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Author Topic: I took the next step...  (Read 1333 times)

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Offline alanh

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I took the next step...
« on: December 12, 2018, 09:06:02 AM »
...and started an LLc, I had enough work and business`wanting receipts so i figured it was time to step up the hobby a little, besides I could use some write-offs to help survive in the great state of Ct.... Ctriver Milling

Offline WV Sawmiller

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Re: I took the next step...
« Reply #1 on: December 12, 2018, 09:24:32 AM »
   I was advised if I was the one doing the actual operation of the mill I was still liable for any injuries claims and such so I stuck with Sole Propietorship. Keep that in mind with your risk planning. Good luck to you.
Howard Green
WM LT35HDG25(2015) , 2009 4wd Dodge PU, Kawasaki 650 ATV, Sthil 440 & 441, homemade logging arch (w/custom built rear log dolly), JD 750 w/4' wide Bushhog brand FEL

Dad always said "You can shear a sheep a bunch of times but you can only skin him once"

Offline alanh

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Re: I took the next step...
« Reply #2 on: December 12, 2018, 09:38:42 AM »
I will check into that, thanks

Offline Resonator

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Re: I took the next step...
« Reply #3 on: December 12, 2018, 10:08:01 AM »
There is a thread in Forestry and Logging called "Career change advice", that has lots of good advice. Good Luck!  
Under bark there's boards and beams, somewhere in between.
Cuttin' while its green, through a steady sawdust stream.
I'm chasing the sawdust dream.

Proud owner of a Wood-Mizer 2017 LT28G19

Offline Crusarius

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Re: I took the next step...
« Reply #4 on: December 12, 2018, 10:34:43 AM »
Make sure you know what you are doing for taxes. if the guvment don't get more than their share they tend to get a little violent.

Offline alan gage

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Re: I took the next step...
« Reply #5 on: December 12, 2018, 11:25:51 AM »
Good luck!

I'm making it an official business this year (LLC) as well. Haven't given up the day job yet. It will be interesting to see where things go next year.

Alan
Timberking B-16, a few chainsaws from small to large, and a Bobcat 873 Skidloader.

Offline alanh

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Re: I took the next step...
« Reply #6 on: December 12, 2018, 03:41:00 PM »
I`m also still at the day job, not expecting (or really wanting) things to get super busy yet, just getting ready

Offline OffGrid973

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Re: I took the next step...
« Reply #7 on: December 15, 2018, 07:05:11 PM »
Went through this a few months back and was told by someone that changing already cut trees into lumber was not something you need to charge sales tax on. Sounded insane but maybe check your laws on this as we discuss who gets their check in the govt side.
 
Good luck, hopefully it works out.  Plus when you open your business account you can get some serious $$ back initially at some banks buy just buying basic mill supplies to meet the minimum.

Also check where you mill as sometimes location can impact other policies.
Your Fellow Woodworker,
- Off Grid

Offline Magicman

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Re: I took the next step...
« Reply #8 on: December 15, 2018, 07:11:29 PM »
Be sure that your CPA knows what you are doing.  Matter of fact, my Attorney would not proceed with the legal work until I made an appoint and had a "sit down" meeting with my CPA.
Knothole Sawmill, LLC     '98 Wood-Mizer LT40SuperHydraulic   WM Million BF Club Member   WM Pro Sawyer Network

Never allow your "need" to make money to exceed your "desire" to provide quality service.....The Magicman

Offline OffGrid973

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Re: I took the next step...
« Reply #9 on: December 15, 2018, 07:17:23 PM »
Hundred a log usually cuts out the BS and keeps the conversation focused.  Usually a $300 minimum if I need to trailer the logs at all...keeps people happy and returning when the good stuff falls (walnut, cherry, etc.).  Pine only gets sawed for personal projects these days, sticking to hard woods.

Of course extras for metal, rocks, and filth.
Your Fellow Woodworker,
- Off Grid

Offline WV Sawmiller

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Re: I took the next step...
« Reply #10 on: December 15, 2018, 07:22:10 PM »
   When I got interested in setting up a mobile sawing service I checked with our state sales tax people. I thought because I was a service I could avoid sales tax. Not to be in this state. Sales or sawing (service) were both taxable so I keep records and report and pay accordingly.

   Don't make assumptions about what is taxable - ask the right people run your business accordingly. Good luck.
Howard Green
WM LT35HDG25(2015) , 2009 4wd Dodge PU, Kawasaki 650 ATV, Sthil 440 & 441, homemade logging arch (w/custom built rear log dolly), JD 750 w/4' wide Bushhog brand FEL

Dad always said "You can shear a sheep a bunch of times but you can only skin him once"

Offline E-Tex

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Re: I took the next step...
« Reply #11 on: December 15, 2018, 07:38:24 PM »
...and started an LLc, I had enough work and business`wanting receipts so i figured it was time to step up the hobby a little, besides I could use some write-offs to help survive in the great state of Ct.... Ctriver Milling
love me some write-offs!!!!!   8)

Congratulations on "officially" starting and best of luck!



Long ago I had a mentor give me some great advice when being self-employed.  He said to keep these 5-people close to you and on speed dial:

1.  cpa
2.  attorney
3.  insurance agent
4.  banker, and
5.  your pastor

it has served me well!
LT-50 Wide, Mahindra 6065
L2 Sawmill LLC

Offline Tom the Sawyer

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Re: I took the next step...
« Reply #12 on: December 15, 2018, 11:34:26 PM »
On the topic of sales tax on milling services, as far as Kansas is concerned.

Trees (and grass, crops, etc. for that matter) is considered "real property"; pruning or felling trees, or mowing grass, is exempt from sales tax.  Once the tree is cut down, it becomes "tangible personal property" and services on tangible personal property are subject to sales tax.  Cutting it into lumber, or firewood, is taxable.  Technically, raking leaves or grass is also taxable.   :embarassed:

How do I know?  Well, I got some bad advice early on.  Eventually took a tax class for small business at our local community college.  Got a rude awakening, and a determination letter from DOR.  Had to go back and pay the sales taxes on my milling services for 2 years, although I had not collected them.  Fortunately, the first two years were much slower than now.  :laugh:

Moral - don't take free advice or anecdotes, check with your DOR, CPA, or attorney to make sure you are in compliance.
07 TK B-20, Custom log arch, 20' trailer w/log loading arch, F350 flatbed dually dump.  Piggy-back forklift.  LS tractor w/FEL, Bobcat S250 w/grapple, Stihl 025C 16", Husky 372XP 24/30" bars, Grizzly 20" planer, Nyle L200M DH kiln.
If you call and my wife says, "He's sawin logs", I ain't snoring.

Offline YellowHammer

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Re: I took the next step...
« Reply #13 on: December 16, 2018, 11:41:58 PM »
Congratulations, becoming a ďrealĒ business has some nice benefits, as well as some thorns.  When you get your EIN number, that is significant milestone, also.  With your EIN, you can fill out proper tax exempt forms, at the advice of your paid CPA and tax assessor, and save some bucks.  

As an LLC, your personal liability is limited to a great extent, which is the point of an LLC, but it does have some boundaries.  For example, you must be able to withstand a true business audit and show significant corporate effort and separation, otherwise there is only limited separation and your LLC wall can be defeated.  Reducing and separating your fianancial and insurance personal and business spheres makes a big difference and allows new doors to open.  Of course, I always recommend an umbrella insurance policy for any business, just slightly more than your net worth, and it will provide not only finanancial coverage, but also provides you with an army of lawyers in case of a dispute.  As my regional insurance representative once told me when I had a possible claim being filed ďWe have the meanest lawyers around, and although thatís your premium, it our MONEY, and they arenít going to get it.Ē  Literally, just the instant and intense backlash and legal pressure brought to bear by my insurance company, for a couple years, no less, on the other party made their lawyer, who had good judgement, quit the case and essentially fire the client, who then promptly hired another lawyer, who then was informed that if they lost, and they would, the legal fees would break their clientís bank.  As a matter of fact, the client was forced to put their house up as escrow to cover the possible loss of the suit, and things got really real, real fast, and a case was never brought.  Business insurance, if you donít have it, get it.  

Anyway, congratulations.  Itís a big step.  Get somebody to make you some hats with your logo and wear them proudly.  
 
YellowHammerisms:

Take steps to save steps.

If it wonít roll, its not a log; itís still a tree.  Sawmills cut logs, trees.

Kiln drying wood: When the cookies are burned, theyíre burned, and you canít fix them.  So donít burn the cookies.

Sawing is fun for the first couple hundred boards.

Offline alanh

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Re: I took the next step...
« Reply #14 on: December 17, 2018, 12:05:39 PM »
Thank`s for the tips and advise, i`m already assuming that being in Ct. everything sold or serviced will most likely be subject to sales tax. the "day job' is a family business my Dad started in 1963 and is in the process of transition to the third generation so I do have some insight on the pro`s and con`s, most people (my wife, especially) look at me puzzled when I say I`m starting a retirement business..


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