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Old 04-24-2011, 09:14 PM
 
610 posts, read 2,853,794 times
Reputation: 796

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I recently started providing landscaping services to homeowners in my area.

I am getting ready to surpass the $400 mark for IRS self-employment tax purposes and I have some questions:

Am I required to keep "books" for my self employment activities (ie do I need a cash flow accounting ledger, etc) OR can I just write down the gross amount of money I get from each person I charge for my services and then deduct that amount for things like gas, equipment, etc, to come up with my net income?

Are there any free accounting software programs like Quickbooks or would I need to buy Quickbooks?

Do I need to get a Employer Identification Number from the IRS in order to file my taxes next tax season?
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Old 04-25-2011, 07:08 AM
 
10,135 posts, read 24,740,078 times
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You must keep records or someday IRS might "estimate."

Use an Excel spread sheet. Money in in one column, expense columns across.

No EIN needed although eventually you will want to form an LLC and use that solely as your business identity. You still won't need an EIN. Search on this forum to see why you need an LLC.
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Old 04-25-2011, 09:48 AM
 
1,475 posts, read 2,356,323 times
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Quote:
Originally Posted by heeha View Post
Am I required to keep "books" for my self employment activities (ie do I need a cash flow accounting ledger, etc) OR can I just write down the gross amount of money I get from each person I charge for my services and then deduct that amount for things like gas, equipment, etc, to come up with my net income?
Put all of the receipts you write for your customers to pay, in one shoe box. Put all of the receipts you pay to vendors, in another shoe box.

At the end of each quarter give those shoe boxes to an accountant.
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Old 04-25-2011, 11:56 AM
 
Location: Baltimore
1,802 posts, read 7,651,408 times
Reputation: 1938
Keep in mind that your state will most likely also require that you keep certain records and that you make them available for inspection and audit. You may have exposure for sales and use tax. Many states tax services, and some states consider a landscaper to be selling tangible personal property when they plant trees, bushes and other plants. If this is the case, you need to be licensed to collect the tax. And even those states that consider you to be a real property contractor will require you to document that you paid the correct tax on equipment and supplies used in the business. If they check your records and you are unable to document that you paid and/or collected the correct amount of sales and use tax, you could be assessed the tax, along with interest and penalties.
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Old 04-25-2011, 10:00 PM
 
25,627 posts, read 32,715,433 times
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You are not a technically considered a Contractor unless Licensed thru your state. Are you truly a Landscape contractor or a lawn maintenance business that does landscaping on the side.

1) All your business activities will have to filled on a schedule c with your 1040 that you file. As well as potentially a multitude of other forms to document things like start-up costs depreciation etc...

2) Get basic quickbooks. For the small business it will make tax time much easier. Document every expense and income item that flows through your business.

3)Federal, State and Local jurisdictions all have different requirements for small businesses. No harm in getting a separate EIN that is not your social security number for things like 1099's that you will probably be getting a lot of when working for other entities.

Good luck.
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Old 04-26-2011, 10:27 PM
 
610 posts, read 2,853,794 times
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Where do I get a copy of the multitude of forms I need for my business like start up costs, depreciation, etc?

How much does business liability insurance normally cost?
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Old 04-27-2011, 10:44 AM
 
Location: Northern MN
3,869 posts, read 13,935,297 times
Reputation: 3593
You need to do your homework.

Start up costs are different for every business.
I/we/they have no idea what yours are, only you do.
You could try to find out what others paid to start a similar business, but where would you find that info.

I//we have no idea what you are depreciating or what schedule your are going to use.

Your Ins costs can vary greatly.
The type of business, (exposure to liability) your income, etc etc.

Find your self an accountant or go to your local university, they usually have programs for folks who want to start a business. Talk to the Business dept.

Quote:
Originally Posted by heeha View Post
Where do I get a copy of the multitude of forms I need for my business like start up costs, depreciation, etc?

How much does business liability insurance normally cost?
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