How do I write off materials I bought for a customer? (Wood, pipe, lights,etc) This needs to be 100% write off because they own it.

[ryanpmservices]

Supplies, assets and inventory do not give a 100% write off.

[VolvoGirl]

Yes you can enter it under Supplies.  It does give you 100% write off.  It reduces your self employment income by 100%.  You only pay tax on the NET profit and you can deduct a Net Loss against your other income.

But Some expenses, such as home office or section 179 depreciation can only be used to reduce your schedule C taxable income to zero, and not to create a loss. Excess deductions for these carry over to the next year.  And you have to answer yes to both questions about exclusive and regular use, not just one.  The area of your home office must be used regularly and exclusively for business to deduct it.

Or you checked the box on 32b saying Some Investment is Not at Risk.

[Hal_Al]

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".

[rjs]

Where are you looking for the "write off" amount? Business expenses are subtracted from your business income, not from your tax. Entering the expenses as Supplies will reduce your business income by 100% of the amount you enter. It will not reduce your tax by 100% of the expenses. The reduction in your tax depends on what tax bracket you are in.

For example, if you charged a customer $5,000 for a job, and you paid $1,000 for materials, your profit from the job is $4,000. You pay tax on $4,000 of income. Your taxable income was reduced by 100% of the cost of the materials.

[Black-Byrd]

So where do I input the material expenses? Or should I do the math on the side and only insert my taxable total? Do I put in under Inventory/Cost of Goods Sold or maybe somewhere under Business Expenses?

Using your example of a $5K job. Where would I input the $1k material? Or should I initially put that I only made $4k so that is all I will be taxed on? Thank you in advance for your assistance.

[VolvoGirl]

You enter materials under Supplies.  You should enter the whole amount you received as income and then enter the expenses and materials.  You will pay tax on the Net Profit after expenses.  

[AmyC]

On Sch C the supplies category is one option or you can list it those supplies with a description under "Other" expenses. Preparers tend to put things under supplies since it is easy and works but customers tend to like the :other" column so they can name them.

Helpful links:

Small Business and Self-Employed Tax Center - complete guide

•  About Schedule C (Form 1040), Profit or Loss from Business  
• Publication 535, Business Expenses
• Publication 583, Starting a Business and Keeping Records
• Self-Employment Taxes