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Taxes on income??

Discussion in 'Business Fundamentals' started by Kentuckydiesel, Dec 15, 2005.

  1. Kentuckydiesel

    Kentuckydiesel Senior Member
    Messages: 151

    If I am plowing as a personal side job, what do i need to do about taxes? Can I just count the money as income and pay them that way or does some sort of sales tax come into play? Thanks, Phillip
  2. Mick

    Mick PlowSite.com Veteran
    from Maine
    Messages: 5,546

    All income from plowing-related services is reported as business income (Federal) then combined with other income if you're are a sole proprietor. Sales tax is a State issue. In my case, I file semi annually. In Maine, sales tax is collected on sales of goods only, so I pay on sales of Magic Salt, not plowing or sanding (sanding/salting is considered a service).
  3. plowman350

    plowman350 Senior Member
    Messages: 125

    Depends on your state

    Does your state require sales tax on services? Do you sell materials? Do you have a sales tax license?

    When I salt, I include it in the price of the service. In MI services are not yet taxable. If you are itemizing your salting (ie $8 per bag) then it appears you are selling them salt. If you just charge a price for salt application, you are providing a service. If you consume a material while in the process of providing a service, you have sold the service, not the material to the customer, and it doesn't have to be taxed. Do you charge sales tax on the gas your truck uses? NO, becuase its a cost of doing business, you aren't actually selling the gas to the customer.

    As far as reporting your taxes. I'll assume you don't have a corporation and that you just do this as a side business. You are required to report all misc. income on your tax return. This is where you enter in the amount you made, and use your schedule C to deduct the expenses you incurred while running the business. This determines your profit. Your profit is added to your net income for the year, which determins how much you owe in taxes.

    IF you recieve cash.......that decision is between you and uncle sam.
  4. grandview

    grandview PlowSite Fanatic
    Messages: 14,609

    When in NEW YORK tax tax tax tax !!!:realmad: payup :eek: :yow!:
  5. LwnmwrMan22

    LwnmwrMan22 PlowSite Fanatic
    Messages: 28,366

    Here in MN, snowplowing is not sales-taxable.

    Plus, if you pay sales tax on the salt when you buy it, then you do not charge sales tax to the customer.