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Taxes & Insurance

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  • Taxes & Insurance

    I am a new solo/opp, started this past January. I have learned much from these forums.

    I have invested approx. 12K in equipment, trailer, advertizement, etc. To date I am bringing in 2500/month. Should I pay quarterly taxes or can that wait till next year when the biz is bigger?

    Insurance has been a pain just to get quotes. I have searched strings on this topic in 2 other forums to see what others are paying. All I think I need in theft and replacement on the equipment and trailer and 300K liability. I would appreciate any advice for this "newbie" in the business.

    Steven Campbell
    Steven Campbell
    LoneStar LawnCare
    Waco, TX

  • #2

    Be a good idea to estimate your taxable income on 1040-C if sole proprietor and pay something on that quarterly to help avoid penalties
    and put the money aside so you don't get wacked at the start of next season. From schedule 1040-C go to the self employment Social Security form 1040-SE that tax plus the income tax after figuring personal exemptions and deductions ... (all of it shows up on schedule 1040) two kinds of taxes ... income tax and SS self employment tax.

    Phil Nilsson
    Nilsson Associates Consultants
    Visit Lawn Service & Landscaping Book Store

    Edited by - Phil Nilsson on Apr 18 2002 10:13:18 PM


    • #3

      I talked to a IRS agent earlier this year about self employment taxes and the way I understood it is that as long as you pay at least the amount of taxes from the previous year, you will be put it a safe house from any fees or penalties. So if you paid $4000 in taxes last year, you have to make estimated payments during the year to at least equal that of the previous year. Then next year you will be required to make estimated payments for whatever you pay in taxes this year.Hope this helped .


      • #4

        The penalty will be very low. Probably about $100. Back when I didn't have to file quarterly, I didn't. Heck, my accountant would have cost me more than the $100 fine!

        If you are looking to bring in about $15-$20k this summer, I wouldn't sweat it right now. Most guys in that range don't.

        Don't Fear the Green!
        a.k.a.---> Erich

        Build a man a fire, he'll be warm for a day.
        Set a man on fire, he'll be warm for the rest of his life.