after all my spending on buying tools i have finally started making a profit not much but profit none the less
Now learn to replicate it and in 20 years you will be an overnight success
Don't tell the government
Always find a Loss column expense to offset these 'profits'. May be a good time to seek out a Tax Consultant.
Remember, It's not how much $$ you bring in. It's how much $$ you keep.
Well as your flush with cash I have a job needing done so can you give me a break on the labor?
Yep! 6 years in business and i'm still running at a loss as far as the government is concerned
yes flush i can finally get a combo meal at wendys instead of just the dollar menu
Is it gross or net. If it's gross, you don't want anyone to look at it and think that is so gross. If it is net profit, it's the ashes of the gross profit that you try to catch with your net. When you start out you always have too big of holes in your net and the ashes just pass through. As you keep getting smaller mesh for your net, the ashes keep getting smaller along with it.
How did you know my business model?
Government already knows and believes it is more than: Not much! Working on it...
Cut a hole in the side of that net; glue on a small funnel, divert "some" of that flow off to the side. Keeps the net from becoming deep and bulging. Maintain a "controlled" net. Patterns are everything in building a business.
The easiest way to end with a million dollars moving dirt, is to start with 2 million.
I haven't made a profit in 30 years. I have NO idea how I stay in business!
LOL!!!!
Me either!!!
To my surprise, the people that do our taxes said the IRS requirement that a small business show a profit in five years was not in effect. Every year I "lose" money ranching, almost any piece of equipment I have which is a few thousand dollars or more gets deprecated down to its residual value. I'm not being devious - just taking advantage of tax law. There's an old joke in Texas - behind every successful rancher is a wife with a good job at the county courthouse.
net
from what the government knows iv been in business for a month and made 300 dollars
A small business doesn't need to be profitable on paper it just needs to cover the owners salary and expenses. If you have write ons then you need write offs. The write offs are the key. If I can pay all my "expenses" then I really don't need a profit.. The goal is to hit zero on the taxable income line. For example, I'll drive a new truck every year or every other year before I write a check to the gov't. A F350 Platinum Tremor is an expense as I need transportation back and forth from the job sites. Now I just need to make enough money to buy the truck...
i did buy a f250 for this business and a slip up this week put the first dent in it...... anit even made the first payment
Well that makes it a work truck now. I like to take a hammer and knock a dent inside the bed of a new pickup before I put a liner in to go ahead and get the first dent out of the way.
Hardest job I did was installing a gooseneck hitch into the bed of my new truck fresh from the factory. Cut a honking big hole in the middle of a pristine glossy painted bed. Measured three times, use two different tape measures. Read the directions each time.
Ha! I did that once too on an '06 350 - dented the bed with my trusty Plumb hammer first. However I did measure at least 3 or 4 times before I put the hole saw to it.
im get me a picture thread going on here even though i do lawn care sooner or later i do want to buy a excavator i finally started taking pictures
I've never understood that concept. It's not like if you didn't drop $60k on a truck all of it goes to the government, just a portion. Can't speak for tax laws in the US, but in Canada the depreciation on the truck would probably be worse then the amount you'd save in taxes. I'd personally rather buy things like "work tools" to get rid of that profit if I need to. I know I can explain why as an excavation company I need a table saw and mitre saw
True but being able to write off $60K in a certain tax year may push down the tax bracket and that is a valuable weapon - especially if you need to add or upgrade a piece of iron or a truck. I've done that many, many times over the years when it was a good year profit wise. My philosophy is take all the tax breaks you can in the current year as no one knows what next year holds. That doesn't mean I'll buy something for the sake of buying but I'd rather spend my money on myself rather than sending it to the gov't. You milage may vary..
Well if that's the case, your tax laws are a lot different then up here in Canada so it may make a lot more sense there. You only can write off 15% depreciation a year and based off of total value of $30k I believe so only $4500 off of the profit, and if you buy it right at the end of the year you will be able to write off pretty much nothing as it's based off of how many days in the year you owned it. I'm still in the position of carrying forward losses from the first few years, so got a few years before I ever have to consider a way around paying the government any money.
Taxes are the way the government keeps the money turning around in circles. Inflation is caused when money is locked up in things like off shore accounts and multi-million dollar estates that sit empty and such. While most governments are extremely wasteful of the money they get, they at least plow it back into things like; roads, water and sewer systems, ensuring safety with issues like building codes, maintaining security by funding police, emergency medical services and military forces. If I have to part with money, I would a heck of a lot more prefer it go to a government rather than to a billionaire that hoards and hides it. I just feel that the billionaires should pay the same percentage of all they make as us poor people have to pay. I'm honest and will pay my share. I don't see that kind of morality from the super rich.
I know it's the case, as I've been doing it the last 20 + years of being in business. The tax rules change over the years sometimes being more or less generous on the % of purchase price you are allowed to write off. Last year we bought a RAM 3500 and a 279D both new which we wrote 100% if the purchase price off on both pieces. Basically take gross profit and deduct the price of both before calculating net. Yes the US and Canada have very different tax laws. I have several Canadian friends and how ya'll are taxed up there is interesting to say the least.
I have no problem with paying my share, and I do. But everyone else avoids paying anymore taxes then they have to, why shouldn't I? The part that makes me sick about it is how bad they waste money. Having worked for the government for years and seeing the waste pissed me off so much. A few times they outright paid money for absolutely nothing just to make sure they used all the money in their budget so they could get more next year. We did repairs by the hour, and 2 guys spent a week there at $75/hr and did not do a single second of work. That is what pisses me off so much about taxes. And the thing is you can't tell them anything. If you don't do it they will just hire another company who will. The part about the rich not paying their share is mostly BS too. Look up what % of the tax revenue comes from the top 1% compared to how much services the 1% uses, i'm sure there are many who don't pay proper taxes but most of them do.
Hey guys let's not derail Carolina Startup's thread with philosophical discussion about who pays what taxes and who should. That could get into to politics. We can discuss the rules on the books all day long though.
The thing that bugs me most about taxes is what it cost to manage your taxes by the time my wife double checks our books for the accountant pay the accountant to do there thing it just costs I call it a tax on taxes and while it's not some huge expense it's one more straw on the ol camels back
Nothing upsets me more than writing checks to the Gov. when I personally could have used that money to improve my business situation. I try to stay on what my tax obligation will be, but I think anyone in this business knows that is a crap shoot at best. Hard to guess income, when people will pay (assuming they do). I got bit really bad a couple years ago. I could have used that in a whole lot more productively then sending it to the black hole. The Fall is always interesting, GC are trying to pay everyone off to clear their accounts and subcontractors (when times are good) would prefer it was paid in the next year since they dont want to increase their tax obligation. There is no question that this thing is set up to keep money moving and it does that very well. Kills me when times are tough, guys not in the business will say "well at leas you should be sitting on money from when times were good" heard that a lot during the last major downturn in 2009. That would be true if you could pocket all that money, we all know that it doesn't quite work like that. My accountant says to keep your money on hand and hold off major purchases until the election is known. Taxes will certainly go up if there is a change in the White house, if that occurs, that is the time to draw down income through necessary purchases. Too bad purchases cant always be made based on the tax climate in that moment.
I'm not so worried about this years profits and taxes. I can manage my tax situation by knowing how the system works. What I worry about is the amount of work in the industry as a whole next year.
I believe that as long as the private sector is sending rockets, materials and men into space, the economy will remain good.
Congrats man! That's a great feeling! I've been doing odd jobs here and there, but 2 years in now and can't wait to get to where you are now.
Very well said, John.