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Plumbers & Auto mechanics among a few?
Do they pay income tax on the profit that they make on parts?? I had a plumber, who doubled the price of a faucet, plus charged me $70.00 for one that I had bought myself, plus labor. (I caught him, and corrected that). My husband was going to do some work on a classic car that he has, checked the price at the parts store, decided he wasn't able to do the work himself anymore, so took it to a garage. When he got the bill, the same parts that he had priced, were charged 100% more and several much more. Do they pay income tax on their profit on the parts?? OK plumbers, auto mechanics and repairmen, jump on me if you like, but you know what I am talking about.
5 Answers
- REV BLv 710 years agoFavorite Answer
The professionals time and expenses have to be paid for one way or another. I take time out of my schedule, use my paid for car, have car insurance for that vehicle, my gas money driving back and forth, stand in line, buy the part and drive back and put the part on. I spend an average of one hour and $10 in gas (or more) and you expect us professionals to discount the parts? That's not counting all the permits, taxes, bookkeeping and regulations we put up with! If your husband did what we do, you would not be writing this, you would be complaining about it! The workers comp insurance alone on employees cost as much as some people make! I am not getting rich, much to people's belief. By the way, I give away free services for widows and unemployed families. I thought of many times of just closing up, but I would have to lay off people and those less fortunate would also lose out. My tip for you is get a word of mouth referral before hiring anyone. Yes, any profit we make on parts we pay taxes on it.
- chrisLv 710 years ago
Lesson learned. Plumbers and mechanics specially those that work for larger chains always double or triple or even more the cost of parts to a customer that is their main source to increase the final bill of which they get a percentage of. Car dealers that do that are running a scam since in most cases the mechanic is getting paid a set wage and gets no percentage of the final bill. Plumbers use the pricing to run up a bill and then offer a "discount" to make it seem like your getting something for nothing. I as an independent contractor I use it to show how much a customer over pays (roto-rooter for example) and why they should choose me instead. I charge a flat hourly rate and the customer buys the parts himself from my recommendations, car work or plumbing work. That is the type of contractor you should seek out next time.
@ as you can see by their posts unscrupulous plumbers and mechanics attempt to justify their methods and practices by stating they do so to cover their costs. Giving the impression that their labor costs are low and that the initial cost will be low as well then your hit with a much higher final tab. That's in part why laws were established that an estimate must be within a certain percentage of the higher final bill. With my method I know what my costs are for business expenses gas, truck wear etc. and how long it takes to get a job done, so I know how much too charge for labor from the get go hence no hidden costs. The customer then is able to control his/her costs by acquiring the materials themselves at the best price they can find. Then all manufactures warranties are then born by the customer and then replacement costs again are reduced to them. Buyer beware is the lesson learned here.
- CARL G HLv 710 years ago
to start with both plumbers and mechanics have one thing they both must attempt to do, avoid return work! most try to purchase higher end parts as they are more trusted for durability though there can be no guarantee of this. there is however a shop standard that mechanics must follow if employed by a regular shop and that standard is a parts mark up standard. If a shop must pay 20 dollars for a pump the rate of mark up is generally 35% or more depending on the shop. why? the shop takes into account the labor needed to research the part, order the part, pick up the part and deliver the core. if this tab were added to the labor costs of the job the customer would be hit far worse. example= parts counter man 1 hr rate 30 dollars, parts delivery person 12 dollars for an hour clerk for billing the part 1/2 hour rate 15 dollars. 57.00 dollars for a part cost 20. or 77 dollars to the customer bill.
Source(s): 32 year mechanic - Larry ELv 710 years ago
After they deduct their cost for the job they have to pay income tax on the profit they made from the job.
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- Nancy SLv 410 years ago
I applaud REV B's answer! My husband owns a garage and I am the service writer. The only way we can stay in business is mark up the parts. We live in a less than modest house and drive 15 year old cars. We are not getting rich either! Get estimates before you hire anyone. If you don't, it's your fault!
Source(s): GARAGE OWNER