If I have a SaaS (software as a service) based company, and I am tracking cost of revenue in my accounting software, so that I have useful income statements and can track gross profit, how does that map onto my tax return (1065 in my case).
My company doesn't have inventory and a COGS deduction doesn't apply. So I'm assuming I don't fill that in the COGS line 2. But then gross profit on line 3 is not really accurate.
Do I just put the cost of revenue items down into regular expense categories below line 8 in the expenses section of the 1065, or should it be handled differently?
