Question by Jake C: With small business taxes do I put income as the total amount of money I’ve gotten or total profit?
I started a small business in 08 selling/repairing computers. So if I received $ 5,000 over the course of the year but $ 3,000 was used to actually buy parts to resell do I say my income from the business was $ 5,000 or $ 2,000? I would think I would put down $ 2,000 since that’s what I made in profit but I want to make sure I do this right.
Answer by artillerygirl01
if you are trying to figure the amount of money the business made to prepare a tax return, then the amount you use is your gross sales or gross receipts. (In your scenario its $ 5000). You don’t neccesarily pay taxes on that amount, but rather you use that amount to calculate your net income.
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