Shipping charges can sometimes be quite expensive; however, in some circumstances shipping charges can be written off on your business. However, before deducting these shipping costs, there are several points of cost effective shipping to consider.
Check Out Schedule C
For instance, if you send out fliers, bills, or brochures and buy postage stamps or pay a bulk mailing rate, you can deduct this cost in the Schedule C form on Line 18. For postage costs on merchandise that is sold, these costs can also be deducted if they are a part of the manufacturing process. And, if you order items online while using the Internet, or order items by phone or by mail and they are sent to you with a packing list that is itemized with the postage costs, you can report this amount on the line labeled Office Expense on Schedule C under Part II, Expenses.
Keep Accurate Shipping Charge Record
In order to deduct these shipping charges off your business, you need to keep accurate and updated records of your shipping charges for the entire tax year. Keep all of your invoices and packing slips for merchandise ordered. Also, keep your receipts when you mail anything at package-shipping stores or the post office. To be even more organized, separate these receipts into two groups—one for shipping costs for routine business mailing and one for shipping costs for items sold. It helps to keep in mind that tax deductions decrease one’s taxable income and in turn, decreasing the amount of tax you owe to the federal government. Talking with a tax professional such as a lawyer will help you to understand your deductions so that you can utilize deductions that work best for you. For helpful information on shipping rates check out the many informative freight carrier sites online.
