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Tax Strategies for the Small Business Owner: Reduce Your Taxes and Fatten Your Profits by Russell Fox

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Cost of Goods Sold

Whatever you tax, you get less of.

—Alan Greenspan

If you look at any business tax form, the first section after gross receipts is for cost of goods sold. Can all businesses use cost of goods sold? What part does inventory play within cost of goods sold? What other expenses, if any, are taken within this category?

As will be seen in the first section of this chapter, cost of goods sold applies when there are tangible goods being handled by the business—something that can be touched, held, or moved. Many business owners never deal with this category of expenditures.

Can All Businesses Use Cost of Goods Sold?

“If it’s on a ...

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