I have a bike repair LLC that I run out of my basement. Sometimes customers bring me parts that they have purchased for me to install. Other times I will provide parts that I have purchased. For example, they come to me for a tune-up and I have a bike chain (that I have purchased) that works for them, and so I use that chain. They pay me for the tune-up and the chain in one check. So say the tune-up costs $100 (all labor) and the chain cost me $40. I get a check for $140.
For tax filing purposes, must I claim income of $140, and then claim expense of $40? Or would it be possible to only claim income of $100 and not claim any expense for this transaction since essentially the customer totally reimbursed my expense.
It would sure make my rudimentary bookkeeping system a lot easier if I only had to report the labor dollars, and not expense the parts that are reimbursed.
Thanks for your thoughts,
Pete
