Location Transport

Should the shipping cost be calculated as part of the income or as a business expense?

When filing taxes for an online business, should the shipping cost be calculated as part of the income or as a business expense? Thanks so much!

Public Comments

1. both ... like this: the shipping cost that customers pay should be included in income. this allows your daily sales totals to match your bank deposits, which goes a long way toward convincing the IRS that you've reported all income if/when you're audited. then, the actual costs of shipping should be recorded and deducted as an expense -- with receipts to back up the figures, of course.
2. You take it as expense when you are paying the shipper and if the client is paying for shipping along with the product, you take it as an income. The two would then zero each other out. Hope that made sense.