Payments made by customers for their own materials should be included in the self-employed income ?

[ionel_4_2006]

As a self-employed (finish carpentry), I purchase the materials I need to do the job myself, and then I bill the customer and provide the receipts. I always prepare, keep and provide separate invoices, one for materials, one for labor. The customers pay either, by one check for materials and labor combined, or separate checks, one for labor, one for materials.

Do I need to include the amounts I get for materials in my income and deduct them later? If so, where exactly and how.
Or should I only report the income I made from the actual labor alone?

[Bsch4477]

Report all payments as income and deduct all expenses paid by you as expenses. 

[ionel_4_2006]

Thanks. And where do I do that ?
1. Under Supplies Expenses or
2. Under Inventory Expenses (Cost of Goods with zero inventory at the beginning/end of the year)

[Bsch4477]

Under Expenses >Supplies