# General Business questions



## 042500hd (Oct 10, 2004)

I've been reading on here for a while and I've got to say that it's pretty amazing how everyone helps each other out this is definetley the best board I've ever been on. Anyhow I bought an 04 GMC 2500hd and put a new boss plow on to do a few driveways. I wanted to break even this year and next year make some vacation money. I put an ad in the paper to get some accounts and was amazed at the number of calls I got, now I'm turning people away. I want to get insurance but I'm getting quotes that seem high to me $3500 paid in full. So my questions is $3500 hundred high for plowing insurance? And can I write off the cost of my plow, truck etc. as a business expense? If someone has an insurance carrier they recommend I'd be glad to hear about them right now I'm dealing with local people and not getting much help. I'm from Buffalo if that makes a difference.
Thanks,
Ray


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## snoluvr (Jan 17, 2004)

*business question*

I use a landscape policy for general liability which also covers snowplowing.A stright plowing insurance will run a lot higher..Just the way they work it.
I pay less than $1,000/year with 2 mill. coverage and no deductible.I write off every expense, gas, cell phone, plow, sander, sand, ins., u name it..shovels...good luck.
oh, i use national grange for my insurance.most agents have access to them.


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## The Boss (Oct 22, 2003)

Never plan on breaking even your first year.


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## Mick (May 19, 2001)

Before you start business deductions, talk to a tax preparer/attorney. You'll be limited in depreciation, etc to the months in which you are in business. You'll effectively be losing money in the long-term. When I started, my preparer showed me how, by not declaring any business expenses/income and starting the business effective Jan 1, xxxx, I'd come out ahead.

The Boss is right. You'll never break even the first year. It took me three years; even then I still showed a loss on income tax.


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## T-MAN (Jan 9, 2001)

These guys are right if I recall the feds require 5 years on a snow plow for the total depreciation. So dont expect to right of 4000.00 for your blade in one year. :salute: 
This snow plowing "thing" is not the get rich game lots of guys have learned to beleive, "I will pay for my truck and blade in a year." I think the pyramid scame will do better if your looking for quick loot. Plus ya dont have to get outa bed at 2 am.
Todd


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## bterry (Oct 30, 2003)

> everyone helps each other out


 Pretty cool huh?



> is $3500 hundred high for plowing insurance?


 Yes, but...



> I'm from Buffalo if that makes a difference.


 That's why - New York insurance rates are the highest in the country. I going out on a limb here, but - The people here that are paying less than $1000 are not from New York.

Hopefully someone *from New York* will prove me wrong.

Another thing that makes a BIG difference is that you currently do not have GL insurance. Many companies in New York will sell it, but not to anyone that doesn't have an existing policy. They typically look for at least two years with no claims.

With all that said, try Farm Family. And I think Erie will also sell it to you. Those outside New York may be using Farm Family or Erie and tell you that they pay alot less. The key here is that are outside New York.

Also, I have looked for a long time and found that NO ONE (in New York) will sell straight Snow Plowing insurance, it must be a rider on a contractors, carpentry, or landscaping etc. policy.

Good luck.


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## henry4 (Oct 20, 2004)

*excelerated depreciation*

you can depreciate most new capital expenditures on an accelerated basis until the end of this year. The government passed this temporary law to incorage spending. We can use it to offset income. check with your accountant.


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## plowman777 (Dec 15, 2002)

you can deduct the entire amount the first year up to 100k of business equip...called section 179....i am saving 6,500 this year on taxes that would have been flushed by buying a new truck and plow...however equip does not have to be new to qualify


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## Mick (May 19, 2001)

plowman777 said:


> you can deduct the entire amount the first year up to 100k of business equip...called section 179....i am saving 6,500 this year on taxes that would have been flushed by buying a new truck and plow...however equip does not have to be new to qualify


I think it still applies that you cannot use section 179 to show a loss. In other words, if you use all your other deductions and have any income, then you can use 179 to deduct up to the amount of remaining income.
http://assembler.law.cornell.edu/uscode/html/uscode26/usc_sec_26_00000179----000-.html

it is unlikely that a person in the first year of business would have that much profit.

*BUT* - be careful using 179 even if you do have sufficient income especially if you use your vehicle for personal use:
http://www.turbotax.com/articles/WatchforaHiddenPitfallintheSection179Deduction.html


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## plowman777 (Dec 15, 2002)

thats right Mick....but you can use it to offset other income you may have..so it works for me cuz plowing is a part time biz...or if the person has income from landscaping or whatever...so chances are the person has other income from somewhere...and yes the equip has to be used for 50% or more business use.


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## gpin (Dec 5, 2003)

On the vehicle deduction, I think you have the opportunity to write off anything 3/4 ton or larger in one year or in multiple years depending on your tax situation. If your only business is snow removal, you may be limited to the months you work, but you could also list yourself as a landscaper or GC. The above posts have a good point that it is difficult to make money on snow removal alone. I'm a gc who owns and maintains my own buildings so I need snow removal and the work for others is a natural extension of my existing business. If I had to rely on just plowing for others to make a profit, I would not be so eager to plow snow.


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## 042500hd (Oct 10, 2004)

*THanks*

Thanks for the input guys. I'm a life safety engineer fulltime and I'll be plowing part time so I'm not looking to get rich plowing just make a little extra. I was really hoping that losing money by purchasing the truck and plow and other items would help take the egde off my the taxes I pay at my regular job. I think I'll just let a CPA handle it this year.


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## gpin (Dec 5, 2003)

HD, sounds like you have some good advice from a CPA and at the very least you can write off the vehicle. Good luck.


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## cet (Oct 2, 2004)

For guys just starting out and may not make much money. Income tax is on a scale. The people that don't make much money don't pay a lot of tax. Someone making $20,000 isn't going to pay the same tax percentage as someone making $50,000. If this year you are going to make a small amount your expenses are only saving you a small amount. It is better to have lots of write offs when you are making more money. Don't be in a real hurry to write everything off A.S.A.P. I hope that made sense.


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## North Country (Nov 14, 2003)

$3500 for a snow policy in NY is excellent. You must have an agent in your corner because most people could never get a snow policy only.

Folks, be sure your policy states snowplowing, if it doesn't they may still pay on a claim against you but it is very possible that you will never be able to get a CGL policy again... from anyone......or if you had a large slip and fall suit and didn't name snowplowing on your policy, a small broker may not be able to cover because they thought they were insuring window washing not snow! - Bye - Bye House, Car, Kids college.

We have spent a lot of time at our insurance agent this year, Can you tell? - michael


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## Mick (May 19, 2001)

North Country said:


> We have spent a lot of time at our insurance agent this year, Can you tell? - michael


Yes, obviously you got educated regarding how GL works. Amazing, some of the stuff I read on here. Seems like the ones who "can't afford it right now" or say "I only do one or two" are the ones who need it the most.


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## DJL (Oct 28, 2003)

If you should learn anything else from this site it is to speak to attorney's/lawyers for legal questions, accountants/CPAs for tax questions, etc. By listening to some internet guy/gal you don't know say "do this or do that" be VERY careful. There advice could be sound, but it could also be dead wrong for YOUR particular situation.

Take this advice and/or recommendations and speak to your legal/tax advisory. There are in fact ways to write off all of your expenses (up to some limit) but it may be more beneficial for you to depreciate it since you are planning to "break-even" this year.

And another thing, how did you provide quotes and estimates and line up all these jobs without first knowing one of your major expenses, INSURANCE?


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## usabestsnoplowr (Nov 6, 2004)

Yes dont go it alone. You will get in a jam.


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