I own a solar contracting company and am a little confused how to handle the following:
For payments to subcontractors, I use a COGS account named "subcontractors expense" so I can track job cost accurately to include any subcontractor payments for each job. It looks like the IRS does not consider subcontractor cost as COGS, since they have "contract labor" listed under Schedule C Part II Expenses line item 11. There is a "cost of labor" line item 37 in Part III COGS section, but examples seem to suggest that is for employees direct labor not subcontractors. I do have the ability to track employee labor and subcontractor expenses separately for each job, and would prefer to do that so I know accurately the profit per job. I also have some employee work that is not job specific, i.e. for sales, administrative, etc which I would not want to assign to a specific job. What accts and what tax mapping should I use for:
a) subcontractor costs for a specific job
b) employee labor for a specific job
c) employee labor for general work, not a specific job
A second question on acct and tax line mapping for construction/performance bonds I need to buy as well as contractor registration fee to do work in certain cities or counties. I sometimes do multiple jobs in one county that requires a bond and to pay a contractor registration fee, so it may not make sense to track per individual job. What acct should I use for bond costs and which tax line mapping? What accct should I use for registration fee and which tax line mapping?
I use Quickbooks Desktop 2020 Contractor Edition.
Thank you
