Lawn Buisness?

[trailrider894]

Hey, guys i run a small time lawn mowing operation in the spring/summer/fall. My questions is, how much money am i really allowed to make under the table? I will be making upwards of 5,000 dollars over the summer on lawns alone and that doesn't unclude mulching, fertilizer, etc.... I don't want to run into tax stuff or something like that... Just wondering. THanks.

[SRH]

im 99% sure any earnings are suppose to be reported, but i think something like under 3,000 you dont have to file a tax return? ....something like that

[CJM]

Its under like 3k you dont have to report. If your on disability or such you can earn like 8-10k iirc.

What you gotta claim is self employment and do a 1099 form. Sadly unless its all cash or checks made out to cash they will probably catch you since its a large amounts you will either be depositing or cashing. Im not sure but there may not be any record if you cash the check at the persons bank and not yours? There will be a record if you cash it at your bank or deposit it.

What you do is see an accountant (a good one is worth paying for it). Then you setup a payment plan based on what you think you may earn (or you can pay in one lump sum before taxes are due for that year, IRS will send you either a refund or a bill for more depending on if its to much or to little). You give as much records, and such to said accountant and they figure out how much you owe and if those payments sync up your good, if not you owe and if you paid to much either you apply it to next time or you get a refund.

I did it myself for a long time working for someone else. You dont have to pay things SS, or much else. All you pay is state and federal income tax. Bad news is, should you claim disability, unemployment, etc-you cant get it since your self employed and didnt contribute to it.

You want to write off everything possible from truck and equipment repair, to work clothes and shoes, to gas used (save the receipts to everything btw) if possible. Anything that can be claimed a work expense you claim, right down to the tolls you might have to pay for driving on certain roads to the lunch you eat.

Ill use me as an example:
I made on avg (according to my former bosses accountant who always fudged it and my former boss who kept shoddy records) in one year 17k. This we knew as impossible cause even avg out weekly pay and such it was more but that doesnt matter. I went to the accountant and he asked me for all my records. I bought tools, work clothes and shoes, lunch, gas to get to work, etc, etc. He tallied it all up and wrote it off as a biz expense. Then we figured taxes. On 17k I paid in 3k worth of taxes. Thats a far cry from much more you pay if you were to not be a self employed guy and working say at the local 7-11.

Hope that helps, really seek an accountant if people pay checks your name. Only cash and checks made to cash, cashed at THERE bank will make you invisible.

[trailrider894]

Originally posted by CJM
Its under like 3k you dont have to report. If your on disability or such you can earn like 8-10k iirc.

What you gotta claim is self employment and do a 1099 form. Sadly unless its all cash or checks made out to cash they will probably catch you since its a large amounts you will either be depositing or cashing. Im not sure but there may not be any record if you cash the check at the persons bank and not yours? There will be a record if you cash it at your bank or deposit it.

What you do is see an accountant (a good one is worth paying for it). Then you setup a payment plan based on what you think you may earn (or you can pay in one lump sum before taxes are due for that year, IRS will send you either a refund or a bill for more depending on if its to much or to little). You give as much records, and such to said accountant and they figure out how much you owe and if those payments sync up your good, if not you owe and if you paid to much either you apply it to next time or you get a refund.

I did it myself for a long time working for someone else. You dont have to pay things SS, or much else. All you pay is state and federal income tax. Bad news is, should you claim disability, unemployment, etc-you cant get it since your self employed and didnt contribute to it.

You want to write off everything possible from truck and equipment repair, to work clothes and shoes, to gas used (save the receipts to everything btw) if possible. Anything that can be claimed a work expense you claim, right down to the tolls you might have to pay for driving on certain roads to the lunch you eat.

Ill use me as an example:
I made on avg (according to my former bosses accountant who always fudged it and my former boss who kept shoddy records) in one year 17k. This we knew as impossible cause even avg out weekly pay and such it was more but that doesnt matter. I went to the accountant and he asked me for all my records. I bought tools, work clothes and shoes, lunch, gas to get to work, etc, etc. He tallied it all up and wrote it off as a biz expense. Then we figured taxes. On 17k I paid in 3k worth of taxes. Thats a far cry from much more you pay if you were to not be a self employed guy and working say at the local 7-11.

Hope that helps, really seek an accountant if people pay checks your name. Only cash and checks made to cash, cashed at THERE bank will make you invisible.

But what happens when i go to depoisit that money as cash? will they still find out?

[ZeroLogic]

Originally posted by trailrider894
But what happens when i go to depoisit that money as cash? will they still find out?



If the homeowner somehow trys to write you off or does something funky like that, the gov will find out. You are just a small time though I wouldn't be to worried.

I'm self employed carpenter, and I go through this crap all the time. If you get cash for the job, then don't count it towards income. No one needs to know Don't give them a receipt so there is no record of it.
If you get cash you can bank it spend it and whatever you want. Its like an "gift"
If its a check or something like that, write a receipt and tack on a few more bucks towards taxes.

Like said above. Write off everything from your work cloths, tools, gas, oil, maintenance.

[CJM]

Simple answer is to deposit as little as possible.

Make sure the person understands that there will be NO record of this to protect both you and them from further issues. Like I said, so long as you take checks in as cash or to your name and cash them at the persons bank there is no record.

[madsmokey12]

i would simply charge full price + Tax if they write a Check. or you can tell them if you pay cash i won't charge you the Extra Tax. alot of people want to save money so they will pay you cash

[CJM]

Originally posted by madsmokey12
i would simply charge full price + Tax if they write a Check. or you can tell them if you pay cash i won't charge you the Extra Tax. alot of people want to save money so they will pay you cash

Good idea, I used to do it all the time and had forgotten about that.

[derekhonda]

There shouldn't be any tax on a "service" such as lawn mowing. Now if you are charging and collecting tax, then that brings on a tremendous other set of problems.

However, give a 10% cash discount, which is essentially the same thing and doesnt break any rules.

[trailrider894]

Originally posted by CJM
Simple answer is to deposit as little as possible.

Make sure the person understands that there will be NO record of this to protect both you and them from further issues. Like I said, so long as you take checks in as cash or to your name and cash them at the persons bank there is no record.

So if they write it to my name i will be okay?

[CJM]

Originally posted by trailrider894
So if they write it to my name i will be okay?

Should be fine. My old boss made us specifically have checks made out to him and cashed them at the persons bank not his. He had problems with the IRS bothering him (they were driving him nuts over bs) so he tried to hide as much money from them as possible.

Like I said, if you file a tax return you have to show some income of some kind however small it might be. Filing a 1099 is the way to go and write off as much as possible.

I would really seek an accountant for some more help on the subject.

[derekhonda]

Originally posted by trailrider894
So if they write it to my name i will be okay?

You will be ok...until they audit you.

To protect yourself 100%:

1.either deal strictly in cash
2.any check written to you needs to be documented and added to your taxes.

[CJM]

Originally posted by derekhonda
You will be ok...until they audit you.

To protect yourself 100%:

1.either deal strictly in cash
2.any check written to you needs to be documented and added to your taxes.

Like I said, only sure way for the check thing to work is to either have them made out to cash or made out to you and cashed at the persons bank (no record). The only record you now have for that check is the person who wrote it-should they claim it (who claims lawn services IDK)...theres your issue.

[derekhonda]

Originally posted by CJM
Like I said, only sure way for the check thing to work is to either have them made out to cash or made out to you and cashed at the persons bank (no record). The only record you now have for that check is the person who wrote it-should they claim it (who claims lawn services IDK)...theres your issue.

Like I said, the only way to do it 100% no paper trail no way to find you at fault is:


To protect yourself 100%:

1.either deal strictly in cash
2.any check written to you needs to be documented and added to your taxes

You really should pay your taxes on earned income, obama needs the money :rolleyes:

[trailrider894]

Originally posted by derekhonda
Like I said, the only way to do it 100% no paper trail no way to find you at fault is:


To protect yourself 100%:

1.either deal strictly in cash
2.any check written to you needs to be documented and added to your taxes

You really should pay your taxes on earned income, obama needs the money :rolleyes:

last thing he needs is more money to deal with... Kinda funny that i have not really seen anyone on here that likes Obama!! Which is exciting!!

[derekhonda]

you have a pm, wrote it on here but figured it best for a PM

[SRH]

im in the process of getting things squared away with a llc for my business and filing taxes seems pretty cut and dry, im 100% cash but keep written books and all my invoices and receipts...how do these guys get into issues with the irs...seems like common sense...or do there issues arise trying to hide income with a papertrail?

[JAG Motosports]

I've been self employed for 20 yrs and I'm no angel, but I gotta tell ya...not reporting income is serious ****. I'd lie about alot of other stuff before I picked not reporting income. People spend jail time for that.

[CJM]

They wont jail you for not reporting income. What they will do is fine you, tons and tons of fines. Jailing you doesnt get them any money and its money they want.

FYI: Everything I said (for my and anyones protection) is totally hypothetical and illegal. do it at your own risk. There standard disclaimer.

Having been self employed on and off and knowing my fair share of accountants since my dad almost has a degree in it till he changed majors in college, my grandfather was an accountant all his life and a family friend is a superb accountant. All of them agree that in some cases doing it the underhanded way is fine-but you gotta show SOME income. However you have to know how to do it the right way to never raise a flag.

My mothers family ran a bar and liquor store for 30 years. Only once were the audited and it wasnt for a real reason-the then gov audited all cash biz to raise money cause she bankrupted us. They said we made over 500k a year net based on one friday nights take. Like my grandparents said: if that was the case then why would anyone of us actually work the bar or counter-we would pay others to do it for us!

But yea sorry to rant and go off topic. Like I said seek an accountants advice please.

[derekhonda]

Originally posted by CJM
They wont jail you for not reporting income. What they will do is fine you, tons and tons of fines. Jailing you doesnt get them any money and its money they want.

FYI: Everything I said (for my and anyones protection) is totally hypothetical and illegal. do it at your own risk. There standard disclaimer.

Having been self employed on and off and knowing my fair share of accountants since my dad almost has a degree in it till he changed majors in college, my grandfather was an accountant all his life and a family friend is a superb accountant. All of them agree that in some cases doing it the underhanded way is fine-but you gotta show SOME income. However you have to know how to do it the right way to never raise a flag.

My mothers family ran a bar and liquor store for 30 years. Only once were the audited and it wasnt for a real reason-the then gov audited all cash biz to raise money cause she bankrupted us. They said we made over 500k a year net based on one friday nights take. Like my grandparents said: if that was the case then why would anyone of us actually work the bar or counter-we would pay others to do it for us!

But yea sorry to rant and go off topic. Like I said seek an accountants advice please.

You really just keep adding bad info on here.

1. You are right they won't jail you, at first. If you get audited and they go back the full 7 years they can, they will just bury you with debt. Then, if you can't pay it off at once, they can and might put leins against/seize your house, cars, anything you own. Then if they aren't satisfied, or if you are a repeater, you go to jail.

what could be about $1000 a year in taxes you don't pay, might turn in to around 15-20000 in irs fees, penalties, and interest charges over the course of those 7 years.

Audits do happen both randomly and with cause. No rhyme or reason why they did it to your moms bar business. The thing to remember with the irs is its no problem until it is a problem. You might go your whole life never getting audited never paying taxes on side income...then again...you might not.

[SRH]

do they go back only as far as youve been in business? or do they go 7 yrs back regardless in a audit?

[CJM]

Originally posted by derekhonda
You really just keep adding bad info on here.

1. You are right they won't jail you, at first. If you get audited and they go back the full 7 years they can, they will just bury you with debt. Then, if you can't pay it off at once, they can and might put leins against/seize your house, cars, anything you own. Then if they aren't satisfied, or if you are a repeater, you go to jail.

what could be about $1000 a year in taxes you don't pay, might turn in to around 15-20000 in irs fees, penalties, and interest charges over the course of those 7 years.

Audits do happen both randomly and with cause. No rhyme or reason why they did it to your moms bar business. The thing to remember with the irs is its no problem until it is a problem. You might go your whole life never getting audited never paying taxes on side income...then again...you might not.
Im not disagreeing, but if the above was the case my former boss woulda been in jail a LONG time ago. The IRS LOVES him and has made him use payment plans for years b/c like an idiot he didnt pay the proper sales tax in. However in his biz its kinda hard to properly calculate income due to the way he is paid (AAA towing). Its a rather long story, but suffice to say the IRS has audited him multiple times, he always settles with a lawyer and they fine him and he pays them when he feels like it. If you at least send them 20 bucks they cant do jack to you. His trick was that he owns NOTHING. Everything is in a corporations name and he has it setup so he isnt liable for a thing. Its a really weird situation that even I have trouble making sense of. But point being hes not in jail..

Basically it boils down to this: if they send you to jail they get squat, if they fine you and keep you out of jail then they get money and its money they want. jailing you gains them NOTHING, how many people do you know who got sent to jail for tax fraud? I dont know anyone at all and at the rate people who operate mostly cash biz do it the jails would be FULL.

For a lawn biz that is likely to be totally overlooked pretty much anyways everything I said is fine. Now if I was running say a storefront biz or such I wouldnt DARE do anything I said as you must show records. A mostly cash biz has some leeway. But still you gotta show some income. My guess since hes young is he basically has a truck, some mowers, no biz insurance and offers to mow peoples lawns like many people do. He probably doesnt have an LLC, corporation or DBA either.

The whole thing is tho, in order not to get caught you have to know what your doing. Income tax btw is illegal anyways (really, there is no law or US code that says you gotta pay it) but thats another story for another day.

[SRH]

i cant understand ppl going to those lengths with the aggravation and risk just to skimp the irs out of a few grand

[CJM]

Originally posted by SRH
i cant understand ppl going to those lengths with the aggravation and risk just to skimp the irs out of a few grand

Its not hard at all, and believe me ALOT of people do it.

[honda450sl]

As a CPA, if you intentionally don't report and you are caught, there is NO statute of limitations and they can go back as far as they want (NOT just seven years). Anything you make over $600 is supposed to be reported to pay self employment tax as well as regular income tax - obviously there is a lot more to it than just those couple of sentences but to reiterate the earlier reply, it is serious stuff if you get caught - lots of fines and possible jail time. See a CPA and get their advice- there are lots of tax saving options that are completely legal that can defer or eliminate any tax payments. Self employment tax is what it is though.

[wild250rman]

get your local and state license if required hire a reputable accountant and do it legit. you can sleep at night and don't have to look over your shoulder worrying. besides state lands and funding for riding areas do get part of their money from taxes, so do the roads you drive on to get there. so think of it as an investment in your riding future not weather you beat the government out of a dime. get off on the right foot and things will work better in the long run if your business takes off.