How does the deduction of trade goods work in the tax return?
November 21, 2022 | 40,00 EUR | answered by Wolfgang Lenzner
Dear Tax Consultant,
My name is Erika Pohlmann and I run a small retail business. In my tax return, I would like to deduct the cost of goods sold, but I am not sure how exactly to do that. So far, I have simply recorded the goods as operating expenses, but I am not sure if that is correct.
Currently, I am facing the challenge of not knowing exactly how to properly report the cost of goods sold in the tax return. I am worried that I might be doing something wrong and that there could be potential tax payments or other consequences.
Could you please explain to me how the deduction of goods sold works in the tax return? What information do I need to provide and how can I ensure that everything is correct? Are there any ways to save taxes or to make the deduction more effective?
Thank you in advance for your help and support.
Sincerely,
Erika Pohlmann
Dear Mrs. Pohlmann,
Thank you for your inquiry regarding the deduction of merchandise in your tax return. It is important that you accurately report your business expenses to avoid potential additional payments or other tax consequences. I will now explain in detail how the deduction of merchandise in the tax return works.
Basically, you can claim the costs of the merchandise you purchased for sale in your retail business as business expenses in your tax return. These costs reduce your profit and therefore your tax burden. It is important that you record the merchandise as "purchase of goods" or similar in your accounting so that they are recognized as business expenses.
In your tax return, you must then list the merchandise under business expenses. This includes not only the purchase of goods, but also other costs associated with the sale of goods, such as storage costs, packaging costs, or shipping costs. You can also claim these costs as business expenses.
To ensure that you report everything correctly, I recommend that you carefully keep and document all receipts and invoices for the merchandise. Make sure that the information in your tax return matches your accounting records. If you are unsure if you have done everything correctly, you can also consult a tax advisor or tax consultancy firm that can assist you in preparing your tax return.
There are also ways to save taxes or make the deduction of merchandise more effective. For example, you can proactively look for ways to optimize your purchases and reduce costs. Additionally, there are certain tax depreciation options that can help reduce your tax burden.
I hope this information helps you and answers your question regarding the deduction of merchandise in the tax return. If you have any further questions or need additional assistance, I am happy to help.
Sincerely,
Wolfgang Lenzner
