Are ingredients and containers considered supplies?

becca_adam2017 · ‎January 24, 2020

KatrinaB48 · ‎January 24, 2020

It depends. You can deduct the cost of supplies actually consumed and used in your business during the tax year. The supplies category of expenses, on the schedule c, includes items that qualify as incidental. An expense item will fit into this category if it meets the following requirements:

You use the items regularly in your work.
You do not include the items in inventory
The items last less than one year.
The items usually cost less than $200.

If your ingredients or containers are expected to last more than one year then they need to be entered in as assets.

Please view the IRS instructions for line by line instructions for completing the schedule c.

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View solution in original post

KatrinaB48 · ‎January 24, 2020

It depends. You can deduct the cost of supplies actually consumed and used in your business during the tax year. The supplies category of expenses, on the schedule c, includes items that qualify as incidental. An expense item will fit into this category if it meets the following requirements:

You use the items regularly in your work.
You do not include the items in inventory
The items last less than one year.
The items usually cost less than $200.

If your ingredients or containers are expected to last more than one year then they need to be entered in as assets.

Please view the IRS instructions for line by line instructions for completing the schedule c.

**Say "Thanks" by clicking the thumb icon in a post
**Mark the post that answers your question by clicking on "Mark as Best Answer"

Are ingredients and containers considered supplies?