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New Member
posted Sep 6, 2023 5:42:34 PM

Just wondering why business owners are charging their customers shipping if it's 100% write off, or is not a 100% write off?

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1 Replies
Level 2
Apr 30, 2024 10:14:17 AM

While a business can typically deduct shipping costs as a business expense for tax purposes, it does not mean they aren't incurring an actual cost.
 

Shipping costs represent a real expenditure for the company. When a business ships a product, a carrier (like UPS or FedEx) charges them for that service. Even though the expense can be written off on taxes, the business still has to pay for that cost upfront. Therefore, many businesses charge their customers for shipping to help recoup some of these costs.

 

A tax write-off or deduction merely reduces the amount of income that is subject to taxes. It does not represent a direct dollar-for-dollar reduction in the amount of taxes owed. So, even if a business can write off 100% of its shipping costs, it still has to pay the majority of those costs out of pocket.

Charging customers for shipping is also a standard business practice, particularly for online retailers, as it helps them maintain profitability and cover the significant costs associated with packaging and delivering their products.

 

Hope that helps!