What category of business expenses for parts which you need to keep on hand.?

Question

Carpenters need a supply of screws and nails and things which you need occasionally but don't use up all at once. This can add up to thousands of dollars of stuff. Are these in the same category as tools? How do I deduct these?

Answer 1

Claim them on schedule C line 22 - supplies not included in part II

Answer 2

They're classified as supplies. Pretty much the same as office supplies. They are consumed in the course of business, but are not billed out separately to the client.

There could also be an argument for classifying them as inventory. If you know that a job will take so many pounds of nails to complete you'd probably include the price of those nails in a quote. In that case, they'd be inventory.

Most of the time you just probably just bill those things out as "miscellaneous supplies" as a percentage of the job. In that case, they'd be supplies and you'd expense them.

At the end of the day it really doesn't matter all that much as they come off of your gross profit one way or another.

Answer 3

Nails are screws are supplies.
You can figure out your inventory of nails and screws on Jan 1, 2007 --- opening inventory.
Then find out your inventory on Dec 31, 2007 ... closing inventory.
Thus supplies consumed in 2007 are Purchases during 2007 plus opening inventory minus closing inventory.
Use any procedure that you think is convenient to calculate the value of inventory. Then stick with the method.

Answer 4

what shedule for union dues