Can 1125-A (for Form 1120) be used if there is no inventory in a business selling architectural services? If so, the business expense for contract labor paid to a outsourcing contracting company should go on which line, purchases or cost of labor?
Thanks for using JustAnswer.com! I will do my best to provide you with a clear and concise answer to your tax question based on the information that you have provided.Form 1125-A is not usually used in a service business. In this case, cost of outsourced labor would be deducted on line 26 of form 1120 as part of Other Deductions. Then the expense would be separated out on a attached detail statement as Outside Services along with the other expenses included in Other Deductions. If this is an S-Corp, it will be line 19 of form 1120SIf there are additional questions, please reply to this answer so that I may assist you further. If this answers your question, please rate my performance between OK and Excellent Service so that I may receive credit for my work. Thanks for your business.
>on a attached detail statement as Outside Services along with the >other expenses included in Other Deductions.
OK. The business expense to the single contracting company for the whole year should be titled "Outsourcing Services" or "Outsourced labor and other costs" or "outsourcing costs" or another title? It includes labor cost and other charges whatsoever. Thanks.