PDA

View Full Version : Schedule C and COGS



magicman
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.

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

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

Evan
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.

magicman
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.

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

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

Evan
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.

magicman
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'?

Evan
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".

magicman
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?

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

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