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posted Apr 12, 2025 12:34:27 PM

How do I get my inventory to show cash method on my schedule c instead of accrual method?

How do I get inventory I bought this year to show it was purchased this year instead of the accrual method?

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1 Replies
Expert Alumni
Apr 12, 2025 12:39:02 PM

It depends. There are two solutions and you will be on the cash method automatically.

  1. Simply enter zero for beginning and ending inventory.
  2. Remove any purchases/inventory for 2024, then enter it as a full expense in any category you choose.  
    1. You should choose a category that is something you will instantly recognize such as supplies or other then use your own description for the expense.

According to TCJA, businesses with gross receipts below $26 million are considered eligible to use the cash method of accounting for their inventory.  

  • TCJA Comparison for Businesses: The law expands the number of small business taxpayers eligible to use the cash method of accounting and exempts these small businesses from certain accounting rules for inventories, cost capitalization and long-term contracts. As a result, more small business taxpayers can change to cash method accounting starting after Dec. 31, 2017. 
  • Revenue Procedure 2018-40 provides further details.