Full Version: Services or Products
From: Brian (BGALUSHA) [#3]
13 Apr 2007
To: LaZerDude (C_BURKE) [#2] 14 Apr 2007
Thanks for the feedback. I'd already decided that was the way to go and was just looking to see if others had a different approach. As usual, it just means that we have to spend much of our time working for free to keep records for the Government rather than making money for our labor that our families can use. Guess it's no great surprise that most small business fail or make no profit. I could rant further but this is not the proper forum for that.
Thanks again for your feedback.
From: UncleSteve [#4]
13 Apr 2007
To: Brian (BGALUSHA) [#3] 14 Apr 2007
If you report on a cash basis, you don't have "inventory" per se.... You deduct what you PAID for and do not deduct any payables.
When you sell the items, you cannot reduce the income by your cost of inventory since you already took the deduction and "double dipping" is not allowed.
As a part-time, home based business, are you registered as a business with your local authorities? Do you have a business account, resale number, etc.?
At the hobby level there are choices but you must make a profit within a certain number of years or you will not be able to deduct your costs..