Craft business

Started wreath business last year, cash based. Purchased $7895.00 in supplies, I don’t keep inventory- how should I list supplies? Mesh, Ribbon, Signs, Burlap? Had sales of $3100.

Also, do I list my shipping costs in supplies expenses? Thanks

posted

Since you are a small business taxpayer, you can choose not to keep an inventory.

See https://www.irs.gov/instructions/i1040sc#idm140495537087392

Thus, you can enter the supplies on Line 22 of Schedule C (including shipping costs). However, you have to make sure you bought those supplies during your tax year and that deducting that amount of supplies clearly reflects your income for the tax year.

See https://www.irs.gov/instructions/i1040sc#idm140495537550288