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I'm a carpenter &buy materials for the job when it begins. I charge customers for materials. Would that go under materials & supplies for expenses or under cost of goods?

Forum|Forum|6 years ago
June 1, 2019
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This is an example of what I do. I did a job for a deck and I charged the customer about $800 for supplies. The cost came up over $800 so I paid for it out of pocket, but then made sure to add it to the invoice after. I also charged for my time so it ended up coming to a total of $2100. How would I put the supplies in? Would they go under expenses for materials and supplies or inventory? I usually never have anything left over from a job. The materials are always bought when the job starts. This is my first year so I'm a bit confused.

Best answer by Hal_Al

Do not use inventory.

You may use the supplies category.

Alternatively, you can enter it as other expenses. There, you can label it, for example, as materials for Jones job.

Hal_AlAnswer

Do not use inventory.

You may use the supplies category.

Alternatively, you can enter it as other expenses. There, you can label it, for example, as materials for Jones job.

VolvoGirl

For self employment income on a schedule C you have to enter the total gross income you received (including the product, parts or reimbursements) and then you enter all your expenses. Reimbursements would be an expense. Product and parts would probably be entered as Supplies. Or you can use line 27a Other Expenses. Then only the Net Profit (or Loss) on Schedule C goes to your 1040 and gets taxed.

Go to Business tab- then Continue
Choose Jump to Full List -or I'll choose what I work on

Then…..
Business Income and Expenses - Click the Start or Update button

Then click EDIT by the business name and the next screen should be a list of topics,
Business Profile, Income, Inventory/Cost of Goods Sold, Expenses, Assets, and Final Details last.

Under Business Expenses, Click Start or Update by Other common business expenses
You should see the list of expenses and amounts you entered.
Then click the start or update button by the expense you want to add or edit.