TT not factoring inventory expenses into deductions

Forum|Forum|3 years ago
February 22, 2023
1 reply
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Hi there, I have seen some other threads relating to getting inventory expenses correct but I've been unable to get the software to accept my numbers. I started this business in 2022 so I am looking at a starting inventory of $0 and ending just north of $9,000. I plug those numbers in along with the small income of ~$1,400 but when I complete the section, Inventory remains "Not started" and I am still getting taxed on the income that was not offset by home office and other deductions.

Some screenshots attached for reference, perhaps I am just misunderstanding the 'deductibility' of inventory costs. Any help appreciated, thanks!

TurboTax Self Employed Online

Best answer by Anonymous_

I am not sure why the program is showing that you did not start the inventory section, but I have an observation based upon the figures you posted.

If you started the year with $0 inventory, paid $9,198 for inventory during the year (Cost of Purchases), and then ended the year with $9,198, that means your Cost of Goods Sold is $0 (i.e., you sold nothing).

Beginning inventory PLUS Purchases MINUS Ending Inventory EQUALS Cost of Goods Sold.

Make sure your ending inventory figure is correct (which I suspect it is not).

Anonymous_Answer

Employee

I am not sure why the program is showing that you did not start the inventory section, but I have an observation based upon the figures you posted.

Beginning inventory PLUS Purchases MINUS Ending Inventory EQUALS Cost of Goods Sold.

Make sure your ending inventory figure is correct (which I suspect it is not).

stunnell85Author

That makes perfect sense, thank you! Rather than considering the current market value of my inventory, I was basing it off of what I paid for it initially.

Appreciate the help!