Other deductions? Form 1065

Discussion in 'Tax' started by sistercheng@yahoo.com, Mar 29, 2005.

  1. Guest

    Hi All,

    I have a simple question for you but not simple for
    me(conceptually confused).

    Where should I put the following expense on Form 1065

    1) Internet hosting fee(we are an internet retailer)
    2) Travel & Meal etc.
    3) Tools, supplies. etc.
    4) Credit Card processing fee, transaction fee.

    None of these should be counted as "cost of good sold",
    right? Then I can not find anywhere else on the Form 1065
    except in Deduction section"line 20: other deductions". It
    has a note "attach statement", what kind of statement is
    acceptable for this purpose? How much detail has to be put
    in there?

    Thanks for your suggestions

    April

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    , Mar 29, 2005
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  2. <> wrote

    > I have a simple question for you but not simple for
    > me(conceptually confused).
    >
    > Where should I put the following expense on Form 1065
    >
    > 1) Internet hosting fee(we are an internet retailer)
    > 2) Travel & Meal etc.
    > 3) Tools, supplies. etc.
    > 4) Credit Card processing fee, transaction fee.
    >
    > None of these should be counted as "cost of good sold",
    > right?


    It's ~possible~ that you could look at the credit card
    charges as a "cost of goods sold" as you wouldn't incur
    those charges without the sale, but in practice it is
    probably more common to take them with "other deductions"
    and the other bank charges (which you would have even
    without the sales).

    > Then I can not find anywhere else on the Form 1065
    > except in Deduction section"line 20: other deductions". It
    > has a note "attach statement", what kind of statement is
    > acceptable for this purpose? How much detail has to be put
    > in there?


    Create a list with a description and the amount. The total
    of which goes to Line 20.

    Create the header with the business name and tax ID number,
    and "Form 1065" and the year.

    Remember that only 1/2 the meals and entertainment are
    deductible.

    --
    Paul A. Thomas, CPA
    Athens, Georgia
    taxman at negia.net

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    Paul A Thomas, Apr 1, 2005
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  3. Thomas Healy Guest

    "" <> wrote:

    > I have a simple question for you but not simple for
    > me(conceptually confused).
    >
    > Where should I put the following expense on Form 1065
    >
    > 1) Internet hosting fee(we are an internet retailer)
    > 2) Travel & Meal etc.
    > 3) Tools, supplies. etc.
    > 4) Credit Card processing fee, transaction fee.
    >
    > None of these should be counted as "cost of good sold",
    > right? Then I can not find anywhere else on the Form 1065
    > except in Deduction section"line 20: other deductions". It
    > has a note "attach statement", what kind of statement is
    > acceptable for this purpose? How much detail has to be put
    > in there?


    All of them go on line 20. "Schedule" is a fancy name for
    "list." If you are preparing the return by hand (rarely a
    good idea), a hand-written list that is stapled to the
    return will do. I will usually group similar expenses in one
    line of the list - for example, various office expenses are
    represented by one line. If something is "large" I'll list
    it separately.

    Just remember that only 50% of the meals portion goes on
    line 20. The rest goes on Schedule M.

    --
    Tom Healy, CPA
    Boulder, CO
    Web: http://www.tomhealycpa.com

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    Thomas Healy, Apr 1, 2005
    #3
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