Reporting of purchased wholesale inventory

[kbcouch]

I started my own legging/shirt business at the beginning of 2017, I purchase at wholesale and resell at a little bit higher wholesale price to others that have their own business.  My profits are almost next to nil...maybe $1 per item.  I do this more for something to do and to help out other women.  I started this with my own money and then turn everything back into more purchases.  I have an inventory purchase of just over $20,000 and have about $2,000 inventory left from the end of last year.  Can I do this as just an expense for about $18,000 rather than do a COGS?

[Coleen3]

Unfortunately, no. Your situation is the very definition of inventory.

Start with zero inventory and enter the dollar amount of purchases for the year less any taken for your own personal use. Enter the inventory you have left at the end of the year. The difference is the cost of goods sold and will be counted against your gross receipts to determine your profit.

Follow the instructions below to enter "Cost of Goods Sold":

1. Click on the Business tab and then click on the blue Continue button.

2. That will take you a screen that asks How do you want to work on your business income? Select I'll choose what I work on.

3. On the Let's gather your business info screen you'll see Business Income and Expenses. Click on either Update or Start, to the right. 

4. The next screen will be Here's the business info we have so far. If you have been here before you can just select Edit.

5. On the next screen Inventory/Cost of Goods Sold is the third one down. Select Update.

(See the attached screenshots below. Click to enlarge.)

[kbcouch]

Navigating is difficult! There is no easy way to get to the page you need, where is the Business Tab?

[kbcouch]

No where does it ask me about inventory!

[Coleen3]

Cost of goods sold is inventory.

[kbcouch]

The question is where do I do this?  I cannot find Business tab and where to account for this.

[Coleen3]

Check the screen shots in the original post. The screens may change from year to year or look differently. The first is where to start. The second is under "less common expenses" and is titled inventory.

[kbcouch]

It is not taking me to the screen to be able to click 'Inventory', I remember it when I first started, but did not click it.

[Coleen3]

It is an expense, under less common expenses.

[kbcouch]

I understand that, I cannot get to less common expenses!

[kbcouch]

When I click on Income and Expenses, it take me to all the income, self employment, refunds, social security etc.  When I click on Self Employment, it takes me to the work summary and then click on edit and it goes to all the other expenses, I cannot get to the page to choose less common expenses.

[Coleen3]

Go back to SE Income/edit. Agree that everything looks ok with the info. Screen will pop up: OK. Let's get the deductions unique to your .../continue
What kind of expenses did you have for...Common expenses. Scroll down.
Less common expenses at the bottom. Click arrow.

[kbcouch]

Found it, hidden even further!

[Coleen3]

YEA!