View Single Post
  #2 (permalink)
Cash754
: To answer your question, if you have not paid yourself anything out of the business, you obviously cannot write off $10 per hour - if the business did not spend the money you can't take it off as an expense.

First thing, you should decide if you are going to account for products using a cash or accrual basis. The question is, do you carry inventory for longer than a few weeks or a month? If not, then cash accounting is fine. You take the expense of your raw materials when you pay for them. If you hold them a long time, several months, then accrual is the way to go. With accrual, your cost of goods is just ending inventory minus beginning inventory plus purchases made during the year. For taxes don't list your ingredients, just lump them all together as "ingredients" or whatever description you want to use.



All of your expenses to set up the business can (generally) be taken as expenses on your tax return. Also don't forget any mileage you put on your vehicle picking up and delivering.

If you are serious about being in business, you should get an accountant.
  Reply With Quote
Sponsored Links