Like the title says, from the filing process and tax questions to tax policy and reform, you can search and share All Things Tax here. This is the place to find answers to all your general questions that don't fall under the other categories. And just a reminder: questions about software or online filing should be posted in DIY Products.
03-28-2017 04:13 PM
We purchased a small, service oriented business last year. As a part of the sales agreement, we paid a certain percentage on the jobs the first time we completed them to the previous owner. That should be deductible, correct? How would we go about either deducting that from business profit, or adjusting the business income?
03-28-2017 05:10 PM
So what happened here is you paid the previous owner a royalty. You can deduct this on Line 10 of Schedule C as a commissions and other fees deduction.
If your business is a partnership, S Corporation, etc. then it may be a little bit different because you'll file using a different form, but this will still be deductible from your business income.
If you have any other questions I'll be glad to help.
Senior Tax Advisor (Tampa, FL)