Start up lawn care business tax questions.

An important step you should take when getting your lawn care business started your first year is keep track of all your receipts, income, and expenses. Doing so will help you tremendously. All of this information will make the entire tax reporting process a lot easier. The next step you will need to take is to find out what taxes you need to collect for. As we will see in this discussion from the Gopher Lawn Care Business Forum, every area is different, but knowing what one area does can give you a heads up with what you need to look out for.

One lawn care business owner wrote “I’m going to register as a sole proprietor starting off with my lawn care business. How does the whole tax stuff work out? As sole proprietor, do I charge the customer tax for mowing, trimming, blowing, and edging? Or is that only when and if I go to become an LLC.

Also how do I do my taxes each year as sole proprietor? I will still be working at my current full time job and if all goes well, I may go to part time and do lawn care full time. Do I just add what I made from the business to my income taxes at the end of the year? Also can I still write off stuff I buy for the business (gas, parts, mower, etc.) Any information would be great”

A second lawn care business owner shared “all of this varies state to state and can actually vary community to community. I think if you could sit down with a book keeper or an accountant just for a half hour or so, they could get you started on the right track.

There are a bunch of issues here that you really want to nail down before you get in too deep. It’s no big deal once you know but it would really suck to find out at the end of the year you didn’t collect a tax on a certain service that you should have and now you got to pay it out of pocket.

In my area I pay state, county, city, and locality (Town, Village, etc) sales tax. Everything is taxable - material and labor. If you purchase material from out of state you have to pay state tax. Your tax bill for all localities is due the 15 of the following month. Fines for not doing so are oppressive!

As for federal tax, your first year in business you can pay at tax time. After the first year you must file quarterly tax payments. All small business tax deductions and credits apply. Home office, insurance (business and personal), repairs, maintenance, licenses, etc. All regular bills such as utility, garbage, etc. are deductible at the percentage of your office to house sq. ft. If you have a 10′ x 12′ office (120 sq ft) and a 1,200 sq ft house, you can deduct 10% of your expenses.

Get 2 phone lines, either land line or a cellular. One for your personal calls and one for your business. You can deduct 100% of your business line so use that for the majority of your calls.

Again, I can’t stress this enough, check with a local tax specialist for all legitimate deductions. Then you might want to invest in some tax software to help you file your tax forms.”

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