Question

chegg Choose the response that correctly describes how a qualifying small business taxpayer can deduct the cost of their inventory. They may deduct the cost as soon as the materials are purchased, even if the product remains unsold at the end of the year. They may report the cost as depreciation on Schedule C (Form 1040), line 13. They may deduct the cost of inventory that is sold during the tax year, as non-incidental materials and supplies. They may deduct the cost in the manner used for their books and records but only after receiving IRS approval.

Answer 1

All of the basic expenses necessary to run a business are generally tax-deductible, including office rent, salaries, equipment and supplies, telephone and utility costs, legal and accounting services, professional dues, and subscriptions to business publications.

What is tax?

A tax is a mandatory financial charge or other type of levy imposed on a taxpayer by a governmental organization to fund government spending and various public expenditures, and taxation is a type of levy.

A tax deduction is a provision that lowers the amount of taxable income. A standard deduction is a single, fixed-amount deduction. Itemized deductions are popular with higher-income taxpayers because they frequently have significant deductible expenses such as state/local taxes paid, mortgage interest, and charitable contributions.

The effective tax rate is the percentage of an individual's or corporation's income that is paid in taxes. Individuals' effective tax rate is the average rate at which their earned and unearned income, such as stock dividends, are taxed.

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