Most Small Business Returns Are Getting Cost of Goods Sold Wrong

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Most Small Business Returns Are Getting Cost of Goods Sold Wrong

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Cost of goods sold isn't just a special category of expenses — for tax purposes, it's actually part of the definition of gross income, and only manufacturing, merchandising, and mining businesses qualify to report it. Jeremy breaks down what Treasury Regulation 1.61-3 actually says, why service businesses shouldn't have COGS on their returns even when the financial statements show it, and why getting this wrong can be catastrophic for cannabis businesses operating under IRC Section 280E.

Connect with Jeremy
https://www.linkedin.com/in/jwellstax
https://www.steadfastbookkeeping.com

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https://www.youtube.com/@TaxinAction

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This podcast is a production of Earmark Media

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