Question by curiouscat: Should the shipping cost be calculated as part of the income or as a business expense?
When filing taxes for an online business, should the shipping cost be calculated as part of the income or as a business expense? Thanks so much!
Answer by Spock (rhp)
both … like this:
the shipping cost that customers pay should be included in income. this allows your daily sales totals to match your bank deposits, which goes a long way toward convincing the IRS that you’ve reported all income if/when you’re audited.
then, the actual costs of shipping should be recorded and deducted as an expense — with receipts to back up the figures, of course.
Add your own answer in the comments!