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My wife and her partner have a small S-corp. They mostly sell baskets, and things where they buy product, assemble it, and sell it. They also rep a couple of products in our area. The gift baskets and things are easy tax wise, but I was wondering about 1 part of their sales. On a few of the products they rep, they never see the product. They take orders, thru a credit card, and give it to the company, who ships directly to the customer. When this happens, they then receive a commission, which varies depending on the size of the order. This comes in the form of a check from the manufacturer they rep. My question is, how to handle this for taxes.

This is the first year of the business, and at this point, they don't want to hire an accountant..due to the costs involved. We were planning on using turbotax for business, or taxcut for business.

Do they need to recognize the product at all, or just the income from the commission on the direct ship sales?

Any suggestions on tax software for an s-corp?

Thanks!
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