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Jrocket
01-05-2003, 06:50 PM
Ok....I have a question or two for somebody.I have a small side buisness that is getting big enough that I might have to go full time with it.I need to buy another work truck(pick up) but I dont know which way I should go about it.
Is it better to lease or buy for buisness reason's.If I lease can I still get a good rate on a used truck or would it be better to get a new one.On a lease can I write off(for taxes)the entire payment for my buisness or just a portion? Would it be the same way for a buy? I should try to write off as much as possible right? Im thinking my overhead in truck payments would be lower if I leased,correct? Would it be stupid to try a lease on a used truck or is the money factor # lower on a new one?
Its basically a few different question rolled into one there! My buisness is at the point where I need to go bigger and fully at it or just stay small.I want to make it bigger but need some small guidance.....
Can somebody kick me into the right direction or give me some enlightment here?
Thanks,Johnny Rocket

Havasu Hangin'
01-05-2003, 06:54 PM
I'm not a tax guy...but...
Buy it personally, then lease it back to your company...take the depreciation as a tax write-off.
Also, write off the lease as a business expense for your company.

OutCole'd
01-05-2003, 07:00 PM
Johnny, Leases used to be the way to go. Right now is almost the same to lease or buy with the same down payment. So I would buy. Leasing only makes sense if the monthly payment is much cheaper with the same down. The write off question depends on your business status. If you are incorporated, and what kind of corporation it is. Talk to who ever does your books. If you are a S corp it should be no problem to write it off.
Congrats on the small business becoming a medium size business.
[ January 05, 2003, 07:01 PM: Message edited by: OutCole'd ]

Charley
01-05-2003, 07:07 PM
why would the owner of Force just now need a Pickup Truck ?? OHHHHH you said it's for your NEW side business....... ohhh - k
:D :D :D

Jrocket
01-05-2003, 07:19 PM
Charley:
why would the owner of Force just now need a Pickup Truck ?? OHHHHH you said it's for your NEW side business....... ohhh - k
:D :D :D I knew you would catch on!!
Ok the buisness is very small,but in a matter of 6 months it will be my main income.If I buy and lease it back to my company how does that work? I've heard of it but havent done it.
This buisness is going to be my main income(hopefully).I can hide all the money,like I have been doing(I hope Uncle Sam's not in here!!! LOL)but I would like to show some profit and loss's for credit and future things.I get killed every year on taxes as it is.So I dont want to get killed with my new buisness.
Ive never started a buisness by the books so any help I can use.
Well besides my boat company that kicks ass(that was for you Charley) :D :D
Thanks Johnny

Jrocket
01-05-2003, 07:20 PM
Charley check your PM.. :)

ed bullock
01-05-2003, 07:21 PM
im a small buisness owner and i have bought all my trucks. i put alot of miles on mine so a didnt lease. i can write off depreciation and payments. this is the only way i have done it so if there is a better way im all ears.

WetWillie
01-05-2003, 07:40 PM
I have to agree purchase them. I have bought all of my vans. You will have soooo many other things to worry about other then mileage and the other stuff. If you buy it you can sell it when you want..
WW :p

Charley
01-05-2003, 07:54 PM
Jrocket:
Charley check your PM.. :) sent ya back......
and HH has a good idea but be careful... I have to file 2 tax returns every year...business/corporate and personal .... if you buy it personally and lease it back to the company you should write a company check every month to yourself personally..... the problem is you will have to justify the income (that monthy check) as income... offset of course by your payment....IMHO buy the truck and depreciate it.... true loopholes are almost non existent anymore... the only way to get an upperhand on uncle sam these days is to buy yourself a cash business (bar,carwash etc...) at that point it's possible to get away with a little something..... otherwise just pay yer dues... wink

Havasu Hangin'
01-05-2003, 07:59 PM
Charley:
..and HH has a good idea but be careful...Hey...I never said I would do it...
jrocket = Al Capone? http://www.planetsmilies.com/smilies/happy/happy02.gif
PS- If the business goes south, at least they can't take the truck... http://www.planetsmilies.com/smilies/happy/happy06.gif

Jrocket
01-05-2003, 08:12 PM
Ok so I should buy the truck in my name or the buisness name? Im leaning towards a used one just for the fact that it might get some rough use now and again.Plus I want to keep my paymenst low.
Would the payments be the same on buying used as they would leasing new? That I will have to look into.I wont be putting on alot of miles,that another reason I asked about leasing.
Maybe I should keep this to a cash and hide buissness and just make it bigger? My only thing is buy power in the future.If I cant show income then I cant buy new things,right?
This too dam confusing for me.. frown

ACCEPTENCE
01-05-2003, 08:40 PM
Havasu Hangin':
I'm not a tax guy...but...
Buy it personally, then lease it back to your company...take the depreciation as a tax write-off.
Also, write off the lease as a business expense for your company. Bingo!!!! H.H. has hit the nail on the head. it's exactly the direction I was going to post as well.. good luck with the venture.

Jrocket
01-05-2003, 08:48 PM
ACCEPTENCE:
Havasu Hangin':
I'm not a tax guy...but...
Buy it personally, then lease it back to your company...take the depreciation as a tax write-off.
Also, write off the lease as a business expense for your company. Bingo!!!! H.H. has hit the nail on the head. it's exactly the direction I was going to post as well.. good luck with the venture. Is this a good way even if the company is very low money maker to start off.Does it matter how small of gross profit a company makes? What happens when a company shows a loss for months at a time.Do they start asking where the money comes from to pay the overhead? Or do you show that you just broke even alot?
Maybe I should of taken buisness classes instead of boat building ones ..ehhh!! :D

WetWillie
01-05-2003, 08:54 PM
Your company wont be able to buy anything. It has not credit. I recommend doing what Charlie said and purchase under your corps or business name. You will have of course cosign for it..
then depreciate it. If you take decent care of it you will have it for 10 years and only pay on iy for 5.
WW :confused:

126driver
01-05-2003, 09:03 PM
Bro, IMHO I think you would be much better off asking the board for an accountant recommendation in your area. There are a lot of ins and outs for both. Good luck to you - good to hear you're doing well in this economy.

Jrocket
01-05-2003, 09:05 PM
WetWillie:
Your company wont be able to buy anything. It has not credit. I recommend doing what Charlie said and purchase under your corps or business name. You will have of course cosign for it..
then depreciate it. If you take decent care of it you will have it for 10 years and only pay on iy for 5.
WW :confused: So I put the equipment in the company name but co-sign for it on the loan? What does it take to put the loan in a company name(buisness licsense,?)Hw does the depreciation factor work? Do I have to depreciate it every tax season and how much do you usually knock it down? Ive got the jist of things,just not the depreciation and taxes part! My tax lady can help me but I really like to hear the views of other people and see what works best for me.
Im really thankful for the help so far......Johnny

C-2
01-05-2003, 09:47 PM
I believe it also depends on what form you intend to operate your company (i.e. sole proprietorship or corporation/s-corporation, LLC).
Words of wisdom…
Get a good accountant/firm, skip on somebody who does taxes only. A thousand or two dollars per year in fees, used for tax strategies, might help you put tens of thousands in your pocket :) An initial consultation is usually several hundred dollars, you can take a whole laundry list of questions to ask. Nolo.com is also an excellent source for self-help legal publications.
Isn’t Bohica an accountant?
C2

ROZ
01-06-2003, 02:19 AM
You need a CPA who can assist you in creating a 5 year business plan (to start). Someone who is familiar with generating taxes for small companies/ soleproprietoship, limited liability, blah , blah, blah,,....Someone who knows business valuations, too.
My Dad is in this line of business and could answer some questions you may have....i'll pm his number if you like. He has clients in Riverside and Palm desert who he sees on a regular basis...
He's also a professional whitness, former fraud investigator for the IRS, court appionted business valuations, and a riverrat at heart wink
let me know.
I'm thinking 7 yr macre's then mileage.
leasing back to company sounds good. Dad did something like that for a dentist client of his with some dental chairs once. Dentist ended up leasing the chairs from his young son for 7 years...new office...
too tired to make sense, so I'm off to bed. GOODNIGHT NOW!

ROZ
01-06-2003, 02:27 AM
Jrocket:
[/qb]So I put the equipment in the company name but co-sign for it on the loan? What does it take to put the loan in a company name(buisness licsense,?)Hw does the depreciation factor work? Do I have to depreciate it every tax season and how much do you usually knock it down? Ive got the jist of things,just not the depreciation and taxes part! My tax lady can help me but I really like to hear the views of other people and see what works best for me.
Im really thankful for the help so far......Johnny [/QB][/QUOTE]There are formulas for depreciation for how long and when you take them.
I suggest checking into the off campus college bookstores. Snatch up an "Accounting Principles" course book and read it through. I still use it for refrence from time to time.

stump
01-06-2003, 04:24 AM
As A HVAC contractor myself .I buy my trucks.A new business has no credit record at the start up.The owners personal credit reports are the basis for the loans etc that you may get ,usually it is money that you have saved to start this venture.The vehicles bought by you to use in the company do not have to be in the company name ,you just have to show on paper that the company pay's for the vehicle each month or payed for it initially.It's best to talk to your CPA about this.Also I highly recommend reading a book called the E-Myth www.e-myth.com (http://www.e-myth.com) before you start this endevour.This book will awakin you and educate you about what you are about to do and help you start off on the right foot ,For me it was kinda like a MBA for people who never went to collage easy to understand and written in everyday words.And it really shows all of the differant hats that need to be worn and tells you how to organize yourself to wear those hatsI HIGHLY RECOMMEND this book.Good Luck!

OutCole'd
01-06-2003, 05:45 AM
I agree with stump. I read the e myth before I started my business, and it blew be away. Great book. You need a real accountant, not us practicing accountants, or is that practicing gynocologists, whatever.
you will need to buy the truck I do not think leasing is an option on used vehicles. the rates really suck then.

ed bullock
01-06-2003, 08:13 AM
remember buying used could get into high repair bills it happened to me. i bought new dodges with 7 year warranty. that could wipe my repair bills away for 7 years. talk to an accountant he will steer you in the right direction.

EricU
01-06-2003, 12:03 PM
If you are going to have a real business, that you want to grow, get a CPA you trust, use a accounting program such as Quickbooks. I started out having my bookeeper come in part time and now she works for me fulltime. You don't want to do what I did and think I had a bunch of money, then up oweing the feds over 100k.
I lease all my company vehicles, turns out it saved me a lot of money.
My business started out as just myself in my spare bedroom and I now have about 40 employees.
My bookeeper and my CPA have both saved me alot of money, while allowing my company to grow. By letting them do what they do well, I can concentrate on my business.
Get some advice from someone you can trust.
Eric.
My god! I sound like some old fart!

Jrocket
01-06-2003, 08:29 PM
First off thanks for all the ideas and guidance so far!! :)
Im going to read the E-Myth book and try set a goal or path for this buisness.One thing I would like to do is have a CPA looking at my books and have somebody guide me.So far it looks like I might have to run this thing for awhile off the tax books until I get big enough to do so.Im shooting for 6 months and then start all the legal paperwork.Im hoping that in the next 1-2 years Ill be able to have some employees and start bidding on commercial and new housing tracks.For now it will just be myself and a day laborer to do what is needed.
Once again thanks for all the help...Johnny Rocket

Jrocket
01-06-2003, 08:47 PM
E-myth:[/b] 96% of Businesses Started This Year Will Fail before Their 10th Birthday
Every year, some 1 million people start a business. What happens to them?
By the end of the first year, at least 40% of them will be out of business.¹
Within 5 years, more than 80% of them--800,000--will fail.
Within the second five years, an additional 80% of these businesses will fail.Wow,I just read that on the website.Those are some eye opening numbers.I look at it this way,if I dont atleast try,I will never know the outcome!

Havasu Hangin'
01-06-2003, 08:49 PM
Well...let me know if I can help you from becoming a statistic...anything for a fellow 909'er...
Isn't that the same 909 where Hustler's brother lives now?

Jrocket
01-06-2003, 08:57 PM
Havasu Hangin':
Well...let me know if I can help you from becoming a statistic...anything for a fellow 909'er...
Isn't that the same 909 where Hustler's brother lives now? Funny that you mention that(909)!! I know the exact dirt road that Hutsler used to live on.And it still looks the same 20 years later...LOL.He wants back in the 909,he's just in denial... :D
HH...if you ever need any help,you got it.Just call me.... :)

Hustler
01-06-2003, 10:00 PM
He wants back in the 909,he's just in denial... man Jrocket you are really gonna ruin my rep if you keep this talk up :rolleyes: and now you had to go and mention the dirt road :( :( :D