For tax purposes how do you track your steel stock, and I'm talking about a very basic stock of flatbar, sheet and plate? Do you show it as inventory or expense it out as supplies and material ? I keep a basic stock of steel for repairs and simple fabrication. For jobs that I have time to plan for I order steel for that specific job and charge the entire order and all related expenses to that job. Everything accounted for. I changed accountants this year and I'm wondering about that little stock of steel . Is it inventory?
It is not Inventory if you expense it to a Job. If you show it as inventory, then you pay Inventory Tax
Strother, Always put it in the SUPPLIES column . Don't want to pay tax on inventory, been that way over 30 yrs. Inventory accounting is for multi-million $ companies. From: Sixburgh Happy them Wowboys built a 1st class stadium for the Steelers to win # 7 in!!!!!!!!!
I agree, all of the steel I have is left over from jobs that it was bought for. Little bit here and there over the years and it adds up. Not inventory, just leftovers. I don't buy "stock" materials, don't want to pay more taxes on stuff that I've already paid taxes on in the first place.
I try not to by anymore stock than I have to but I live in the sticks. At least an hour away from any place that I can by steel with out paying a big premium . When I set up my accounting program I made the mistake of putting it in as inventory, undoing it is like unringing a bell. You can't just change it to non inventory and you can't delete it without accounting for where it went. So I'm trying to decide if it is worth the trouble . Just started with a new accountant and found I've got to fix alot of other stuff, guess I might as well fix this too.
I'm an hour away from my steel guy, but 90% of my work is up near him anyhow so it's simple to pick up while I'm in the area. But if most of your work is an hour away from your steel guy I can see the dilemma. I wouldn't stock anything if I didn't absolutely have to. I hate paying the taxes every year on equipment that I've already paid taxes on when it was bought and I see a place in the same worksheet where they ask about inventory so I do everything I can to keep from paying them taxes on steel I've already paid taxes on, hence no inventory, just some leftovers pieces. You could always buy steel for personal use and let it sit around and if you need it you have it, don't know how that would work though.
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