Question

Schedule C part III question

Forum|Forum|3 years ago
February 12, 2023
1 reply
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On both turbo tax and free tax USA I am noticing the same thing. This is my first time filing taxes, and I started my business in 2022 as an SMLLC. I sold on Etsy and Smugmug- a photo-selling platform. I am using the cash method, and in part II, line 22, I have my supply cost listed along with De Minimis Safe Harbor Election. I made about $5800 this year with my business. After filling everything out, my Part III Cost of Goods Sold is blank. Do I not need to worry about listing anything, such as inventory or Materials and supplies?

Thank you for the help again.

Not A Product Question

fanfare

Employee

you can deduct cost of goods sold only against those items actually sold.

supplies are a separate thing.

Z

ZachVAuthor

Understood, but I do not have an inventory from last year, and I currently do not have an inventory now. The photo prints are sold online through a lab, I never have expenses right off for the prints, and the calendars through Etsy all sold before the end of 2022. I am kind of confused about that part and if I need to fill any of those lines in

A

AnnetteB6

It sounds like you may carry an inventory of calendars throughout the year, but you do not directly have an inventory of the photo prints that you sell online because they are produced elsewhere.

If you did carry an inventory of calendars at any time during 2022, then you can complete the section about inventory and cost of goods sold. You will be asked about starting and ending inventory, which can be zero for both amounts. There will also be a place to report the cost of inventory items that you purchased or materials that you used to produce your inventory. Those amounts will determine your cost of goods sold. Be sure that you do not duplicate the reporting of the cost of supplies to produce your inventory in the general expenses section under 'supplies'.

As long as your income does not grow exponentially, simply reporting the cost of your supplies and materials used to create your products in the general expenses section of Schedule C is acceptable instead of tracking inventory and entering the details in that section.

Take a look at the following TurboTax help article for more information:

Do I need to report inventory?

@ZachV

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