First, thank you in advance and I will try to simplify my above question:
I’m working to find out if I need to do a form 3115 on my 2021 tax return (CD/download first time user).
When comparing Schedule C entries done by a CPA to prior years up to 2019 and the 2021 return that I completed with TT, I believe I messed up my 2021 return.
Bottom line:
Keeping in mind that on my Schedule C Part line F is “Cash” and would like to keep Part III the same as Cash.
Which entries in Part III, need to be checked and entered with an amount to identify an inventory as Cash?
Or which entries need to be checked or have an amount to keep it as Accrual?
Since I don't know if my entries indicated I submitted for an Accrual or Cash method in Part III, Please take a look at my entries on Schedule C in 2021 (my intention was to be Cash):
line F (accounting method), entered “Cash” (correct in my case).
Part III (the lines with the issue):
line 33, marked “Cost” (line was not used by CPA in 2019)
line 34: checked “NO” (line not used by CPA in 2019)
line 35, entered an amount of $22 for Beginning Inventory (line was not used by CPA in 2019)
line 38, entered $22 Materials & Supplies (which was correct in my case)
line 41, End of the Year Inventory, resulted in $22. (line was not used by CPA in 2019)
Line 42 Cost of goods sold $22 (all along the $22 figure was meant to be only for supplies/materials, not inventory)
Again, thank you in advanced for your time!
