Should I Ask To Be Paid in Cash?

Posted by srbobc 
· April 3, 2012 

No.  And don’t offer a cash discount.  Never tell a customer that you prefer to be paid in cash.  Asking for cash is bad business and a dead give away that you are cheating on your taxes.

What About Preliminary Notices and Mechanics Liens?

Posted by srbobc 
· April 3, 2012 

Here is a definition for you:  A Preliminary Notice contains language which describes the details of the contract and who the interested parties are to the transaction.  It also makes a statement to the property owner that a mechanics lien could be placed on the subject property, what the consequences of such a lien placement are, and what their remedies…

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Should I Incorporate My Handyman Business?

Posted by srbobc 
· April 3, 2012 

What legal business structure should I choose?  The three most commonly chosen legal business structures are Sole Proprietorship, Limited Liability Company (LLC), and S Corporation.  Because I am not a lawyer or a tax attorney I am not qualified to recommend one structure over another.  I can only tell you what I have done and strongly recommend that you consult…

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About Record Keeping and Taxes

Posted by srbobc 
· April 3, 2012 

Federal income taxes, state income taxes, city business license tax, sales tax, payroll taxes, wow!  Taxes and recordkeeping can be quite a load. Your record keeping will make or break your business success.  Setting your books up correctly from the start will make everything easier when it becomes time to prepare your taxes. Here are some keys to success: Open…

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Do I Need an Accountant and a Bookkeeper?

Posted by srbobc 
· April 3, 2012 

Unless you’ve had a lot of experience with taxes, you may want to have a tax preparer complete your first year’s tax returns.  In subsequent years you can often prepare your own taxes by following last year’s example. I have found that after the chart of accounts has been set up properly your bookkeeping system simply requires maintenance. Bookkeeping software…

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What Should My Chart of Accounts Look Like?

Posted by srbobc 
· April 3, 2012 

Since the 1040 Schedule C is your basic profit and loss statement, I set up my chart of accounts to match the Schedule C as closely as possible.  You should need very few categories that aren’t listed on the Schedule C.  If your state has a sales tax and you have differing tax rates in your area you should break…

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Do I Need to Keep a Mileage Log?

Posted by srbobc 
· April 3, 2012 

Yes.  At the time of this writing, IRS Form 2106 instructions (for 2008 returns) had this to say about record keeping for your vehicle: “You cannot deduct expenses for travel…unless you keep records to prove the time, place, (and) business purpose…of these expenses.” I keep a small spiral notebook in the visor of my truck.  Each morning I list the…

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Are Labor and Materials Sales Subject to Sales Tax?

Posted by srbobc 
· April 3, 2012 

Since every state has different guidelines, the best suggestion I can make is to use the local state sales tax office as a resource and follow their instructions to the letter.  I am lucky enough to have a state office located in our city so I opened my account in person and asked a lot of questions. Collecting the correct…

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How Should I Manage My Money for Taxes?

Posted by srbobc 
· April 3, 2012 

Many business people have found that in their first year in business, the biggest challenge is keeping the doors open and paying the bills.  The second year another problem arises…how to pay all of the income tax!  Because there is a lot more money flowing in the second year they find themselves spending too much and having too much fun. …

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Can I Open a SEP-IRA Retirement Account?

Posted by srbobc 
· April 3, 2012 

According to the IRS; businesses, corporations and self-employed individuals can open retirement accounts including the SEP-IRA.  As a self-employed handyman the amount you can contribute is dependent on your profit for the year. It is not easy to calculate your allowable contribution.  Always looking for a bargain, I opened a SEP-IRA at one of the large discount mutual fund families. …

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