2013-12-22 GnuCash IRC logs

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10:02:39 <hiker> hello i know this might not be the right place to ask but how do i write off the expense of a recurring payment such as my stamps.com account of 15.99 a month?
10:04:12 <jmd> hiker: What do you mean "write it off" ?
10:04:37 <hiker> in my Schedule C 1040
10:04:50 <jmd> I have no idea what that is.
10:05:02 <jmd> Expenses are not written off.
10:05:03 <hiker> Net profit/loss for a business
10:05:22 <hiker> ok not the appropriate lingo i believe
10:05:42 <hiker> how to categorize the expense?
10:05:57 <jmd> I debt can be written off. - at which point it becomes an expense.
10:06:45 <jmd> hiker: Well, why do you need to pay it?
10:07:05 <hiker> stamps.com allows me to print my shipping from home
10:07:20 <hiker> which i must say is a huge luxury
10:07:30 <hiker> but to have this i pay 15.99 a month
10:07:39 <jmd> Well if it is a luxuary, it sounds like personal expenses.
10:07:45 <hiker> and i'm wondering how to incorporate that in my taxes
10:07:58 <jmd> and is thus, not tax deductable.
10:08:43 <jmd> what do you mean "print your shipping" ?
10:08:59 <hiker> print my own shipping labels
10:09:07 <hiker> you haven't heard of stamps.com?
10:09:25 <jmd> Not before you mentioned it.
10:09:57 <hiker> and i don't know jack about accounting so i guess we're even
10:10:00 <hiker> anyway...
10:10:32 <jmd> If you are shipping products in the course of a business, then I suppose this expense would be "Shipping Costs" or something.
10:11:15 <jmd> or "Postage and Packing Expenses" - something like that.
10:11:41 <hiker> so it sounds like it can be deducted as shipping expenses right?
10:12:07 <hiker> i know this is not legal or financial advise beyond any other binding expectations
10:12:26 <jmd> I would have thought so, but as you say I'm not a financial advisor.
10:13:32 <hiker> i'm just divided by the 'recurring payment' concept
10:13:45 <jmd> Why?
10:14:17 <hiker> i'm trying to find a coorelating sample...such as insurance premiums/payments
10:14:50 <hiker> are there any other 'recurring payments' you can think of?
10:15:08 <jmd> Electricity ?
10:15:15 <jmd> Gas ?
10:15:18 <jmd> Water ?
10:16:29 <hiker> any experience with 'equipment rental'?
10:16:55 <hiker> those above listed go under utilities
10:18:07 <jmd> At the end of the day, how you categorise your expenses (or income) depends on the nature and turnover of your business.
10:19:00 <hiker> yeah i got most of that specified by my unique industry....just my stamps.com recurring monthly payment has me stymied
10:19:10 <hiker> so i figured i come bug some accountants :p
10:19:52 <jmd> What is wrong with "shipping expenses" ?
10:20:40 <hiker> nothing i guess...
10:21:49 <jmd> on the other hand, if you don't have any other items in that category, then it might be a bit pointless to invent one for it.
10:22:09 <hiker> could it not also go under commissions and fees
10:22:18 <hiker> it's a monthly 'fee'
10:23:14 <jmd> No. A fee is something you pay for a professional service. Like a solicitor, or an architect.
10:23:45 <hiker> k...because i have had to pay some computer programmers...thanks for clarifying that one
10:25:07 <hiker> so...example....i paid 35 in nov on straight shipping + the 15.99 i can say i paid 50 in shipping
10:26:39 <hiker> or should i separate the 15.99
10:26:49 <jmd> Well I don't know much about the nature of your business.
10:27:45 <jmd> If the 50 is related to a particular contract, then you might want it to be under a category relating to that contract.
10:27:58 <jmd> whereas the stamps.com subscription is an overhead.
10:30:08 <hiker> no contracts...here's another...i pay $5.00 amonth to process credit cards...where do i categorize that
10:30:30 <hiker> maybe that will help me decide
10:30:44 <jmd> If you have no contracts, how can you be running a business?
10:30:56 <hiker> online retail
10:31:10 <jmd> That involves contracts does it not?
10:31:28 <hiker> i manufacture neck warmers and balaclavas...no contracts
10:31:42 <jmd> But when you sell one, that is a contract.
10:31:58 <hiker> hmm
10:32:12 <hiker> ok you got me on that one...this is a bit deeper now
10:32:30 <hiker> no the 50 doesn't go to a single contract
10:32:36 <hiker> nor does the 35
10:32:49 <hiker> more like 1.86 per contract
10:33:19 <jmd> So they are all shipping costs, which cannot (reasonably) be attributed to a particular sale.
10:33:27 <jmd> I would categorise them together.
10:33:41 <hiker> yes but what category?
10:33:46 <hiker> that's my issue
10:33:51 <jmd> "shipping costs"
10:33:57 <hiker> roger that thank you
10:34:13 <hiker> one more...the 5 dollar credit card processing monthly fee where would you put that
10:34:40 <jmd> "financial services"
10:35:15 <jmd> $5 per month sounds really cheap!
10:35:24 <jmd> I thought the banks charged more.
10:35:54 <jmd> or is that over and above a charge on each transaction?
10:36:18 <hiker> yes well....being a small business growing i chose to use paypal...which hosts the process...i don't have to have security compliance issues with my servers...yes I still pay .10 a transaction
10:36:36 <jmd> ok.
10:36:53 <jmd> I won't ever buy any from you because I refuse to use paypal.
10:37:03 <hiker> it's not paypal....per se
10:37:18 <jmd> Why don't you accept Bitcoin ?
10:37:23 <hiker> they just host the process, you still enter your credit card on my site...you never leave my site
10:37:42 <hiker> yeah bitcoin...i've heard the grapevine...it's growing...will keep an eye on it
10:39:05 <hiker> now you got me thinking...i can take off those transaction fees too right? under 'financial services'
10:40:23 <hiker> i wish I could just throw money at the problem and hire someone but at this stage i have to lean on the good nature of people such as yourself
10:40:29 <jmd> You must ask yourself this question. What categories would enable you (or your financial advisor) to make sensible decisions when looking at the income / expense statement at the end of the financial year?
10:42:15 <jmd> For example, you might be considering abandoning Paypal and
10:42:26 <jmd> choosing another payment method.
10:44:07 <jmd> So you would want to know how much it cost you last year to process payments.
10:44:18 <jmd> and how much it cost to ship your products.
10:44:41 <hiker> so i can get pretty descriptive in my records huh
10:45:15 <jmd> As much as you think will be useful yes.
10:45:21 <hiker> i think i'm tunneled visioned by always seeing...Utilities, wages, etc.
10:45:30 <jmd> Gnucash allows you to have subcategories.
10:48:33 <jmd> Your tax department might also have some special requirements too.
10:49:07 <hiker> example?
10:51:19 <hiker> wait...i am the tax dept.
10:52:03 <jmd> No. I meant the inland revenue or whatever they call in whatever country you live.
10:52:39 <hiker> yes the old IRS...which is why i logged in here in the first place....to ask about categorizing my monthly recurring fee
10:53:23 <hiker> but you've helped more than you know
10:54:24 <hiker> thanks again.
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12:55:28 <warlord> Hmm, looks like the extra RAM/CPU didn't really speed up the nightly build last night.
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