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Where to report payments to corporations acting as subcontractors that assisted me in completing a consulting project. I'm filing as S-corp?

Forum|Forum|6 years ago
June 1, 2019
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I have am filing as an S-corp and made payments to a company that assisted me with a programming for a large consulting project. The company I subcontracted the work to is also a corporation (not sole proprietors). I understand that I do not need to issue a 1099-MISC since it's a corporation, but where do I report these costs? The payments were about $11,000. The subcontracted company wrote some pieces of some software that I also worked on which was sold to my client.

Thanks!

TurboTax Business Windows

Best answer by Rick19744

You can include them in the "other deductions" line on page 1 or if you complete the cost of goods sold form 1125-A you can reflect them there. It is one or the other.

Rick19744Answer

You can include them in the "other deductions" line on page 1 or if you complete the cost of goods sold form 1125-A you can reflect them there. It is one or the other.

*A reminder that posts in a forum such as this do not constitute tax advice.Also keep in mind the date of replies, as tax law changes.

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statistician13Author

It is my understanding that I can only use cost of goods sold if I have inventory, right? The computer program they helped developed was specifically contracted for my client as a proprietary product, so there is really no inventory, if I understand this correctly. I'll list the expenses on line 1 as you suggest. Thanks.