Posted by KS on October 29, 2008
Most businesses require some kind of equipment in order to perform their duties. Business equipment can run quite high, and is therefore one of the biggest categories of business expenses — especially for startups.
So the question is, should you buy or rent your business equipment? Your decision should depend on how expensive the equipment is and how often you use it.
For example, if you own a landscaping business, you will probably find that you frequently need to be able to screen topsoil on site. If you have to rent one to perform many of your contracted jobs, the expense of renting is going to quickly add up, and you lose the advantage of paying a small amount to just rent a machine once and be done with it. Therefore owning a topsoil screen would be well worth the initial expense of making a big purchase.
On the other hand, if you do primarily small gardening and maintenance, you probably only need to rent gravel screeners very occasionally, when you have that odd job where a client wants some gravel work done. In that case, you are better off just renting the portable screener once, returning it when you are done, and not having to worry about maintenance, upkeep, and storage for a big, expensive piece of equipment.
Deciding whether to lease or own a piece of equipment is not always an easy choice, but it can be made easier if you look carefully at your projected usage of the equipment and weight the financial differences between purchasing or renting the equipment.
Technorati Tags: business equipment, business expenses, gravel screeners, portable screener, topsoil, topsoil screen
Posted by KS on October 27, 2008
After my first nightmare experience of doing my small business’s taxes, I have ever since tried to be as organized about my business finances as possible. I don’t know how much my recordkeeping methods resemble traditional bookkeeping, but the system works for me — quite well, actually.
I basically have two spreadsheets — one for income, and one for expenses. The income spreadsheet has a separate page, or worksheet, for every client; each page automatically totals at the top, and that total is pulled into a summary page, the first worksheet in the spreadsheet. Then I total all the individual client totals. That way I can see what I have been paid from each client, and what I have been paid total for the year.
My expense spreadsheet is similar: a worksheet for every expense category on Form 1040 Schedule C, and a summary page that provides a grand total. This makes filling in my tax forms really easy — I just go down the list and fill in the total in each expense category.
Business property expenses may be a little more tricky for you. If you have paid for cost seg engineering (which is an expense in itself, by the way), you may have reclassified some of your business property to depreciate faster, allowing you to take a greater deduction every year — and catch up on past deductions you have missed out on. Cost segregation services, also known as cost segmentation services, can therefore save you money, though they do complicate your tax filing a little!
The point is that if you are as organized as possible, doing your business taxes doesn’t have to be as complicated or as difficult as many people find it. A little effort spent throughout the year saves you a lot of time on Tax Day!
Technorati Tags: bookkeeping, business finances, business taxes, cost seg engineering, cost segmentation services, cost segregation services