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: 37,947
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: 7
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: 11
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: 11
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
Hello from Alabama
pruzilla
Yesterday 01:20 PM
Today 08:14 AM
by pruzilla
2 26
Buy Email Lists For...
hasanali
Today 03:47 AM
Today 03:47 AM
by hasanali
0 17
To Creating an Email...
asialipi22
Today 12:17 AM
Today 12:17 AM
by asialipi22
0 25
Get to Any Business...
usaemaillist
Today 12:10 AM
Today 12:10 AM
by usaemaillist
0 22
Hello from Centreville!
Daveylawns
05-23-2016 09:04 AM
05-24-2016 04:08 PM
by Steve
1 60
Laying new grass, Sod...
WarriorLandscapingCAN
05-23-2016 10:07 AM
05-23-2016 08:41 PM
by Steve
1 49
I need some aeration...
rootytalbot
08-14-2015 12:32 PM
05-23-2016 09:06 AM
by Daveylawns
10 3,757
To mow weekly or Biweekly
WarriorLandscapingCAN
05-11-2016 04:09 PM
05-22-2016 11:45 AM
by jrs.landscaping
8 271
Prolin
rmccutchan
05-21-2016 04:53 PM
05-21-2016 06:36 PM
by rmccutchan
2 66
Upgraded to a new mower
Stevenor92
05-17-2016 08:17 PM
05-20-2016 07:08 PM
by Stevenor92
8 192
Intro
LaraRahmani
05-18-2016 02:54 PM
05-19-2016 02:43 PM
by Steve
2 104
Best Push Mower You Have...
markty
05-14-2016 03:46 PM
05-18-2016 07:34 PM
by Stevenor92
4 177
New mower!!!!
Stevenor92
05-18-2016 03:46 AM
05-18-2016 06:39 PM
by Stevenor92
2 107
Say Hello !!!
Steve
03-19-2007 11:18 AM
05-18-2016 02:59 PM
by LaraRahmani
1,249 434,621
Stupid idea?
hopolb33
05-13-2016 11:25 AM
05-16-2016 11:22 AM
by Steve
1 149
Planting SKYBOUND CEDARS
FrankieeLawnz
05-13-2016 03:59 PM
05-16-2016 11:21 AM
by Steve
1 133
Edging Fad...
Tree geek
05-10-2016 11:29 PM
05-15-2016 11:12 PM
by Tree geek
2 180
Business Overload
Chilehead
05-06-2016 09:27 PM
05-13-2016 11:15 AM
by Steve
11 372
Hello from great state...
Cel1980
05-11-2016 09:00 AM
05-13-2016 11:07 AM
by Steve
2 151
Did this job free to...
JJand M Lawncare
05-02-2016 02:33 PM
05-11-2016 03:54 PM
by JJand M Lawncare
10 416
How to tell Cust. to...
GeeGood
04-09-2008 09:55 PM
05-09-2016 07:08 PM
by JJand M Lawncare
16 5,506
Echo SRM 230 trouble.
Jack Rabbit
05-08-2016 06:16 PM
05-08-2016 11:22 PM
by Just for Cuts
1 145
Toro ZTR Issues
rsanchez1203
05-06-2016 09:27 PM
05-07-2016 10:26 AM
by Steve
2 167
Correct way to quote a...
WarriorLandscapingCAN
05-02-2016 11:52 AM
05-03-2016 10:59 AM
by Steve
1 279
Having an issue with...
Mr. Mow
04-27-2016 03:58 PM
04-28-2016 05:04 AM
by Sprinkler Buddy
2 284
Hello From Virginia
JJand M Lawncare
04-25-2016 01:02 PM
04-27-2016 05:20 PM
by Steve
5 327
» Popular Tags
advertising become an entrepreneur best mower be your own boss break business education business help business management buy email database contractor hacks deck lift dethatcher edging email campaigns email database email database lists email databases for sale email list email lists email lists for sale entrepreneur entrepreneur education estimates free lawn care fuel problems fuel pump half moon blade hydro increase customers jjandm lawncare landscape landscape design landscaping landscaping design company landscaping richmond va landscping lawncare lawn mowing lawnservice lowering grade marketing mulch new business planting plowing raising grade residential lawn care richmond va richmond virginia lawn care roundup safety scag snowblower snow plowing snow shovel solo solo backpack sprayer start a business start a lawn care business start business start up swzt toro timecutter tree tree pics tree service usa email list video walk behind what to charge work from home
Powered by vBadvanced CMPS v3.1.0

All times are GMT -5. The time now is 08:49 AM.


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

All times are GMT -5. The time now is 08:49 AM.

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