I hire independent contractors for events I coordinate. I 1099 these workers. Even though I don't sell products, would I categorize these contract labor expenses in the cost of goods account on my form 1120-S?

ANSWER

The BIDaWIZ Team's Answer:

You would not report contract labor in the cost of goods account per IRS guidelines. Labor costs are usually an element of cost of goods sold only in a manufacturing or mining business. Thus, you should categorize the expenses as part of payments to contractors in the general and administrative section of your financial statements. This is referenced in IRS Publication 334 & IRS Fact Sheet 2006-23.