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May 22, 2025
Question

Cost of Goods Sold (NO Inventory) VS Supplies as Expenses

  • May 22, 2025
  • 1 reply
  • 0 views

Trying to figure out the correct way to classify parts for an auto repair shop. If I order parts or tires for the vehicle that we are working on, will whatever I paid for those parts be categorized under COGS or parts as an expense?

All those parts are gonna be in the invoice that the customer pays. 

 

Where should I put the cost of the parts that I buy from the vendors? 

1 reply

May 27, 2025

You will need to report the parts as Cost of Goods sold since these costs are directly related to your business as an auto repair shop.  Please see A Mechanic's Guide to Tax Deductions for other information as it applies directly to your business.

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