CompNut wrote:

- quote -

Are you sure you have no office expenses yet? You didn't
buy pens, pencils, paper, toner, stamps, NOTHING??

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My Advice is to hire the tax accountant now not in the near
future.

Missy Doyle

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CompNut wrote:

- quote -

NO. Gross receipts are ALL receipts for work done, whether
or not you deposited said funds. Of course you're probably
on the right track; just make sure you do deposit all income
into the bank account.

- quote -

Yes you may, but upon audit you MAY lose that deductions.
The total cost of labor in your case therefore goes in Cost
of goods sold on page 2. Do NOT put under
"wages/salaries", and don't list it under "Other on page
two.

Best to get an accountant to look over your return before
filing it. Then employ him to help you this year. He'll
probably not charge, or may not charge, a fee for looking
it over when assured he's got you as a client from now on.

ChEAr$,
Harlan Lunsford, EA n LA
25 mar 2005

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"CompNut" <Nope[at]okay.corral.lga.highwinds-media.com> wrote:

- quote -

If you paid over $600 to any one of the other subs, they
need 1099's also (if you don't have their tax ID numbers,
include a W-9 form when you send it.

Construction accounting is generally much more complicated
than cash method, so I recommend you consult a tax pro for
this year's taxes. Just two examples: 1) construction costs
are not immediately deductible; they have to be capitalized
as inventory when you build for your own account (i.e.,
spec). The cost becomes cost of sales when the project is
sold. 2) Projects built on contract can be done on either
the completed contract method or the percentage of
completion method. This becomes an issue when projects span
more than one tax year.

Contractors are often surprised that they have zero
income/loss from the business except when they have a sale.

--
Tom Healy, CPA
Boulder, CO
Web: http://www.tomhealycpa.com

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Deduct all your Sub's payments whether you sent them a 1099
or not.

Ed

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Gross receipts are what you had as income, whether it was
deposited or not. If you got cash, which you stuck in your
magic pocket, it is still considered income and should be
reported.

Cost of goods sold are the materials you purchased.

Yes, you can add the other subs to the contract labor,
though if you were to be audited in the future the IRS might
disallow that because you didn't issue a 1099.

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Please help if you can. I'd really appreciate it.

I own a construction business just me. I paid one sub (sent
1099)in 04. I also paid maybe 4 other subs $3,500 total but
I didn't send 1099's on these (next time I will). I
deposited $110,000 in 04 and I spent $55,000 on materials .
Accounting method = cash
My questions are:
1. Gross receipts are what I deposited into my business
account? (I think so)
2. Cost of goods sold I presume is materials I bought.
(I think so)
3. I will add 23,000 to contract labor on Schedule C.
Can I add what I paid the other sub's I didn't 1099
in the Contract labor?

No office yet. Thanks for the time you took to try to help
me. I am using TurboTax Premium and will hire an accountant
in the near future. Everything else I'm o'kay with. :-)

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