[JoeK]

Hi,
I have some questions on what line to put expenses for schedule C:
I have a web hosting business where I lease a server (monthly fee) and resell space to my customers.
1. Does the monthly server cost go into COGS or Other expenses?

Sometimes I fix peoples computers and need to buy parts. I don't charge them a markup on those parts, just labor. I think of the parts as a "reimbursable" item that I pass on to the customer. I put the cost of the parts on the invoice to the customer (label it "reimburseable") along with labor cost.
2. Where to I put the cost of the parts on schedule C?
(p.s. I don't have a retail sales license, so I don't want to get into trouble here... )

Thanks so much!
Joe K.

[AtlantaTaxExpert]

JoeK:

List the parts cost under "Supplies".

List the montly server cost under "Other Expenses", with the entry "Server Costs".