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Episode 7 - Cost of Goods Sold (COGs)
FAQ: What are COGs, and why do I need to identify them and report them differently than other expenses? And where do I do this?
Main Objective: Learn how to identify expenses that need to be reported as COGs and where to report them on the different tax forms.
Description: In Episode 7 of Tax Masters, we unpack the essentials of Cost of Goods Sold (COGS), a key deduction for businesses that sell products. We explain how to calculate COGS, covering inventory costs, direct labor, and materials, and clarify its role in reducing taxable income. You’ll learn how COGS is reported on Schedule C for sole proprietors, Schedule F for agricultural businesses, Form 1065 for partnerships, and Form 1120S for S corporations. We highlight IRS guidelines, common errors like misclassifying expenses, and strategies for maintaining compliant inventory records. Plus, we offer practical tips to maximize deductions and minimize audit risks. Tune in to confidently guide your clients through COGS and tax reporting!
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By Kristy PackFAQ: What are COGs, and why do I need to identify them and report them differently than other expenses? And where do I do this?
Main Objective: Learn how to identify expenses that need to be reported as COGs and where to report them on the different tax forms.
Description: In Episode 7 of Tax Masters, we unpack the essentials of Cost of Goods Sold (COGS), a key deduction for businesses that sell products. We explain how to calculate COGS, covering inventory costs, direct labor, and materials, and clarify its role in reducing taxable income. You’ll learn how COGS is reported on Schedule C for sole proprietors, Schedule F for agricultural businesses, Form 1065 for partnerships, and Form 1120S for S corporations. We highlight IRS guidelines, common errors like misclassifying expenses, and strategies for maintaining compliant inventory records. Plus, we offer practical tips to maximize deductions and minimize audit risks. Tune in to confidently guide your clients through COGS and tax reporting!