My wife and I own a photography business. This tax season (2021) is year three of the business, and it turned a good profit. This is the first year my wife used an online print service (called Pic-Time), and I'm wondering if I can deduct the printing cost they charge us. It's a little unclear given how it's all set up. Let me explain:
A client views their online gallery at Pic-Time, and decides they want to order prints of some of the images. They place a print order, let's say it's for $1000 worth of prints (made-up numbers here). Pic-Time takes the client's money, prints the images, and mails them to the client. Pic-Time then deposits $600 in my wife's designated PayPal account for the sale, and Pic-Time keeps $400 for themselves.
My question is: Can we deduct the $400 difference as a business expense? I'm guessing we can, but it feels a little different to me than when she used to take images to a printer and print them herself and pay that $400 out of her pocket.
Thanks for the help!
-Mark
