Ask TaxMama.Com Tax Information With A Mother's Touch Published by Eva Rosenberg, MBA, EA Volume 6, Issue 255        April 16, 2004

Things to Do or  Know in April Perspective On Taxes Settled Lawsuit Servicing Satellites Haven't Filed Taxes For Ten Years Following My Wife   IRS Tax Tip - Appeal Rights   The Heir Apparent   E-Mail  This Page To A Friend Your email: Your name: TO email:

Servicing Satellites » From: Rancho Cordova, CA Dear TaxMama: I have a one person business, servicing, and selling satellite equipment. Where do put the expense of repairs by others? Is part of "cost of goods sold? If so, is it "cost of labor", line 37, or "other costs", line 39. The only other place I could think of putting it is, other expenses, line 27. (1040, Schedule C) Thank you very much in advance for your help, "mom". Bill Dear Bill, Since you're selling that service, and paying others, I'd put it under labor on Cost of Goods Sold. Be sure you issued 1099s to those freelancers, unless they were incorporated. You're doing a good job. You grasp the concept. That's what I would do - and I know we'll hear from the Pros on this one. Some will say, it should go on page 2 of the Schedule C, among Other Expenses. And some will say it goes on line 11, as Contract Labor. I include it with Cost of Goods Sold because this is a direct cost of the product or service. You only pay these guys when you make a sale - and they install it. Have fun. Best wishes, Eva Rosenberg Your TaxMama

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