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, 09:12 PM
Ducke's Avatar
Ducke Ducke is offline
Senior Member
 
Join Date: Nov 2010
Location: The Duck Pond
Posts: 844
Rep Power: 5
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, 09:48 PM
Steve's Avatar
Steve Steve is online now
Administrator
 
Join Date: May 2003
Posts: 36,614
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, 11:14 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, 11:22 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, 08:13 AM
Ducke's Avatar
Ducke Ducke is offline
Senior Member
 
Join Date: Nov 2010
Location: The Duck Pond
Posts: 844
Rep Power: 5
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, 08:15 AM
Ducke's Avatar
Ducke Ducke is offline
Senior Member
 
Join Date: Nov 2010
Location: The Duck Pond
Posts: 844
Rep Power: 5
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, 08:19 AM
Ducke's Avatar
Ducke Ducke is offline
Senior Member
 
Join Date: Nov 2010
Location: The Duck Pond
Posts: 844
Rep Power: 5
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, 06:50 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, 06:55 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, 08:45 AM
Ducke's Avatar
Ducke Ducke is offline
Senior Member
 
Join Date: Nov 2010
Location: The Duck Pond
Posts: 844
Rep Power: 5
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 06:32 PM
Starting a Lawn Care Business with "Lawns of Wealth" startlawnbusiness Promote your products or services 0 09-08-2010 04:29 PM
Have you seen "Simply Mowing" door hanger/flyer template? akg62 Starting a lawn care business. 1 04-17-2009 03:02 PM
NEEDED: 1 landscaping company to profile LocalAdLink's "Geo-targeting" advertising Green_Day Promote your products or services 10 04-08-2009 10:48 PM

» Recent Threads
  RatingTitle, Username, & Date Last Post Replies Views
Say Hello !!!
Steve
03-19-2007 12:18 PM
Yesterday 10:30 PM
by Just Cuts
1,194 348,730
Contract or no contract?
TRV
11-20-2014 09:18 PM
Yesterday 09:23 PM
by stevef1201
5 261
Good help is hard to find
Hanks Lawn Care Services
11-19-2014 03:27 PM
Yesterday 09:16 PM
by stevef1201
9 327
New parking area
ExtremeLawncareServices
11-07-2014 09:47 PM
Yesterday 07:32 PM
by ExtremeLawncareServices
4 431
These are the days on...
ExtremeLawncareServices
03-22-2014 10:12 AM
Yesterday 07:22 PM
by ExtremeLawncareServices
178 14,243
Hello from Kentucky
TRV
09-30-2014 06:42 PM
Yesterday 07:16 PM
by ExtremeLawncareServices
10 1,387
Pics for website
tbtigers03
11-21-2014 05:40 PM
Yesterday 12:12 PM
by Just for Cuts
5 229
Hi from IL
steveinil
11-25-2014 02:07 PM
Yesterday 11:21 AM
by Steve
1 60
WNY saying Hi.
Sargewesser
11-25-2014 07:27 AM
Yesterday 11:20 AM
by Steve
1 66
How to: Use Thumbtack...
acrajchel
11-17-2014 06:39 PM
Yesterday 11:19 AM
by Steve
18 640
Peco Bagger
AGPS
11-18-2014 02:20 PM
Yesterday 10:58 AM
by Steve
10 394
Beginner Mistakes:...
Steve
01-31-2007 12:45 PM
Yesterday 10:57 AM
by Steve
22 6,279
Hi to you NOTHERNERS
stevef1201
11-11-2014 05:56 PM
Yesterday 10:42 AM
by Steve
5 390
Billboards for marketing
ExtremeLawncareServices
11-16-2014 08:39 PM
Yesterday 10:40 AM
by Steve
14 456
leaf removal
Double J LLC
10-03-2014 05:24 PM
Yesterday 01:08 AM
by ExtremeLawncareServices
25 2,583
How much do you up sell...
Essex Groundskeeping
11-23-2014 07:13 PM
11-24-2014 06:29 PM
by stevef1201
8 218
This sucks...
Matther777
09-18-2014 05:56 PM
11-24-2014 05:49 PM
by biglee
16 3,247
Pressure Washing...
WesleySnips
07-31-2014 07:13 PM
11-24-2014 04:32 PM
by acrajchel
4 692
New website
Chilehead
11-20-2014 04:39 PM
11-23-2014 07:40 PM
by Just for Cuts
12 346
My site is on fronts page
tbtigers03
11-14-2014 05:58 PM
11-22-2014 10:49 PM
by Just for Cuts
16 567
Belt dealer problem
googus
11-21-2014 08:45 AM
11-21-2014 06:36 PM
by Steve
2 180
What is going on with...
biglee
11-14-2014 03:04 PM
11-20-2014 02:50 PM
by biglee
40 1,034
My advice for new guys
avetslawncare
11-15-2014 09:32 AM
11-19-2014 01:47 PM
by biglee
10 577
Lawn Care business...
crieg122
10-23-2014 02:23 PM
11-19-2014 12:39 PM
by acrajchel
28 1,943
raking leaves ?
robert8509
10-22-2014 10:19 PM
11-18-2014 04:24 PM
by acrajchel
14 1,521
Leaf removal
madmedic8575
10-24-2014 05:14 PM
11-17-2014 07:34 PM
by acrajchel
6 1,253
sod job
SGlawncare
10-30-2014 09:21 PM
11-17-2014 07:10 PM
by acrajchel
7 841
Customer wants me to...
Mr. Mow
11-09-2014 07:13 AM
11-17-2014 06:48 PM
by acrajchel
10 621
Hello!
Brian3137
11-11-2014 07:15 PM
11-17-2014 06:46 PM
by acrajchel
14 545
small biz in Phoenix,AZ
anthonyramos1
11-08-2014 09:35 PM
11-17-2014 05:59 PM
by acrajchel
2 386
Client won't pay...
WesleySnips
10-30-2014 03:53 PM
11-17-2014 05:37 PM
by acrajchel
22 1,458
Government contracts
avetslawncare
11-15-2014 08:50 AM
11-17-2014 12:59 PM
by Steve
2 317
Need help on deciding a...
Brian3137
11-10-2014 06:32 PM
11-17-2014 12:44 PM
by Steve
12 586
West cost lawn prices
SGlawncare
10-09-2014 10:51 PM
11-16-2014 07:54 AM
by stevef1201
8 1,668
So how do you guys...
Mr. Mow
10-26-2014 08:55 AM
11-15-2014 08:44 AM
by avetslawncare
14 1,786
Truck, Trailer,...
hawthornelawncare
12-23-2011 01:01 AM
11-13-2014 08:35 AM
by jrs.landscaping
81 31,953
The most dangerous part...
Steve
10-06-2014 03:45 PM
11-12-2014 05:05 PM
by stevef1201
14 1,765
A little hang up in snow...
stevef1201
11-08-2014 07:05 AM
11-12-2014 12:51 PM
by Steve
4 504
Bi-weekly winter...
lxarth
11-04-2014 08:37 PM
11-12-2014 10:06 AM
by WesleySnips
9 707
taking first steps...
sizemorelawncare
11-10-2014 08:24 PM
11-11-2014 01:21 PM
by Steve
1 394
Back Pack Blower
Ian Lovejoy
11-09-2014 08:41 AM
11-11-2014 08:12 AM
by Just for Cuts
4 451
Business Cards
crieg122
10-25-2014 01:03 PM
11-11-2014 07:56 AM
by Just for Cuts
12 1,404
How the unregister?
alive101
11-04-2014 07:39 AM
11-10-2014 01:48 PM
by Steve
4 671
Belt adjustment question
googus
11-05-2014 06:43 AM
11-10-2014 01:38 PM
by Steve
5 569
Podcast
Shark1611
11-07-2014 05:42 PM
11-10-2014 11:41 AM
by Steve
1 370
hi, from Minnesota
rjklohn
11-07-2014 02:21 AM
11-07-2014 01:44 PM
by Steve
1 391
New to snow plowing
SS.Lawncare
11-05-2014 04:00 PM
11-07-2014 01:21 PM
by Steve
6 651
New Member
tonyap
11-05-2014 10:35 PM
11-07-2014 01:15 PM
by Steve
1 428
New to the business
jcurr33
11-05-2014 03:21 PM
11-07-2014 01:11 PM
by Steve
1 486
Lines
Matther777
11-04-2014 02:19 PM
11-07-2014 12:54 PM
by Steve
1 529
» Popular Tags
2wd 4x4 apartment complex bark bob villa care charge christmas collections edging employee problems equipment rental exmark ferris four wheel drive gopherhaul grass gravely hardscapes hills holiday how much to charge how to bid husqvarna hydraulic jobs kawasaki labor cost landscape services lawn lawn care lawn care business podcast lawn care business seo lawn care business show lawn care business website lawn care business website seo lawn care website lighting lighting brass outdoor lights managing a lawn care business mowing mr dave mulch mulch estimate new buisness past due per hour service podcast push versus ride redmax savannah scag v-ride scripts search engine optimization seo shell small engine repair sprayer starting a business starting a lawn care business sulky theft toro tractor auger trailer trimmer rack up sell employee walker wood wright stander rh
Powered by vBadvanced CMPS v3.1.0

All times are GMT -5. The time now is 12:16 AM.


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

All times are GMT -5. The time now is 12:16 AM.

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