View Full Version : Schedule C and COGS

10-26-2009, 12:26 AM
Are these required?

I read on this page that business may deduct the costs of goods sold. http://www.irs.gov/newsroom/article/0,,id=160515,00.html

So my guess is that the COGS is not required. Also, since it is a deduction, I would think it would not be a requirement.

10-26-2009, 12:53 AM
I feel like I'm missing something.

10-26-2009, 01:29 AM
My question is are you required to fill out COGS on the schedule c?

10-26-2009, 11:59 AM
It depends on the business. Service businesses generally don't, but could as indicated by that article.

If you have ANY inventory, then COGS is necessary. The schedule is pretty straight-forward.

10-26-2009, 03:04 PM
Some of the items I sold I don't have receipts that I purchased them (just stuff I had purchased in the past, but decided to sell). Is that a problem, or should I just not include them in the COGS?

I do have receipts for the majority of my inventory, maybe 5% I don't.

10-26-2009, 03:47 PM
Include them if you know what they're worth.

10-26-2009, 04:24 PM
It won't be a problem that I have no receipt?

10-26-2009, 04:29 PM
Only if you're audited. But if you recall the transaction, I'd try to record the approximate time you bought it, what you paid, where it was, etc. It should suffice.

10-26-2009, 04:56 PM
Ok, thanks.

I had those items at the beginning of the year, would they go under starting inventory? Also, if I give something free with a purchase, is that a 'Good sold'?

10-26-2009, 05:05 PM
If this is your first year in business, beginning inventory is always 0.

Yes, you can consider it "sold".

10-26-2009, 05:20 PM
The items I don't have the receipts for were purchased last year. It wouldn't be part of a starting inventory? Or would it be added to "Purchases" since my inventorying began in the middle of the year?

10-26-2009, 05:43 PM
It is purchases.

10-26-2009, 05:46 PM
Thank you so much. You have been a tremendous help.