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Taxes

KMSEXC

Well-Known Member
Joined
Nov 18, 2007
Messages
97
Location
ct
Who's on first? No,he's on second.:D

My question is with Federal Income taxes, say you contracted a job at ten thousand dollars, cost of materials were six thousand dollars, labor was one thousand so that leaves you with three thousand dollars how much Income tax come out of your three thousand dollars Sorry just trying to find a better way to mange my taxes I Keep waiting until April to pay my taxes and I'm getting whacked, I need to pay quarterly
 

ASPHALT04

Well-Known Member
Joined
Mar 9, 2008
Messages
137
Location
Wisconsin
Occupation
Owner / Doing whatever it takes to pay the bills!
My question is with Federal Income taxes, say you contracted a job at ten thousand dollars, cost of materials were six thousand dollars, labor was one thousand so that leaves you with three thousand dollars how much Income tax come out of your three thousand dollars Sorry just trying to find a better way to mange my taxes I Keep waiting until April to pay my taxes and I'm getting whacked, I need to pay quarterly

KMSEXC,
I would suggest, that if you don't already, get an accountant. I started my taxes on my own and after some advise from an accountant I had done some work for, he saved me way more than he cost and he was way more aware of the tax laws.
However make sure the accountant you is familar with doing the taxes for the type of bussines your in.:my2c
 

KMSEXC

Well-Known Member
Joined
Nov 18, 2007
Messages
97
Location
ct
KMSEXC,
I would suggest, that if you don't already, get an accountant. I started my taxes on my own and after some advise from an accountant I had done some work for, he saved me way more than he cost and he was way more aware of the tax laws.
However make sure the accountant you is familar with doing the taxes for the type of bussines your in.:my2c

Asphalt Thanks for reply It seems its hard to get an accountant that knows the construction business But you right , part of it is my fault with bad record keeping Its one thing to do the const work but its another to run the buisness i will have to work on that end this year thanks again KMSEXC
 

ASPHALT04

Well-Known Member
Joined
Mar 9, 2008
Messages
137
Location
Wisconsin
Occupation
Owner / Doing whatever it takes to pay the bills!
I think for most of us the paper end of the business can prove to be the hardest. I made myself a plan where I used to work since I was way more of a fieldman than an officeman. I to stop saying "I'll do it later" and made it a point to do an hour or so everyday so that if I walked into the office 2 weeks later I didn't have an overwhelming pile of papers on my desk to go through and file; approve; or whatever.


Now out on my own I don't have as much B.S., but I spend 2hrs once a week and I am way more organizied than I have ever been. Not saying this method can work for everyone but by forcing myself to do it for awhile just turned into a routine for me that made my life alot easier.
 

KMSEXC

Well-Known Member
Joined
Nov 18, 2007
Messages
97
Location
ct
Key

I think for most of us the paper end of the business can prove to be the hardest. I made myself a plan where I used to work since I was way more of a fieldman than an officeman. I to stop saying "I'll do it later" and made it a point to do an hour or so everyday so that if I walked into the office 2 weeks later I didn't have an overwhelming pile of papers on my desk to go through and file; approve; or whatever.


Now out on my own I don't have as much B.S., but I spend 2hrs once a week and I am way more organizied than I have ever been. Not saying this method can work for everyone but by forcing myself to do it for awhile just turned into a routine for me that made my life alot easier.

Thats The Key, alot of guys just think of the work on the site, and bury their heads in the sand when it come to office work , I'm going to take your advice and find a manager or Take time myself but its hard to convert over to an office person when you been in the trenches , a day on the site take alot out of you I'm sure you can relate Thanks Again KMSEXC
 

CM1995

Administrator
Joined
Jan 21, 2007
Messages
13,246
Location
Alabama
Occupation
Running what I brung and taking what I win
My question is with Federal Income taxes, say you contracted a job at ten thousand dollars, cost of materials were six thousand dollars, labor was one thousand so that leaves you with three thousand dollars how much Income tax come out of your three thousand dollars Sorry just trying to find a better way to mange my taxes I Keep waiting until April to pay my taxes and I'm getting whacked, I need to pay quarterly

First of all, I am no accoutant but I have too much experience paying taxes.:rolleyes:
If you made $3K on a job of net profit, then depending on your tax bracket, which being a small business means somewhere in the range of 30-40% of net profit, you would have a tax bill of $900 to $1200 for this project - kinda sucks doesn't it.

This is where you need an accountant to be sure you get the tax deductions you deserve. Equipment depreciation, insurance, workers comp., office expenses, phone, etc,etc are all deductions that need to be itemized because you are spending this for business and you for darn sure don't need to be taxed on these items. The senario you described is gross profit not net profit. All of the above mentioned items and several more, are deducted from your gross profit to determine your taxable (net) profit.

Hope this helps.
 

KMSEXC

Well-Known Member
Joined
Nov 18, 2007
Messages
97
Location
ct
First of all, I am no accoutant but I have too much experience paying taxes.:rolleyes:
If you made $3K on a job of net profit, then depending on your tax bracket, which being a small business means somewhere in the range of 30-40% of net profit, you would have a tax bill of $900 to $1200 for this project - kinda sucks doesn't it.

This is where you need an accountant to be sure you get the tax deductions you deserve. Equipment depreciation, insurance, workers comp., office expenses, phone, etc,etc are all deductions that need to be itemized because you are spending this for business and you for darn sure don't need to be taxed on these items. The senario you described is gross profit not net profit. All of the above mentioned items and several more, are deducted from your gross profit to determine your taxable (net) profit.

Hope this helps.
Thanks For the Help, Im getting it now, A partner I dont Need
 

CM1995

Administrator
Joined
Jan 21, 2007
Messages
13,246
Location
Alabama
Occupation
Running what I brung and taking what I win
Thanks For the Help, Im getting it now, A partner I dont Need

No problem!:drinkup That's what HEF is all about.

"The partner I don't need" - ain't that the truth. We have a silent partner named Uncle Sam that takes a chunk of everything we make yet they are never around when bills are due!:rolleyes:

Oohhhh boy - Don't get me started on taxes.........
 

jmac

Senior Member
Joined
Feb 4, 2006
Messages
740
Location
Central NY
Income tax and sales tax are two separate things. Sales tax is charged by you for your customer and added on to the invoice at the tax rate for your county and state. Mine is 8.75%. This is paid back to the state either yearly or every 3 months. So December, January, February is paid in March and so on. Depending on the amount of tax you could pay it more often. I think if you pay it yearly it cost more to do so. FOr you to not charge sales tax in NY you need a tax exempt certificate and tax number for that customer and you have to keep this on file, this is true with sub work for another contractor. Home owners pay sales tax because no one yet has shown me a capital improvement form. This comes from the county and all this does is offset the sales tax until they sell the home and then they have to pay the tax anyways. If you pay the sales tax when you buy material you can just add it in to your price and not charge the customer for it so it does not get paid twice. My wife does all this so she knows a lot more than I do about it. Income tax is the money you owe The USA for working hard and making a profit. The best way to pay as little as possible is spend all your profit on your business and then you won't have any taxable income, that’s what I do :Banghead
 

KMSEXC

Well-Known Member
Joined
Nov 18, 2007
Messages
97
Location
ct
Income tax and sales tax are two separate things. Sales tax is charged by you for your customer and added on to the invoice at the tax rate for your county and state. Mine is 8.75%. This is paid back to the state either yearly or every 3 months. So December, January, February is paid in March and so on. Depending on the amount of tax you could pay it more often. I think if you pay it yearly it cost more to do so. FOr you to not charge sales tax in NY you need a tax exempt certificate and tax number for that customer and you have to keep this on file, this is true with sub work for another contractor. Home owners pay sales tax because no one yet has shown me a capital improvement form. This comes from the county and all this does is offset the sales tax until they sell the home and then they have to pay the tax anyways. If you pay the sales tax when you buy material you can just add it in to your price and not charge the customer for it so it does not get paid twice. My wife does all this so she knows a lot more than I do about it. Income tax is the money you owe The USA for working hard and making a profit. The best way to pay as little as possible is spend all your profit on your business and then you won't have any taxable income, that’s what I do :Banghead
Thanks For The reply Greatly appreciated KMSEXC
 

tuney443

Senior Member
Joined
Mar 19, 2006
Messages
1,216
Location
Dutchess County,NY
Occupation
excavating contractor
Income tax and sales tax are two separate things. Sales tax is charged by you for your customer and added on to the invoice at the tax rate for your county and state. Mine is 8.75%. This is paid back to the state either yearly or every 3 months. So December, January, February is paid in March and so on. Depending on the amount of tax you could pay it more often. I think if you pay it yearly it cost more to do so. FOr you to not charge sales tax in NY you need a tax exempt certificate and tax number for that customer and you have to keep this on file, this is true with sub work for another contractor. Home owners pay sales tax because no one yet has shown me a capital improvement form. This comes from the county and all this does is offset the sales tax until they sell the home and then they have to pay the tax anyways. If you pay the sales tax when you buy material you can just add it in to your price and not charge the customer for it so it does not get paid twice. My wife does all this so she knows a lot more than I do about it. Income tax is the money you owe The USA for working hard and making a profit. The best way to pay as little as possible is spend all your profit on your business and then you won't have any taxable income, that’s what I do :Banghead

Jmac---whether you're working for a builder,contractor,or home owner--the sales tax laws apply to all the same.If I work for a home owner,such as the $9K waterproofing job I'm doing right now,I supply the capital improvement form for them {the client actually is really supposed to,but it doesn't matter--just being a nice guy},as long as the job meets all the criteria for being a capital improvement,the job is tax exempt.Some material,such as stone,BRG,that I supply,where I have filed a resale cert. with the vendors---when I file quarterly,I now pay that sales tax under'' Purchases subject to use tax'' on the tax form.
 

jmac

Senior Member
Joined
Feb 4, 2006
Messages
740
Location
Central NY
Thanks Tuney, qustion for ya, if you buy BRG, stone and you have a tax exempt resale form filled with the gravel pit, and the pit sells you stone with out tax charged, then you sell this to the customer are you adding tax on the invoice? If not then then the tax is never collected. I was also told that the capital improvement form only puts off the tax until home owner sells the home and then the tax is collected anyways. Is snow plowing taxable, I charge sales tax for this. I would rather error on the side of charging too much than not enough. What is the criteria for being a capital improvement?
If you charge sales tax in error on a job that you should not of charged tax for that 8.75% could be yours, wonder what the law is concerning this? I was also told that if you don't collect the tax you chould have to assume the tax as yours to pay. To be perectly honest I think most don't charge it and most don't pay it. Why be a collection agency for the state? I also know some guys that charge it and do not pay it back, they keep it. I was told that trucking is not taxable just the material so depending on how you price your material out, more trucking than the cost of the material this would change the amount collected.
 
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tuney443

Senior Member
Joined
Mar 19, 2006
Messages
1,216
Location
Dutchess County,NY
Occupation
excavating contractor
Thanks Tuney, qustion for ya, if you buy BRG, stone and you have a tax exempt resale form filled with the gravel pit, and the pit sells you stone with out tax charged, then you sell this to the customer are you adding tax on the invoice? If not then then the tax is never collected. I was also told that the capital improvement form only puts off the tax until home owner sells the home and then the tax is collected anyways. Is snow plowing taxable, I charge sales tax for this. I would rather error on the side of charging too much than not enough. What is the criteria for being a capital improvement?
If you charge sales tax in error on a job that you should not of charged tax for that 8.75% could be yours, wonder what the law is concerning this? I was also told that if you don't collect the tax you chould have to assume the tax as yours to pay. To be perectly honest I think most don't charge it and most don't pay it. Why be a collection agency for the state? I also know some guys that charge it and do not pay it back, they keep it. I was told that trucking is not taxable just the material so depending on how you price your material out, more trucking than the cost of the material this would change the amount collected.

Jmac---yes,absolutely you charge the customer sales tax on aggregates. I think you were given some redneck type explanation there on the house selling tax.What tax are we talking about.Doesn't matter though as the capital improvement form allows a job to be tax exempt if these 3 conditions are met: A.''substantially adds to the value of the real property or appreciably prolongs the useful life of the real property,and B.becomes part of the real property or is permanently affixed to the real property so that removal would cause material damage to the property or article itself,and C. is intended to become a permanent installation.'' Snow plowing is a taxable service,services are taxable. If you err and collect the tax,but you haven't yet filed with the state,simply apologize and write up a new invoice--give the client back the tax collected.If you already filed,gave the state the tax collected for that quarter,month,year,whatever,you are SOL--the state will gladly keep your money,so if you're smart you'll keep your mouth shut and do the paperwork better next time.Yes,a contractor is responsible for sales tax due,if you get audited and can't justify why you didn't charge sales tax on a certain job, service,material, and that job is most definitely taxable,you will have to pay it.Good luck with going back to the client and crying--too late. As for some who don't charge sales tax--they are opening themselves up for a world of whoopass from the state when they get caught,and they will eventually.The principal,interest, and penalty could be staggering.Worse yet,are those you mention for collecting the tax and not paying it in.That is called STEALING---think how you'll look in stripes.Why be a collection agency for the state? Maybe because it's the law of the state--dead serious--we all are whether we like it or not--we are all bonafide tax collecting agents--part of the price you pay for working in NY.Really though,not that big a deal--just do your paperwork correctly and like my previous post,I even made some money last quarter under the ''vendor collection credit''. Trucking is taxable--again--it's a service,what you might have heard is that years ago,trucking was exempt,but now it's not,the material in the truck is also taxable.
 

Cropduster

Active Member
Joined
Aug 6, 2008
Messages
26
Location
State of Confusion
You cannot charge your customer's YOUR federal taxes. Sales and use tax is a different thing entirely. Every business owner needs a good accountant and a course in basic business accounting doesnt hurt either. It took me a long time reading this thread to figure out what you were asking.
 

CM1995

Administrator
Joined
Jan 21, 2007
Messages
13,246
Location
Alabama
Occupation
Running what I brung and taking what I win
You cannot charge your customer's YOUR federal taxes.

Sure you can. Your Federal taxes should be figured into your operating expense. Of course there is not a line item on your invoice for your taxes they are paying, but it should be figured into your overhead/cost of doing business. Every good or service you purchase from a large corporation has their taxes figured into the price of the good or service you are buying.
 

Cropduster

Active Member
Joined
Aug 6, 2008
Messages
26
Location
State of Confusion
CM. dude, you are supposed to figure your tax liability into your operations costs, but KMS seemed to ask if he can charge his taxes as a line item to his customers. He cannot do that. The poor guy is new to the business, based on his questions, so in his sense of the question, he can't bill his customers for his taxes. It would be like telling your employer that they have to pay your Federal and State Income taxes.
 
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