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Bimmer88
05-18-2008, 11:48 PM
Hey for those of you who are accountants.

Shipping expenses are write-offs correct? If so, how much? 50%? etc...

For example:

If I were to purchase large inventory from another country lets say... USA. Then they were to ship the item over here.

Okay so the Unit price is $200 for example and shipping costs is $60.

My total is $260 + GST + Customs etc... but forget about GST and Customs.

Could the shipping cost $60 be a write-off? and if so, basically I can sell the $200 item locally for like lets say... $230? with very little mark-up of course as an example.

Second question:

If I do sell locally for $290, I would still make some revenue right? or wrong?

Please let me know.

Thanks,
Steve
tenth
05-19-2008, 08:39 PM
"Writing off' the $60 as an expense on your tax return doesn't mean you get $60 back. It means it's deductible from your revenue when doing your tax returns. Your tax implications on this transaction.

Revenue - $230
Cost of Sales - $260
Gain/(Loss) - ($30)

Assuming you're at a 30% tax bracket, you're going to get $9 ($30 x 30%) back for a net loss of $21 on the transaction. You're going to have to sell it for more than the cost to make money on it....
The_Rural_Juror
05-19-2008, 09:28 PM
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Bimmer88
05-19-2008, 11:11 PM
Okay thanks for the tips that's all I was wondering and just to confirm it was a net loss.

But shipping expenses would and can be written off.
TomcoPDR
05-19-2008, 11:22 PM
Originally posted by The_Rural_Juror


*headlight flash*

Beep beep...

Yea Bimmer88, just write it off 100% if you're running a business. I file all my postage, parcels, shipping as "Postal and Courier" but your accountant might want you to title it different pending on what program/system they use.
Bimmer88
05-20-2008, 09:45 PM
Originally posted by TomcoPDR


Beep beep...


Dude... not funny. I'm quite the guy on this forum. Damn, what would you guys do without some ammusment around here?


Originally posted by TomcoPDR

Yea Bimmer88, just write it off 100% if you're running a business. I file all my postage, parcels, shipping as "Postal and Courier" but your accountant might want you to title it different pending on what program/system they use.

Thanks for the tips. I'll consult with my accountant when I feel the need to... of course they probably charge you for the too.