David Hendley on mon 21 oct 02
In Texas, the comptroller is specific that shipping charges are added
to the price of the product, and then sales tax is collected on that
I don't know about other states.
When I pre-pay shipping, I keep the receipt from UPS or the Post Office
and record the amount as an expense in my daily ledger.
When I receive payment for the package, I count the entire amount
as income on my daily ledger.
This is the best way to account for shipping charges because it
is consistent with sales tax receipts and the system works even
if you charge a standard amount for shipping that turns out not
to be the actual amount you paid the shipper.
Shipping rates have really shot up in the last couple of years.
For retail sales I now charge 15% with a $6 minimum for shipping
(except for potter friends who want a mug!).
That's usually pretty close to the actual amount for my work.
I make a little extra for packages going to Oklahoma, and come out
even or lose a few cents on shipments to California.
----- Original Message -----
> I was wondering how others noted shipping cahrges on their monthly income
> and outgoings. Do you count it as an expence then count the customers
> reimbursements as an income? Then are you paying taxes on it? I've been
> ignoring it on both ends, but that's getting confusing.
> Sarah House
Mayssan Shora Farra on mon 21 oct 02
I do it like I do sales tax by entering as in and deducting as out but
then i count neither at the end of the year. using a computer really helps
Marni Turkel on mon 21 oct 02
What you pay for shipping charges is an expense. What the customer
pays you for shipping is income. The expense will be deducted from
the income and therefore you will not be paying tax on it. It's a
wash, but you need to have it accounted for.
Stony Point Ceramic Design
2080 Llano Rd 1B
Santa Rosa, CA 95407
Sarah House on mon 21 oct 02
I was wondering how others noted shipping cahrges on their monthly income
and outgoings. Do you count it as an expence then count the customers
reimbursements as an income? Then are you paying taxes on it? I've been
ignoring it on both ends, but that's getting confusing.
Little Switzerland, NC
Ingeborg Foco on tue 22 oct 02
Do you charge a handling fee to cover your packing material or is that
included in your 15% flat rate?
the Potter's Workshop & Gallery
P.O. Box 510
3058 Stringfellow Road
St. James City, Florida 33956
Cat Yassin on tue 22 oct 02
I guess everyone handles the shipping differently. But for my manufacturing
business we charge the shipping to our customers as an income account and
then when we pay for the shipping its a cost of sales. I've been doing it
this way for years and my accountant hasn't suggested any other way.
Joyce Lee on tue 22 oct 02
----- Original Message -----
From: "Ingeborg Foco"
Sent: Tuesday, October 22, 2002 5:49 AM
Subject: Re: How to account for shipping
> Do you charge a handling fee to cover your packing material or is that
> included in your 15% flat rate?
> the Potter's Workshop & Gallery
> P.O. Box 510
> 3058 Stringfellow Road
> St. James City, Florida 33956
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