Recent Threads
  RatingTitle, Username, & Date Last Post Replies Views
Brake job!
kslawn
08-30-2014 07:49 AM
Today 05:57 PM
by 04bluesilverado
5 128
Trailer tires
J.A.S.LawnService
Today 10:17 AM
Today 11:39 AM
by stevef1201
1 34
snowplowing
jshak40
Today 07:20 AM
Today 11:37 AM
by stevef1201
3 64
Walk Behinds and Texas...
SGL1
08-26-2014 03:53 PM
Today 09:52 AM
by mattthelawnguy
6 210
Mowing 7 acres
avetslawncare
Yesterday 04:24 PM
Yesterday 05:55 PM
by stevef1201
3 88
Help pricing cut down 7...
Bradcook21
08-26-2014 11:17 PM
Yesterday 04:48 PM
by avetslawncare
6 208
New to the industry-...
Lsmain
Yesterday 10:53 AM
Yesterday 10:53 AM
by Lsmain
0 60
Sod
RosalesLawnCare
08-27-2014 03:47 PM
08-30-2014 07:00 PM
by RosalesLawnCare
2 148
Lawn Route Templates
Landscaper1165
08-30-2014 01:52 PM
08-30-2014 05:04 PM
by stevef1201
1 91
Exmark Lazer Z S-Series...
BLC7
08-22-2014 10:18 AM
08-30-2014 09:49 AM
by BLC7
10 391
Hello! New here and...
CaliforniaFriendly
08-29-2014 11:30 AM
08-29-2014 05:39 PM
by jrs.landscaping
1 114
Stihl engine isn't...
Marcintosh
08-12-2014 08:30 PM
08-28-2014 09:28 PM
by Marcintosh
12 526
Hello
jawnebgoode
08-28-2014 08:37 PM
08-28-2014 08:37 PM
by jawnebgoode
0 56
Hello from Ohio
kurtwin
08-28-2014 05:06 PM
08-28-2014 05:06 PM
by kurtwin
0 78
Softball field
kslawn
08-15-2014 09:28 AM
08-28-2014 12:01 PM
by Steve
16 611
Lawn needs top soil What...
jymie
08-26-2014 11:01 AM
08-28-2014 11:58 AM
by Steve
5 212
Say Hello !!!
Steve
03-19-2007 11:18 AM
08-27-2014 08:33 PM
by kurtwin
1,187 331,253
These are the days on...
ExtremeLawncareServices
03-22-2014 09:12 AM
08-26-2014 04:21 PM
by ExtremeLawncareServices
110 6,639
How do I approach...
Bradcook21
08-21-2014 01:48 AM
08-26-2014 05:08 AM
by Billy Goat
12 513
Tender Process
M2Dave
08-24-2014 12:31 PM
08-25-2014 04:14 PM
by Steve
2 188
Grass hopper mower
ExtremeLawncareServices
12-05-2013 08:51 AM
08-25-2014 04:02 PM
by Steve
26 3,848
Need help pricing basic...
Bradcook21
08-22-2014 01:21 AM
08-22-2014 01:05 PM
by Steve
2 280
Yearly contract Pricing
jrob0691
08-21-2014 08:57 AM
08-22-2014 01:01 PM
by Steve
6 359
yearly contract help...
jrob0691
08-21-2014 04:09 PM
08-22-2014 12:48 PM
by Steve
1 231
Pampas bushes
Bradcook21
08-22-2014 01:30 AM
08-22-2014 07:17 AM
by grassdoctore
1 201
2014 Gie-expo
ExtremeLawncareServices
08-19-2014 11:22 PM
08-21-2014 08:50 PM
by phlawncare
2 243
Fuel Can Spouts
Shark1611
08-16-2014 09:09 AM
08-21-2014 08:23 PM
by SGL1
11 485
Have you ever had to...
SouthernRootsLawnCare
07-26-2014 02:41 PM
08-21-2014 05:03 PM
by stevef1201
6 748
Hello
M2Dave
08-21-2014 12:32 AM
08-21-2014 01:38 PM
by Steve
1 208
New Landscaping Business
rekon32
08-16-2014 02:26 PM
08-21-2014 12:33 PM
by SouthallMowing
8 546
Downed Tree Chop Bid
WesleySnips
08-16-2014 03:47 PM
08-20-2014 01:44 PM
by SGL1
10 515
60 inch honda/bunton...
pblawncare
08-17-2014 11:30 AM
08-18-2014 03:19 PM
by Steve
2 259
Replacement Parts -...
nicholas-KC
08-16-2014 08:40 AM
08-18-2014 03:16 PM
by Steve
4 369
Preparing the soil
Billy Goat
08-16-2014 06:18 PM
08-18-2014 03:01 PM
by Steve
1 280
What to pay help
phlawncare
08-04-2014 08:33 PM
08-18-2014 10:33 AM
by jrs.landscaping
29 1,110
Hello
Jeff1
08-07-2014 11:18 PM
08-15-2014 11:53 PM
by Jeff1
11 571
Lie #2 RESIDENTIAL...
ExtremeLawncareServices
01-06-2014 05:02 AM
08-15-2014 01:46 PM
by mattthelawnguy
54 6,683
Need help 30 HP koler...
Shady Grady
08-01-2014 03:31 PM
08-15-2014 08:46 AM
by kslawn
18 747
New Boomless Sprayer!
BlackRain75
01-03-2014 01:01 PM
08-14-2014 02:37 AM
by BlackRain75
12 1,940
first year update
cmdlawncare
08-12-2014 05:41 PM
08-13-2014 03:29 PM
by Steve
1 374
Hello from Jacksonville,...
JM Lawn Care
08-10-2014 07:15 AM
08-13-2014 07:04 AM
by Sprinkler Buddy
9 491
Hello everyone new to...
maddyandrays
08-11-2014 04:51 PM
08-12-2014 08:58 PM
by Shark1611
2 326
Walk behinds
hpruitcei
08-07-2014 06:28 PM
08-12-2014 02:35 PM
by mattthelawnguy
7 594
New name help
stevef1201
08-10-2014 04:27 PM
08-12-2014 12:03 PM
by Steve
6 480
my little green dilemmas
Lawn Techie
08-03-2014 11:47 AM
08-11-2014 01:20 PM
by Steve
7 573
what the best...
CleanCutsLLC
08-02-2014 01:02 AM
08-11-2014 01:16 PM
by Steve
6 629
Texas lawn care company...
Livingston Lawn Care
07-25-2014 11:29 AM
08-11-2014 01:19 AM
by ExtremeLawncareServices
13 884
Covering all the bases
janslawncare
08-08-2014 10:11 AM
08-08-2014 01:41 PM
by Steve
1 419
New from Florida
ADE
08-06-2014 08:40 PM
08-08-2014 01:32 PM
by Steve
4 484
JOB - Landscape Install...
janslawncare
08-08-2014 10:06 AM
08-08-2014 10:06 AM
by janslawncare
0 374
» Popular Tags
4wd ads auger birdscaping charge collections subcontractor craigslist customers ecosymbiosis estimate exmark fall ferris first truck franchise gopherhaul grass gravely hardscapes hills holiday honda how much to charge how to bid introduction invoice john deere quik trac kawasaki labor cost landscape services late lawn lawn care lawn care busines plan lawn care business seo lawn care business show lawn care business website lawn care business website seo lawn care website lawn service leaf cleanup lesco lighting marketing mowing mulch estimate new buisness new mower patio install podcast promotion pto reo rotating scag scripts season seo starting a business starting a lawn care business start up lawn care business steve stihl theft theft of services tips toro toro grand stand trailer walker
Powered by vBadvanced CMPS v3.1.0

All times are GMT -5. The time now is 06:39 PM.


(C) 2011 Riggs Publications - Terms of use & Privacy Policy

All times are GMT -5. The time now is 06:39 PM.

(C) 2011 Riggs Publications - Terms of use & Privacy Policy