I started an LLC this year and need to know if I have to report inventory? I make jewelry and sale online and at gem shows. I keep track of all my inventory in excel.

[michellezale8]

If I have to report to the IRS the inventory, how do I count all the inventory I had before I started the business?

[Vanessa A]

As a small business, you do not have to use an inventory method, you can choose to list the items you buy as supplies or costs of goods sold.  This means you deduct the items when in the year you purchase them instead of when they are used up. 

You can count the inventory you had before you started as start up costs if you were buying it with the intention of starting the business or you could include them as Cost of Goods Sold. 

You can also choose an inventory method such Specific Identification Method, LIFO and FIFO.