I'm a carpenter &buy materials for the job when it begins. I charge customers for materials. Would that go under materials & supplies for expenses or under cost of goods?

[goldtreevt]

This is an example of what I do. I did a job for a deck and I charged the customer about $800 for supplies. The cost came up over $800 so I paid for it out of pocket, but then made sure to add it to the invoice after. I also charged for my time so it ended up coming to a total of $2100. How would I put the supplies in? Would they go under expenses for materials and supplies or inventory? I usually never have anything left over from a job. The materials are always bought when the job starts. This is my first year so I'm a bit confused.

[Hal_Al · Accepted solution]

Do not use inventory.

You may use the supplies category. 

Alternatively, you can enter it as other expenses. There, you can label it, for example, as materials for Jones job. 

[VolvoGirl]

For self employment income on a schedule C you have to enter the total gross income you received (including the product, parts or reimbursements) and then you enter all your expenses.  Reimbursements would be an expense.  Product and parts would probably be entered as Supplies.  Or you can use line 27a Other Expenses. Then only the Net Profit (or Loss) on Schedule C goes to your 1040 and gets taxed.

Go to Business tab- then Continue
Choose Jump to Full List -or I'll choose what I work on

Then…..
Business Income and Expenses - Click the Start or Update button

Then click EDIT by the business name and the next screen should be a list of  topics,
Business Profile, Income, Inventory/Cost of Goods Sold, Expenses, Assets, and Final Details last.

Under Business Expenses, Click Start or Update by Other common business expenses
You should see the list of expenses and amounts you entered.
Then click the start or update button by the expense you want to add or edit.

[VolvoGirl]

Are you new to self employment?  Here's some info for you

If you have Self Employment income you have to file a schedule C in your personal 1040 return. You may get a 1099Misc for some of your income but you need  report all your income.  So you need to keep your own good records.

Here is some reading material……

IRS information on Self Employment….
<a rel="nofollow" target="_blank" href="http://www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/Self-Employed-Individuals-Tax-Center"...>

Pulication 334, Tax Guide for Small Business
<a rel="nofollow" target="_blank" href="http://www.irs.gov/pub/irs-pdf/p334.pdf">http://www.irs.gov/pub/irs-pdf/p334.pdf</a>

Publication 535 Business Expenses
<a rel="nofollow" target="_blank" href="http://www.irs.gov/pub/irs-pdf/p535.pdf">http://www.irs.gov/pub/irs-pdf/p535.pdf</a>

Self Employment tax (Scheduled SE) is generated if a person has $400 or more of net profit from self-employment on Schedule C.  You pay 15.3% for SE tax on 92.35% of your Net Profit greater than $400.  The 15.3% self employed SE Tax is to pay both the employer part and employee part of Social Security and Medicare.  So you get social security credit for it when you retire.  You do get to take off the 50% ER portion of the SE tax as an adjustment on line 27 of the 1040.  The SE tax is already included in your tax due or reduced your refund.  It is on the 1040 line 57.  The SE tax is in addition to your regular income tax on the net profit.

There is also QuickBooks Self Employment bundle you can check out which includes one Turbo Tax Home & Business return....
<a rel="nofollow" target="_blank" href="http://quickbooks.intuit.com/self-employed">http://quickbooks.intuit.com/self-employed</a>