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What is the difference between gross sales and net sales when reporting taxes?

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βˆ™ 2007-06-20 22:24:10

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Gross sales is how much money came in. (Let's say I sold 100 widgets at $10 each, my gross sales would be $1,000) Net sales is the profit after expenses (let's say I bought those 100 widgets from a manufacturer at $ 8 each. My profit per widget was only $2, so my net sales would be $200) In most areas, taxes are based on net sales, rather than gross sales.

2007-06-20 22:24:10
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