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Deductions & credits
On your books you should have the following:
Gross Income --- $500
Cost of Goods Sold ---- $400
Net Profit before Taxes & expenses --$100.
Note though, this is not your real profit --- you have to allocate all the other expenses ( both fixed such as rental of the building, equipment, labor etc. etc. AND variable such as postage, delivery etc. etc. ). Only after that you get your real business profit before taxes. That is what you pay taxes on -- Federal, Sate and Self-Employment ( 15.3% )
Does that help ?.
Gross Income --- $500
Cost of Goods Sold ---- $400
Net Profit before Taxes & expenses --$100.
Note though, this is not your real profit --- you have to allocate all the other expenses ( both fixed such as rental of the building, equipment, labor etc. etc. AND variable such as postage, delivery etc. etc. ). Only after that you get your real business profit before taxes. That is what you pay taxes on -- Federal, Sate and Self-Employment ( 15.3% )
Does that help ?.
‎June 7, 2019
3:10 PM