DIRECT LABOR FOR COGS

[ELLIES_NANA]

IN A RESTAURANT AND NIGHT CLUB CAN YOU DEDUCT BARTENDER AN COOK WAGES AS DIRECT LABOR TO CALCULATE THE COGS?  WHAT ABOUT SERVERS?

[Anonymous_ · Accepted solution]

See https://ttlc.intuit.com/community/business-taxes/discussion/schedule-c-question-should-employee-wage...

[Critter-3]

NOTE ... a restaurant really doesn't have COGS since you do not keep an inventory of products to sell.  You buy products that are used up (consumed) in a short time frame so you just enter all the food/drink products with the other supplies you purchase like paper products, cleaning supplies, etc  under the SUPPLIES category.  You are not required to breakdown the supplies total entered since TT is an income tax program not an accounting program.  If the return is ever audited you can provide the IRS a detailed list of the supplies from your accounting records ... they would also require reciepts so make sure to also keep them in some fashion.