I started a new business is 2024. I filed my own taxes and, being a the first time filing a business, I neglected to fill out the inventory at the beginning and end of 2024. Since we now have a great deal of inventory, it doesn't seem to make sense to start at "0." Using the inventory calculation, Total Inventory Cost = Direct Materials + Direct Labor + Manufacturing Overhead, I arrived at the below values:
Beginning of 2025 - $46,778
End of 2025 - $33,255
The result is a -50% tax rate, which seems very incorrect. Turbo Tax has presented that there is little risk for an audit and the messages say that everything is in order. Am I doing something wrong here? Is this normal?
