PDA

View Full Version : Profit question



Pete0987
02-18-2017, 03:26 PM
I'm looking to start a small handy man service. My question is, say I bill someone for $500 but I spent $100 in materials. So, I only profited $400 out of the total $500 billed. How do I handle this come tax time? From the copy of the invoice that I keep for tax purposes it appears to look like I profited $500 when I only profited $400 because I spent $100 of my own money on materials.

Theresa Nguyen J.D. LL.M.
02-20-2017, 07:00 PM
Pete0987,

The cost of materials ($100) can be deducted from your gross revenue ($500) to calculate your profit ($400). How it usually works is you will be taxed on your profits of $400 but to be sure, you should consult with a CPA in your state and is familiar with the laws.

candacerhicks
03-08-2017, 04:38 AM
The cost of materials ($100) can be deducted from your gross income ($500) to compute your benefit ($400). How it for the most part functions is you will be exhausted on your benefits of $400 however certainly, you ought to counsel with a CPA in your state and knows about the laws.