Cash method zero inventory

Forum|Forum|7 years ago
June 1, 2019
1 reply
19 views

Hi, can I select cash method and then NO to the Do You Have Inventory question?? I took in several thousand dollars last year making small handmade electronic kits as my time allowed and I'm doing it again this year. Like an etsy person kind of. Or do I have to say YES to the inventory question and then put 0 for the beginning (last year was my first) and 0 for the end (because it's easier and I didn't really have any anyway)?

TurboTax Self Employed Online

Best answer by

You are not required to have inventory. You can select cash and say, "no", to inventory.

If you use cash method and your total average income for the last 3 years was less than $1,000,000 per year, you don't need to use the cost of goods sold section at all.

Instead, you can just write off your merchandise under supplies or miscellaneous expenses when you purchase it. In this case, your merchandise purchase in 2016 would be fully written off then as a business expense. Your 2017 is written off in 2017.

Anonymous

Answer

You are not required to have inventory. You can select cash and say, "no", to inventory.

If you use cash method and your total average income for the last 3 years was less than $1,000,000 per year, you don't need to use the cost of goods sold section at all.

grantbtAuthor

Level 2

Thank you. Is there a recommended category for "parts"? From your answer I'm not 100% sure. For me this would be the needle and thread like for the etsy people.