I read an interesting thread on what people are doing for Taxes or tax right offs for their lawn/lanscaping businesses and was wondering how/what you do for your snow removal business? Milage? Your computer? Your garage?
Its the same as every business, all of your expenses should be written off. John, for how long do you recommend a loss? After a few years in a row of claiming losses, the IRS will audit & consider the "business" a "hobby" & I believe all of the rules then change. This is what my accountant told me. Of course if you live in my area you can legitimately pull off a loss in a snowplowing only biz for many years, given our lack of snow for many years at a time.
I was told 4 years, max.
I think it was 4 or 5 years for us, in the beginning. Might be why I got audited a few times early on. The last year I lost money was the first year I had a CPA do my returns. After that, it was clear sailing, no audits and turning a profit (albeit a small one, thanks to the accountant).
Once you get going, you really do need to make a profit. After awhile, and once you use up the legitimate deductions you gotta start turning a profit or you won't survive.
Hell, I pay more in taxes now than I gross'd the first 5 years and I long for the days of not having to pay any taxes......
TAXES,TAXES,TAXES,drives me crazy.The first couple years in business I thought I was going to go crazy,still think that sometimes.Have a little better understanding now after 10 years.I still think my accountant probably thought I was crazy when Id say are you sure these are correct.940,941,uc2,quarterlys year end reconcilliations,pa3,pa501 Rev 1667(sales tax) Tax my paycheck then tax everything I buy with whats left after taxes.Did I forget any? all yeah 1040,self employment tax Tax me tax me tax me.