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a_graton
New Member

WHERE DO I ENTER INITIAL EXPENSES FOR STARTING BUSINESS, SUCH AS CLOTHING INVENTORY PURCHASED

 
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AmyT
New Member

WHERE DO I ENTER INITIAL EXPENSES FOR STARTING BUSINESS, SUCH AS CLOTHING INVENTORY PURCHASED

If you have a business that purchases items for resale and has a constant stock of items, you are able to deduct the cost of the items only when they are sold.  Any stock on-hand is considered inventory, and is not deductible when purchased.

The inventory purchased will be included in the Cost of Purchases when inputting your Cost of Goods Sold (COGS):

  1. When you get to the screen that asks "What kind of expenses did you have for <your business>?", choose the drop-down for "Less common expenses" and select "Inventory"
  2. Click "Continue"
  3. Select "Yes, I have inventory to report"
  4. Select "Yes" to using the Cost Method to value inventory (recommended), or "No" if you use a different methed
  5. Enter the value (at cost) of your inventory at the end of the year; click "Continue"
  6. Enter the Cost of Purchases and any other expenses or inventory withdrawn for personal use

The above steps will include the cost of the items in Cost of Good Sold on your return.

There is no specific amount of gross income (money coming in) or profit that you must meet in order for your other expenses to be deductible.

Important note:  You are only able to deduct your expenses in the year that you paid them - you cannot save them for a future year.

To get to the input screens for your business:

  • Once signed into your account, click on Search at the top of the screen
  • Input "schedule c" into the search box and hit Enter
  • The first link available should be Jump to schedule c - click on this link
  • You will be taken to the screens to enter your income, business information, and expenses
When you come to the input screen for your income, simply do not enter anything. Work through the other screens that come up (business information, etc.) and then you will be able to enter your expenses.  

View solution in original post

1 Reply
AmyT
New Member

WHERE DO I ENTER INITIAL EXPENSES FOR STARTING BUSINESS, SUCH AS CLOTHING INVENTORY PURCHASED

If you have a business that purchases items for resale and has a constant stock of items, you are able to deduct the cost of the items only when they are sold.  Any stock on-hand is considered inventory, and is not deductible when purchased.

The inventory purchased will be included in the Cost of Purchases when inputting your Cost of Goods Sold (COGS):

  1. When you get to the screen that asks "What kind of expenses did you have for <your business>?", choose the drop-down for "Less common expenses" and select "Inventory"
  2. Click "Continue"
  3. Select "Yes, I have inventory to report"
  4. Select "Yes" to using the Cost Method to value inventory (recommended), or "No" if you use a different methed
  5. Enter the value (at cost) of your inventory at the end of the year; click "Continue"
  6. Enter the Cost of Purchases and any other expenses or inventory withdrawn for personal use

The above steps will include the cost of the items in Cost of Good Sold on your return.

There is no specific amount of gross income (money coming in) or profit that you must meet in order for your other expenses to be deductible.

Important note:  You are only able to deduct your expenses in the year that you paid them - you cannot save them for a future year.

To get to the input screens for your business:

  • Once signed into your account, click on Search at the top of the screen
  • Input "schedule c" into the search box and hit Enter
  • The first link available should be Jump to schedule c - click on this link
  • You will be taken to the screens to enter your income, business information, and expenses
When you come to the input screen for your income, simply do not enter anything. Work through the other screens that come up (business information, etc.) and then you will be able to enter your expenses.  

View solution in original post

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