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
new member
 
Join Date: Nov 2010
Location: The Duck Pond
Posts: 844
Rep Power: 0
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 ?
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: 37,343
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: 6
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
new member
 
Join Date: Nov 2010
Location: The Duck Pond
Posts: 844
Rep Power: 0
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.
Reply With Quote
  #6  
Old 07-16-2011, 07:15 AM
Ducke's Avatar
Ducke Ducke is offline
new member
 
Join Date: Nov 2010
Location: The Duck Pond
Posts: 844
Rep Power: 0
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.
Reply With Quote
  #7  
Old 07-16-2011, 07:19 AM
Ducke's Avatar
Ducke Ducke is offline
new member
 
Join Date: Nov 2010
Location: The Duck Pond
Posts: 844
Rep Power: 0
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 ?
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: 10
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: 10
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
new member
 
Join Date: Nov 2010
Location: The Duck Pond
Posts: 844
Rep Power: 0
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.
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 43 01-27-2015 08:01 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
More Rain or Less?
Steve
05-20-2015 12:06 PM
Today 04:37 PM
by SGL1
12 209
uploading video on here?
holymoly
Today 08:13 AM
Today 10:26 AM
by Matther777
1 31
What a JERK!
Chilehead
05-06-2015 08:13 AM
Today 08:23 AM
by luckylogger
10 607
new here ! need help
pgrace
Yesterday 11:29 PM
Yesterday 11:29 PM
by pgrace
0 37
Equipment dealers
mattthelawnguy
05-21-2015 04:33 PM
Yesterday 10:24 PM
by Chilehead
3 92
Irrigation
pboy8634
02-21-2010 12:46 PM
05-22-2015 10:05 PM
by biglee
25 8,409
Beginner Mistakes:...
Steve
01-31-2007 11:45 AM
05-22-2015 09:58 PM
by biglee
37 9,082
What's your next...
Steve
05-15-2015 11:54 AM
05-21-2015 11:23 PM
by biglee
13 340
Peace garden ideas
SGL1
05-13-2015 03:15 PM
05-21-2015 07:51 PM
by avetslawncare
16 479
Show us your stripes
Just for Cuts
05-21-2015 03:07 PM
05-21-2015 03:07 PM
by Just for Cuts
0 80
problems with a customer
LawnCareMan280
05-19-2015 06:28 PM
05-21-2015 02:58 PM
by Just for Cuts
4 153
These are the days on...
ExtremeLawncareServices
01-11-2015 10:41 AM
05-20-2015 09:18 PM
by ExtremeLawncareServices
84 6,768
Total yard rehab
SGL1
04-23-2015 03:59 PM
05-19-2015 08:22 PM
by SGL1
15 793
Say Hello !!!
Steve
03-19-2007 11:18 AM
05-19-2015 04:12 PM
by NinaMarie86
1,223 389,294
New Lawn Service
carmelitaslawnservice
05-19-2015 10:02 AM
05-19-2015 02:51 PM
by Steve
1 106
Landscaper Jailed After...
SGL1
05-18-2015 08:15 AM
05-19-2015 02:37 PM
by Steve
5 201
Pictures of commercial...
avetslawncare
04-01-2015 09:47 PM
05-19-2015 02:29 PM
by Steve
38 1,972
feeling like im being...
Bradcook21
05-17-2015 07:33 AM
05-19-2015 02:11 PM
by Steve
6 210
good news yesterday
Bradcook21
05-17-2015 07:08 AM
05-19-2015 06:16 AM
by Bradcook21
3 141
ignition coil
jasonw
05-12-2015 05:31 PM
05-18-2015 12:07 PM
by Steve
3 262
Anyone need help? I have...
biglee
05-06-2015 12:22 PM
05-18-2015 12:06 PM
by Steve
13 673
Big (to me) mulch job
tl757
04-23-2015 05:32 PM
05-15-2015 08:46 PM
by biglee
22 1,482
big dog mowers?
Bradcook21
05-13-2015 04:03 PM
05-14-2015 10:55 AM
by Steve
4 285
Small HOA Bid
lxarth
05-06-2015 10:37 PM
05-13-2015 11:55 AM
by Steve
9 502
New company in Michigan
SEM
04-24-2015 09:27 PM
05-13-2015 11:51 AM
by Steve
11 641
Fired for refusing to...
Mr. Mow
05-09-2015 06:15 AM
05-12-2015 01:36 PM
by Steve
6 498
I have ZERO confidence...
Just for Cuts
05-01-2015 04:24 PM
05-12-2015 03:53 AM
by jrs.landscaping
31 1,083
landscape insurance
clarkslawn
03-30-2015 10:14 PM
05-11-2015 01:15 PM
by Steve
6 1,018
String trim BEFORE mow...
Mr. Mow
04-12-2015 08:13 AM
05-10-2015 07:50 PM
by ExtremeLawncareServices
9 1,045
Bought my first STIHL...
Mr. Mow
05-09-2015 06:29 AM
05-10-2015 08:36 AM
by Mr. Mow
9 411
advice wanted please and...
CHenricks
05-07-2015 08:40 PM
05-08-2015 04:20 PM
by CHenricks
7 430
Hello
SallyBorowicz
05-06-2015 11:14 AM
05-08-2015 02:21 PM
by Steve
3 340
Mower Advice
tl757
05-06-2015 02:31 PM
05-08-2015 01:45 PM
by Steve
6 464
Home today...Still...
biglee
05-06-2015 11:59 AM
05-07-2015 12:06 PM
by biglee
2 339
I'm Back With The Best...
aduttonater
02-21-2015 12:41 AM
05-07-2015 11:17 AM
by Steve
79 3,951
color fliers?
holymoly
04-18-2015 02:32 PM
05-07-2015 10:57 AM
by Steve
16 1,029
Looking good
mrsmichigan
05-06-2015 09:47 AM
05-07-2015 10:53 AM
by Steve
1 290
What are your biggest...
Steve
05-05-2015 01:24 PM
05-07-2015 10:52 AM
by Steve
2 336
is craiglist good to...
JBENI
04-16-2015 11:11 AM
05-06-2015 07:15 PM
by TheYardGuy
12 1,101
Go daddy web site and...
jcurr33
05-04-2015 06:00 PM
05-05-2015 11:57 AM
by Steve
2 366
How busy are you now?
Steve
05-04-2015 01:10 PM
05-05-2015 11:47 AM
by Steve
4 401
mowfinder
scaypa
04-27-2015 05:44 PM
05-04-2015 01:14 PM
by Steve
1 433
Latest video, Facebook...
Sprinkler Buddy
05-01-2015 06:54 AM
05-04-2015 01:09 PM
by Steve
3 398
weed
avetslawncare
04-16-2015 07:56 PM
05-01-2015 11:38 AM
by Steve
8 815
so i need somehelp with...
dalvan0
04-28-2015 07:43 PM
04-30-2015 10:55 PM
by avetslawncare
3 712
Anyone have a Lawn Care...
nishirandall
04-28-2015 08:45 PM
04-30-2015 12:00 AM
by Steve
1 476
mowing pic
joshlawncare
04-25-2015 12:34 PM
04-29-2015 10:55 PM
by Steve
5 579
Help with a truck
bdodson89
04-27-2015 08:15 PM
04-29-2015 10:47 PM
by Steve
4 472
Ford F250 Wheel loaders...
jrs.landscaping
04-28-2015 05:34 AM
04-29-2015 07:47 AM
by jrs.landscaping
2 433
Correct me if I'm wrong...
SGL1
04-26-2015 02:41 PM
04-28-2015 06:57 AM
by SGL1
12 610
» Popular Tags
ad landscaping apartment complex auger bark billy goat brushcutter blades blowout bob villa collections commercial contract help curb appeal services demonstration design edging employee problems equipment dealer equipment rental facebook ferris flyers foreman grass growing a lawn care business hardscapes hills hiring husqvarna hydraulic landscape services lawn aeration lawn care lawn mowing marketing marketing secrets more customers business mr dave ordinance past due patio install per hour charge pricing profit on employee pto push versus ride running a business scag v-ride scripts secrets to landscaping seo shell shreaded small engine repair sq ft square foot sulky toro grand stand tractor auger trailer trailer mate pro tree trimmer rack truck new used landscape web design website website design winterization won't return wright stander rh www.greenturion.co.za
Powered by vBadvanced CMPS v3.1.0

All times are GMT -5. The time now is 08:01 PM.


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

All times are GMT -5. The time now is 08:01 PM.

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