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I am a sole proprietor and I paid the installation costs for a client's computer network. Where/how on Schedule C do I deduct this expense?

Submitted: 742 days and 10 hours ago.

Category: Tax

Value: $30

Status:

Optional Information:
Baltimore, Maryland

Accepted Answer

Dear XXXXXXXXX -
I would record the expense in the cost of goods sold section. That way if you record the reimbursement as income it will be net out against gross profit. If you net the reimbursement against cost, it will be zero w/in cost of goods sold.

Accepts:
Expert:	Steven Meyerson, CPA
Pos. Feedback:	99.2 %
Answered:	11/11/2007

Certified Public Accountant (CPA)

CPA, Over 29 yrs experience w/individuals and small businesses. Masters in Tax, Divorce Specialist

742 days and 10 hours ago.

Reply

Reply to Steve's Post: Hi Steve ---

There will be no reimbursement.

Posted by Steven Meyerson, CPA 742 days and 5 hours ago.

Answer

Dear XXXXXXXXX -
If the installation was part of the contract, I would definitely include the amounts in cost of goods sold. Even if it wasn't think it is a good place for the cost. As an alternative, in other expenses, you could create an account called unreimbured client expenses.

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Have your own Tax question?

Question

I am a sole proprietor and I paid the installation costs for a client's computer network. Where/how on Schedule C do I deduct this expense?

Optional Information

Optional Information: Baltimore, Maryland

Accepted Answer

Dear XXXXXXXXX -I would record the expense in the cost of goods sold section. That way if you record the reimbursement as income it will be net out against gross profit. If you net the reimbursement against cost, it will be zero w/in cost of goods sold.

Reply

Reply to Steve's Post: Hi Steve --- There will be no reimbursement.

Answer

Dear XXXXXXXXX -If the installation was part of the contract, I would definitely include the amounts in cost of goods sold. Even if it wasn't think it is a good place for the cost. As an alternative, in other expenses, you could create an account called unreimbured client expenses.

Related Tax Questions

Optional Information:
Baltimore, Maryland

Dear XXXXXXXXX -
I would record the expense in the cost of goods sold section. That way if you record the reimbursement as income it will be net out against gross profit. If you net the reimbursement against cost, it will be zero w/in cost of goods sold.

Reply to Steve's Post: Hi Steve ---

There will be no reimbursement.

Dear XXXXXXXXX -
If the installation was part of the contract, I would definitely include the amounts in cost of goods sold. Even if it wasn't think it is a good place for the cost. As an alternative, in other expenses, you could create an account called unreimbured client expenses.