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#6
10-23-2004, 09:50 PM
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 Re: How do you deal with expenses that effect more than one year? Gary Goodman <XgaryXg7X[at]yahoo.com> wrote: - quote - > dfm2a3l0t2[at]spymac.com says...
There's an exception generally applicable to businesses> > "Doc" <docsavage20[at]REMOVEhotmail.com> wrote: > > > I recently opened a small business (sole proprietorship) > > > which involves distributing homemade novelty CD's. There are > > > certain expenses such as mailers, CD roms, jewel cases, > > > labeling materials etc. that get used over the course of > > > time. So even if you get income in '04, you could be using > > > packaging, CD rom, mailing label, etc. that was bought in > > > '03. > > > > > How would you treat something like this? > > Unless you are an accrual-basis taxpayer (if you don't know > > what that is, you aren't one), you deduct the expenses on > > the return for the tax year in which you paid them. It > > doesn't matter when you actually _use_ the items. > > > You report the income in the year in which you actually > > receive it. > Even if the original poster doesn't know if he/she is on the > accrual basis, he/she may be on it. Afterall, having > inventory tends to push people into accrual basis. grossing less than $1 million. These businesses may be on a cash basis but still use an accrual-like scheme for inventory. AFAIK, no kind of business can treat expenses to acquire inventory as if they were cash-basis expenses; even cash-basis businesses have to account for inventory or treat inventory as if it were non-incidental supplies (i.e. you expense it as it's used up). -- Chris Green << -------------------------------------------------> << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org > << -------------------------------------------------> |
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#5
10-22-2004, 07:42 AM
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| Re: How do you deal with expenses that effect more than one year? dfm2a3l0t2[at]spymac.com says... - quote - > "Doc" <docsavage20[at]REMOVEhotmail.com> wrote:
Even if the original poster doesn't know if he/she is on the> > I recently opened a small business (sole proprietorship) > > which involves distributing homemade novelty CD's. There are > > certain expenses such as mailers, CD roms, jewel cases, > > labeling materials etc. that get used over the course of > > time. So even if you get income in '04, you could be using > > packaging, CD rom, mailing label, etc. that was bought in > > '03. > > > How would you treat something like this? > Unless you are an accrual-basis taxpayer (if you don't know > what that is, you aren't one), you deduct the expenses on > the return for the tax year in which you paid them. It > doesn't matter when you actually _use_ the items. > You report the income in the year in which you actually > receive it. accrual basis, he/she may be on it. Afterall, having inventory tends to push people into accrual basis. Gary -- You can probably X figure out X which letters to X delete to derive my email address X. << -------------------------------------------------> << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org > << -------------------------------------------------> |
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#4
10-18-2004, 05:16 AM
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| Re: How do you deal with expenses that effect more than one year? Doc wrote: - quote - > I recently opened a small business (sole proprietorship)
Inventory costs, or expenses. It depends on whether you> which involves distributing homemade novelty CD's. There are > certain expenses such as mailers, CD roms, jewel cases, > labeling materials etc. that get used over the course of > time. So even if you get income in '04, you could be using > packaging, CD rom, mailing label, etc. that was bought in > '03. > How would you treat something like this? package the CDs as they are ordered or have them pre-packaged. << -------------------------------------------------> << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org > << -------------------------------------------------> |
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#3
10-18-2004, 04:57 AM
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| Re: How do you deal with expenses that effect more than one year? "Doc" <docsavage20[at]REMOVEhotmail.com> wrote: - quote - > I recently opened a small business (sole proprietorship)
Unless you are an accrual-basis taxpayer (if you don't know> which involves distributing homemade novelty CD's. There are > certain expenses such as mailers, CD roms, jewel cases, > labeling materials etc. that get used over the course of > time. So even if you get income in '04, you could be using > packaging, CD rom, mailing label, etc. that was bought in > '03. > How would you treat something like this? what that is, you aren't one), you deduct the expenses on the return for the tax year in which you paid them. It doesn't matter when you actually _use_ the items. You report the income in the year in which you actually receive it. -- D.F. Manno dfm2a3l0t2[at]spymac.com The average man doesn't want to be free. He simply wants to be safe. (H.L. Mencken) << -------------------------------------------------> << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org > << -------------------------------------------------> |
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#2
10-18-2004, 04:38 AM
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| Re: How do you deal with expenses that effect more than one year? "Doc" <docsavage20[at]REMOVEhotmail.com> wrote: - quote - > I recently opened a small business (sole proprietorship)
Either as inventory or as an expense in the year incurred as> which involves distributing homemade novelty CD's. There are > certain expenses such as mailers, CD roms, jewel cases, > labeling materials etc. that get used over the course of > time. So even if you get income in '04, you could be using > packaging, CD rom, mailing label, etc. that was bought in > '03. > How would you treat something like this? the case may be. -- David M. Woods, EA, ChFC, CLU Woods Financial Services Norwood, MA 02062 www.woods-financial.com << -------------------------------------------------> << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org > << -------------------------------------------------> |
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#1
10-18-2004, 03:41 AM
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| Re: How do you deal with expenses that effect more than one year? Doc wrote: - quote - > I recently opened a small business (sole proprietorship)
Inventory?> which involves distributing homemade novelty CD's. There are > certain expenses such as mailers, CD roms, jewel cases, > labeling materials etc. that get used over the course of > time. So even if you get income in '04, you could be using > packaging, CD rom, mailing label, etc. that was bought in > '03. > How would you treat something like this? << -------------------------------------------------> << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org > << -------------------------------------------------> |
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10-18-2004, 03:21 AM
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| Re: How do you deal with expenses that effect more than one year? Doc <docsavage20[at]REMOVEhotmail.com> wrote: - quote - > I recently opened a small business (sole proprietorship)
CDRs, jewel cases, etc. are inventory ("Cost of Goods Sold").> which involves distributing homemade novelty CD's. There are > certain expenses such as mailers, CD roms, jewel cases, > labeling materials etc. that get used over the course of > time. So even if you get income in '04, you could be using > packaging, CD rom, mailing label, etc. that was bought in > '03. > How would you treat something like this? Mailers, ink, mailing labels, etc. are office supplies. (Yes, I know that the mailer probably costs more than the CDR. So what?) Seth << -------------------------------------------------> << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org > << -------------------------------------------------> |
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#-1
10-15-2004, 12:47 AM
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| How do you deal with expenses that effect more than one year? I recently opened a small business (sole proprietorship) which involves distributing homemade novelty CD's. There are certain expenses such as mailers, CD roms, jewel cases, labeling materials etc. that get used over the course of time. So even if you get income in '04, you could be using packaging, CD rom, mailing label, etc. that was bought in '03. How would you treat something like this? << -------------------------------------------------> << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org > << -------------------------------------------------> |
| Tags |
| deal, effect, expenses, year |
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