Hello David, Im New to your list, I am (100%) against discounts, This is a professional business, Many times i have been asked if i am a brain surgeon because of my prices, I have had only one call back in 32 years of servicing and tuning, and that was for a tool the customer found and was going to keep it and had a change of heart, Doctors, Lawyers, Telephone Cos, Electrical, cell phones, All professional businesses do not DISCOUNT, If you give 100% to the customer, You will get back 100% and more, enjoy your postings, Dons piano Donald Lemoine On Jan 31, 2004, at 1:37 AM, David Love wrote: > I do see where you are coming from now. I read the initial inquiry > as > whether or not one could write the discount off of one's gross income > (monies actually received). Your method is a different accounting > method > than the one I use, but I think we agree that the bottom line is a > wash. >> From a practical standpoint, most technicians keep track of income by > keeping a record of checks received and deposited with taxable portions > separated out when applicable. The returns and allowances portion of > my > return is generally blank as I just don't give refunds on tunings or > repairs. Though I see the advantage of a more complete financial > picture > if one is prone to giving discounts, I wanted to make the point that > individuals should not make the mistake of thinking they could write up > each sale as a 10% discount and think that they would save 10% on their > taxes. > > David Love > davidlovepianos@earthlink.net > > >> [Original Message] >> From: Arlin Hall <ahall12@austin.rr.com> >> To: <pianotech@ptg.org> >> Date: 1/30/2004 9:49:07 PM >> Subject: Deductibility >> >> David, >> >> You still don't see where I am coming from. (And, by the way, I am a > CPA). >> >> Business allow discounts all the time. Whether its a quantity >> discount, > or >> a frequent customer discount, or a discount or allowance to satisfy a >> complaining customer, or whatever. And they record those discounts to > know >> how much it is accumulating to. >> >> The IRS fully recognizes this and allows for it on Schedule C Part 1 >> Line > 2, >> "Returns and Allowances" (Allowances = Discounts). Just like any >> other > item >> of income or expense you need proper documentation - receipts and > invoices, >> for example. Your invoice shows a charge of $75, a discount of $10 >> and a >> net of $65. And, it just so happens that you also have a check from >> the >> dealer for $65. No Fraud, No Over or Under reporting of income. Just > more >> complete records. >> >> You certainly would want to know how many $10 checks you had written >> to >> people for referrals. Why wouldn't you want to know how much in >> discounts >> from your regular prices you had allowed? >> >> In both of my examples the starting place was $75 from a regular price > list. >> Not ficticious funny money that was then donated or written off. The >> $10 >> discount was never intended to come off the $65 price actually paid. >> I >> agree that that would be tax fraud. It would be taken from the $75 > regular >> price. As shown in my last post, 75 - 10 = 65. On my financial > statements, >> it would include the gross revenue of $75 less the discount of $10 >> with > net >> revenue of $65. It would be important to me as a businessman to know >> how >> much in discounts (and referrals) had been given in a year. And of > course, >> the income reported to the IRS would reflect that amount actually > received. >> >> Arlin Hall >> >> ------------------- >> >> David Love worte: >> >> Just to clarify. In one scenario you receive $75.00, write a >> referral > fee >> check for $10.00. When it comes time to pay your taxes you declare >> $75.00 >> worth of income and have a deduction of $10.00. >> >> In the other scenario, you write an invoice for $75.00. You receive > $65.00 >> because you gave a discount. When it comes time to pay your taxes you >> declare $65.00 worth of income (because that's what you received, no > matter >> what the invoice says) and deduct $10.00 for a discount given? >> >> If that's what you meant, it doesn't work that way. >> >> If it is to your advantage for some reason to write the invoice as >> $75.00 >> with a $10.00 discount given then that's fine. But when it comes >> time to >> do your taxes, you should only declare the money your received as the >> discount will not be accepted. If you are audited and the discount is >> thrown out, you will then have to explain that you did not, in fact > receive >> $75.00, but only $65.00. That would put you in the rare position of >> someone who declares more income than they actually received. You >> run the >> risk of the IRS not believing you. >> >> David Love >> davidlovepianos@earthlink.net >> >> _______________________________________________ >> pianotech list info: https://www.moypiano.com/resources/#archives > > > > _______________________________________________ > pianotech list info: https://www.moypiano.com/resources/#archives >
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