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Timbuck
09-08-2014, 09:30 AM
I've just ordered some more belts and discs for my sander....And I wondered if anyone else takes stock of these and other consumable items that are used in the workshop..eg: various glues, bandsaw blades, shellac, wood stain, laquer, wire wool, disposable knife blades, cotton buds, rubber gloves, dust masks, Plastic bags, Abrasive sheets, marker pens, pencils, wax polish, masking tape, binding tape, propane canisters, Packaging materials, ect: etc: ..all these things cost money and have to be replaced at regular intervals :(

Pete Howlett
09-08-2014, 10:40 AM
With 20 years of accounts I know these costs and factor them into every build. If it's your hobby, then it doesn't matter because you are doing it for the love of it, unlike a business which exists primarily to put food on the table and pay the rent...

rudy
09-08-2014, 11:44 AM
In the U.S. of coarse.
Every item used for the production, packaging, or shipping of instruments is expensed. I even tally mileage for every trip to obtain supplies or even a run to the post office to ship anything instrument-related. All of those expenses come directly off the tax burden that comes from the "profit" side of the equation. Even if you can't write off consumables on your taxes all of that must be kept track of if you want an accurate picture of what your gross and net income is.

Pete Howlett
09-08-2014, 12:03 PM
Likewise here in the UK - everything consumed is set against your tax bill - these are the 'variable costs' in accounting terms.

Inksplosive AL
09-08-2014, 03:59 PM
My business is a bit different than yours but I do go through my share of consumables. Its all cost of doing business. My advise to anyone in business is hire an accountant, you can likely write off his fee.

~AL~

Beau Hannam Ukuleles
09-08-2014, 04:53 PM
I have to check into the tax break for having a workshop at home

taylordb
09-09-2014, 12:13 AM
That is a really common tax write-off Beau. The space has to be used only for business (which you can easily prove)....then it is just the percentage of square footage of your shop relative to the entire square footage of your house (including shop). In your case I would recommend it....could save you a lot of $$.

Flyfish57
09-09-2014, 06:47 AM
I have to check into the tax break for having a workshop at home

Find yourself a good CPA. I have a good friend who keeps me on track with the business side of all this. I really don't know too much about it all, except I write everything to do with the ukuleles off. Most consumable items are written off as Cost of Goods (COGS), large tools are written off over several years, My basement and one office/bedroom are tax write offs, as are workshops I attend, Trips to conventions, ukulele festivals. Wasting time on the internet isn't though!

Keeping track of all this takes a lot of time, but is really worth it.

flounder
09-09-2014, 07:58 AM
Wasting time on the internet isn't though! .

Surely this is legitimate research and development? No?

thistle3585
09-09-2014, 09:25 AM
Since business practices were touched on, I'm curious how many builders are incorporated? Trying to decide whether to be a s-corp so I can buy my consumables tax exempt as well as open me up to buy from a broader range of suppliers.