Find solution
My western snow plow wont move?

Tax question for sub-contract snow plowing?

  • I've been out of work for a while so I bought a plow truck a few months ago (cost me $2,100) I also bought liability insurance $100/ month... I thought this would be a good way to make some $$$ since I'm not working.. I plowed for this lawncare place for 2 weeks and now it's time for me to get paid. They need my SSN, and said if I make over $800 per year I'll have to pay taxes on it. To complicate matters a new unemployment extension has been passed and I'm now making $724/ 2 weeks unemployment. 1. How will this interfere with my unemployment? 2. If I'm paying taxes on income made from this truck, shouldn't I be able to deduct the expenses such as initial cost of truck, insurance, gas, repairs? I don't have a business, I'm just a guy with a truck trying to make a few $$ to pay bills. So far I'm over $2500 in the hole with the truck (I'm sure I could sell it for a little profit since it's prime snowplowing season) It doesn't seem logical to give up $724 in unemployment to make $600 plowing snow, then have to pay for gas, insurance & repairs on the truck. What should I do? And don't say get a job, I live in Michigan - the state with the highest unemployment in the nation. The city I'm from has the highest unemployment rate of any city in the U.S. 54% of adult males are out of work. Also I can't move since thanks to the mortgage crisis my home is now worth less than I owe on it (& I've paid over $20,000 down on the principal, so letting the bank have it is not an option either)

  • Answer:

    By law, any income you make from the plowing that's over $400 a year is taxable, and if you have enough other income to have to file a return, or if you do file for some other reason, it's taxable from the first dollar. And this income is also required to be reported to unemployment, and would most likely affect your unemployment benefits. If you don't report it, there's a very good chance they'll catch you and you'll have to pay back any benefits you got illegally. For the plowing, you could depreciate the truck and take the other actual expenses like insurance, repairs, maintenance, gas... for the miles you drive it for the plowing. If you also drive it for personal use, that portion of the costs wouldn't be deductible. The legal answer is that you need to report the income to unemployment, and also report it on a tax return and pay taxes on it. Good luck - you're in a tough situation, in a tough state, right now.

phillip b at Yahoo! Answers Visit the source

Was this solution helpful to you?

Other answers

Technically, you're trying to be self-employed while collecting unemployment. NO CAN DO!!! You are going to get caught. If you can get more contracts for snowplowing, don't put anymore claims in to unemployment. It'll REALLY cost you when you do get caught.

Micki

1) you are no longer unemployed, you are self employed. 2) Yes, you can deduct expenses so you only pay income taxes on profits. The company will probably give you a 1099 and you'll need to itemize your expenses. Talk to a tax accountant about how this all works if you have trouble navigating the IRS forms. 3) what can you do? I think the best option is always to try to make ends meet without relying on the government and unemployment programs. Try to take your plowing business up a notch and find other customers. Or, try venturing out into other business ideas. Can you start a junk hauling business using the same truck? advertise on craigslist as there is always somebody who needs to move a piece of furniture or transport a load of lumber or wants to get rid of a load of junk. Look for other ways to get a few bucks out of this truck.

SmartA$$

Related Q & A:

Just Added Q & A:

Find solution

For every problem there is a solution! Proved by Solucija.

  • Got an issue and looking for advice?

  • Ask Solucija to search every corner of the Web for help.

  • Get workable solutions and helpful tips in a moment.

Just ask Solucija about an issue you face and immediately get a list of ready solutions, answers and tips from other Internet users. We always provide the most suitable and complete answer to your question at the top, along with a few good alternatives below.