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.

7 Tax Tips for the Self Employed


General Business Discussions

A place to talk about general business discussions.
Reply
 
Thread Tools Search this Thread
  #1  
Old 03-09-2009, 08:52 PM
VPS Lawn Care
Guest
 
Posts: n/a
Default 7 Tax Tips for the Self Employed

7 Tax Tips for the Self Employed
Posted on: Mar 3, 2009 Share with friend

Posted by: SBOCTeam
Being self-employed is a dream for many people. Who doesn't want to be his or her own boss? Of course, the downside of being the boss is the all responsibilities that come with the job. Unfortunately, calculating and paying taxes are part of those responsibilities.

By Christopher Freeburn
According to the Internal Revenue Service (IRS), you are considered self-employed "if you are in business for yourself, or carry on a trade or business as a sole proprietor or an independent contractor." The IRS requires self-employed individuals to pay a Self-Employment Tax, which assesses Social Security and Medicare taxes similar to those paid by employees and their firms. The IRS also requires self-employed people to pay estimated taxes as a substitute for the withholding taxes that are applied against employed person's salaries. These factors make complying with self-employment taxes rules somewhat more complicated than the rules that apply to the employed.

With that in mind, here are some tax tips for the self-employed:

1. Consult a CPA. Even if you are intent on doing everything yourself, it is better to seek outside help than make a mistake when preparing your taxes. An error on your tax returns can result in escalating fines and penalties from the IRS. Tax law is complicated, particularly when it comes to self-employment. To be certain you are in compliance with all relevant requirements, talk to a certified public accountant and review your situation. A CPA will be familiar with the federal, state and local tax laws that apply to you. Additionally, a CPA may be able to point out tax liabilities and deductions that you hadn't considered.

2. Keep good records. Good record keeping is more than simply a good business practice; it is a necessity when it comes to dealing with the IRS, which may demand to see every last detail of your income and expenses, particularly when you claim deductions on your tax return. If you are ever audited-and being self-employed makes that more likely-you will need to have every receipt and document to support your claims. Otherwise, fines and penalties will accrue. Get in the habit of saving everything, and develop a filing system that allows you to retrieve needed documents quickly.

3. Deduct the cost of medical insurance. Self-employed people can deduct up to 100% of medical insurance premiums paid for medical insurance for themselves, spouses, or dependents. Medical insurance costs are deducted directly from total income.

4. Deduct all business expenses. Every drop of toner you buy for your printers, reams of paper, shipping expenses, postage, software, pens and pads, and anything else you use for your business is an expense that can be deducted. Be sure to save every receipt to back up your claimed deduction. Also be sure that you can justify the claim that the items or services purchased were used directly for your business.

5. Increase expenses to lower taxable income. As the end of the year approaches, you can increase you deductions against this year's income by making business purchases now. Need another printer, or PC? Better desk or cushy new office chair? Buying it before the end of the year means whatever you spend can be deducted against this year's income taxes.

6. Contribute to your retirement. The options for self-employed people to save for retirement have never been better. If you haven't created a retirement plan for yourself, now is a good time. Payments made to a retirement plan-401(k), IRA, KEOGH, or SEP plan-are deductible against the current year's income. Note that most retirement plans have a contribution limit. Most local banks or financial institutions will be able to help create and maintain your preferred retirement vehicle.

7. Consider the home office deduction. Do you conduct business out of any part of your home? Many small business owners have at least one room devoted to some aspect of their business, whether it is keeping shipping materials in the garage, or maintaining a bedroom that has been converted into an office or filing storage space. With so many small businesses operating partially or completely out of people's homes, the IRS allows small business owners to deduct a portion of rent, mortgage payments, utilities and maintenance for qualifying home offices. The IRS has fairly stringent tests for such deductions, however, and it is advisable to consult a CPA about your particular situation to make certain it qualifies.
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 03-09-2009, 10:26 PM
Steve's Avatar
Steve Steve is online now
Administrator
 
Join Date: May 2003
Posts: 36,982
Rep Power: 10
Steve has disabled reputation
Default

Lawn care business tipsLawn Care Business Book
Quote:
Deduct the cost of medical insurance. Self-employed people can deduct up to 100% of medical insurance
This is very interesting!


Quote:
5. Increase expenses to lower taxable income. As the end of the year approaches, you can increase you deductions against this year's income by making business purchases now. Need another printer, or PC?
This is another interesting topic. I think there are two schools of thought on this. One side is you should keep as much as you can and the other is increase expenses.

What's your view on it?
__________________
- 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
Reply With Quote
  #3  
Old 03-10-2009, 12:12 AM
musician/lawnman's Avatar
musician/lawnman musician/lawnman is offline
Chuck
 
Join Date: Feb 2008
Location: South West Florida
Posts: 919
Rep Power: 8
musician/lawnman is on a distinguished road
Default

Hey Steve,
It should be noted that by medical expenses.... that means EVERYTHING.
Insurance premiums, Co-pays for dr. visits, Deductibles, prescriptions, even OTC. drugs, band-aids etc. can often be claimed.

I am going to do my taxes in the morning. I have just under $11,000.00 in medical expenses for my young, healthy family of 4 people. It adds up & you don't want to be paying income taxes on an amount like that if you don't need to.

As far as your question....
I think there's a balance. You shouldn't go blow $15,000 in december fo the hell of it. But if you forsee expenses & purchases you are going to need to make .... why not make them before the end of the year.

I have a friend who's wife is in business for herself. By listening to her you might think that if it's a write off, it was FREE! I've tried to explain but it's like talking to a wall. If you land in say a 28% tax bracket then roughly, you pay 28% of your income to taxes. If you buy a $100 desk & write it off then you don't pay taxes on that $100. It saved you $28. The desk still cost you $72. It's not free. It's better to think of it like a discount on things you buy for your business. The "oh, I'll just write it off" additude can get expensive.
__________________
AAA QUALITY CLEAN CUT, LLC.
LAWN CARE & LANDSCAPING
Visit us here:

  #4  
Old 03-10-2009, 11:47 PM
Steve's Avatar
Steve Steve is online now
Administrator
 
Join Date: May 2003
Posts: 36,982
Rep Power: 10
Steve has disabled reputation
Default

Quote:
It's not free. It's better to think of it like a discount on things you buy for your business. The "oh, I'll just write it off" additude can get expensive.
Very good point. I think all too often the concept of a tax write off gets us to think it is free but it's not. The more we see that, the more we can get a better grasp of what we are doing.
__________________
- 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
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
turning tips for a 36" FourSeasons Community Assistance 3 02-16-2009 04:40 PM
Tips? Steve General Business Discussions 0 12-22-2007 01:20 PM
Tips for Getting PR for Your New Business Steve General Business Discussions 0 06-09-2006 04:19 PM
Blog tips Steve Search Engine Optimization and Website Design Discussions. 3 05-10-2006 08:42 PM
Tips for Your Website ritchiem Search Engine Optimization and Website Design Discussions. 0 01-13-2006 11:00 AM

» Recent Threads
  RatingTitle, Username, & Date Last Post Replies Views
I'm Back With The Best...
aduttonater
02-21-2015 01:41 AM
Today 08:55 PM
by aduttonater
10 492
price for snow clearing?
Bradcook21
02-25-2015 09:11 PM
Today 08:54 PM
by Bradcook21
5 165
rock salt
Bradcook21
02-24-2015 11:17 AM
Today 08:37 PM
by ExtremeLawncareServices
22 459
stubbon people
Bradcook21
02-16-2015 04:25 PM
Today 04:40 PM
by jrs.landscaping
37 1,204
My Newborn son
avetslawncare
Today 01:07 PM
Today 02:18 PM
by Steve
2 43
Facebook
element009
03-23-2011 09:36 AM
Today 11:37 AM
by ExtremeLawncareServices
52 11,770
Blade sharpener
Just for Cuts
07-04-2014 01:31 PM
Yesterday 03:43 PM
by Mr. Mow
15 1,716
viking cyclon.
uppercut
01-29-2015 09:12 PM
Yesterday 02:54 PM
by Steve
5 503
Ugliest lawn contest
Steve
02-23-2015 04:17 PM
Yesterday 02:51 PM
by Steve
2 271
Start LIKING FACEBOOK...
rlclawncare123
Yesterday 01:06 AM
Yesterday 02:41 PM
by Steve
1 105
Another website update
Chilehead
Yesterday 11:24 AM
Yesterday 12:46 PM
by Just for Cuts
3 102
tips on creating a...
BLAZIER-1991
01-08-2015 07:22 PM
Yesterday 02:44 AM
by ExtremeLawncareServices
5 707
New Lawn Care Service...
rlclawncare123
Yesterday 12:49 AM
Yesterday 02:24 AM
by ExtremeLawncareServices
1 105
Finally!
SGL1
02-22-2015 09:46 PM
02-25-2015 10:15 PM
by SGL1
13 446
leaf removal.. mulching...
facework84
08-05-2011 03:26 PM
02-25-2015 08:07 PM
by Steve
5 2,788
How many customers?
SC93
02-25-2015 12:40 AM
02-25-2015 04:59 PM
by SC93
5 227
Irrigation...
charlieallen
02-24-2015 01:16 PM
02-25-2015 02:58 PM
by Steve
6 221
use a small business...
BLAZIER-1991
12-25-2014 12:21 AM
02-25-2015 12:46 AM
by SC93
33 2,799
honest opinion please
uppercut
02-17-2015 02:30 AM
02-24-2015 07:12 PM
by homey
10 645
2nd year advice anyone
Bradcook21
02-18-2015 07:00 PM
02-24-2015 05:15 PM
by Bradcook21
14 621
need help
lawnexpers115
02-23-2015 05:36 PM
02-24-2015 02:49 PM
by Steve
3 263
Hello People
nativikee
02-23-2015 07:17 PM
02-24-2015 02:43 PM
by Steve
4 268
New member
qua ke zik 001
02-23-2015 11:24 AM
02-23-2015 03:40 PM
by Steve
1 224
New Video
Sprinkler Buddy
02-22-2015 09:18 PM
02-23-2015 03:19 PM
by Sprinkler Buddy
2 249
need help with SCAG...
apmAkron
02-23-2015 09:14 AM
02-23-2015 01:57 PM
by apmAkron
3 248
which degrees would be...
BLAZIER-1991
02-20-2015 04:46 PM
02-23-2015 01:47 PM
by Steve
9 413
Trouble logging in
avetslawncare
02-21-2015 02:06 PM
02-23-2015 01:44 PM
by Steve
1 470
John Deere Quik Track...
acrajchel
02-20-2015 03:12 PM
02-23-2015 01:40 PM
by Steve
1 282
Trimming and...
joshlawncare
02-15-2015 02:04 PM
02-22-2015 09:48 PM
by SGL1
5 613
where can i post this
zippy-phil
02-17-2015 07:58 PM
02-20-2015 02:02 PM
by Steve
7 496
These are the days on...
ExtremeLawncareServices
01-11-2015 11:41 AM
02-19-2015 04:43 PM
by ExtremeLawncareServices
29 2,641
Thumbs up or down?
lawnman1959
02-18-2015 11:40 AM
02-19-2015 01:22 PM
by Chilehead
3 412
Am I growing too fast?
Mattcrump
08-04-2011 11:54 PM
02-19-2015 12:34 PM
by Steve
11 5,204
Say Hello !!!
Steve
03-19-2007 12:18 PM
02-19-2015 12:31 PM
by Steve
1,215 371,613
How to obtain more...
winkie61
02-17-2015 08:31 AM
02-19-2015 12:29 PM
by Steve
3 516
Mowing 2 acres
Bradcook21
01-05-2015 03:13 PM
02-19-2015 12:23 PM
by Steve
16 1,460
How to sell annual...
GroPro
02-17-2015 12:31 PM
02-18-2015 01:46 PM
by GroPro
5 504
FREE Custom Website...
breadcrumb
01-31-2015 10:58 PM
02-18-2015 01:32 PM
by Steve
5 1,100
Taking a step back
Billy Goat
02-16-2015 07:37 AM
02-18-2015 01:17 PM
by Chilehead
9 586
Employees
stevej
02-17-2015 05:25 PM
02-18-2015 12:47 PM
by Mr. Mow
1 402
Landscapers from hell!!
Chilehead
01-29-2015 03:55 PM
02-17-2015 07:48 PM
by ExtremeLawncareServices
9 1,009
Cannot access your Itune...
winkie61
02-17-2015 10:00 AM
02-17-2015 03:26 PM
by Steve
1 355
Advertising on internet...
Sprinkler Buddy
02-13-2015 01:22 PM
02-17-2015 01:00 PM
by Steve
9 667
new to this forum
NIP'N'TUK
02-14-2015 07:54 PM
02-16-2015 10:03 PM
by Steve
2 486
Advice on bidding 20...
sleepydunn
02-15-2015 07:38 PM
02-16-2015 09:59 PM
by Steve
4 602
New to me mower
xandrew245x
04-27-2014 08:02 PM
02-16-2015 09:48 PM
by Steve
8 1,393
mower blades
tlf59263
02-09-2015 12:36 PM
02-16-2015 05:16 PM
by Just for Cuts
8 818
Just Quit?
ringahding1
01-30-2015 06:23 AM
02-16-2015 02:16 PM
by joshlawncare
18 1,501
Advice on Bidding...
veteranlawnservice
02-08-2015 09:21 PM
02-16-2015 12:14 PM
by joshlawncare
18 1,209
Extending the life of...
rmccutchan
01-17-2015 12:37 AM
02-16-2015 09:51 AM
by rmccutchan
20 1,575
» Popular Tags
2wd 4x4 ad landscaping aerocore apartment bid apartment lawn care estimate applying auger billy goat brushcutter bush contract help deliquentaccounts design ditches door hangers employee problems equipment rental estimate ferris foreman four wheel drive google gopherhaul gravely growing a lawn care business how to husqvarna introduction jobs john deere quik trac landscape services lawn lawn care lawn care busines plan lawn care business lawn care business seo lawn care business show lawn care business website lawn care business website seo lawn care seo lawn care website lawn care website seo lawn mowing managing a lawn care business marketing marketing secrets mulch new mower per hour service podcast pricing pto secrets to landscaping seo shell snow plowing square foot starting a lawn care business steep lawns theft toro toro grand stand trailer trailer mate pro tree up sell employee web design website design winterization wood
Powered by vBadvanced CMPS v3.1.0

All times are GMT -5. The time now is 11:56 PM.


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

All times are GMT -5. The time now is 11:56 PM.

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