Part III - Cost of Goods Sold
This section is for any business that sells goods
to customers, so skip Part III if you're in a service business—consultant, yoga teacher, software programmer, day
care center owner, etc.
- Start by reporting the value
of your inventory at the beginning of the year, which normally is the same
as what you reported for closing inventory on last year's Schedule C.
- Next, report how much you
spent to buy merchandise, but don't include the value of anything
withdrawn from sale or for your personal use.
- If you're in manufacturing
or construction, you also report wages paid to production workers, factory
supervisors and the like, as well as expenses for supplies and other
overhead.
- Add those costs to your
beginning inventory.
- From that total, subtract
the value of your closing inventory. The result is your cost of goods
sold.
To
enter cost of goods sold follow the instructions below:
- Log in to TurboTax.
- Left side of your screen, click
the "Business" tab.
- Click the
"Business Income & Expenses" sub-tab that appears below the
"Business" tab.
- Click the blue
"I'll choose what I work on" button on the right.
- Click the blue
"Update" button in the "Business Income & Expenses"
section at the top.
- Click
"Edit" next to the business you need to enter this information for.
- Scroll down to
the Inventory/Cost of Goods Sold section
- Click
"Update" next to Inventory and Cost of Goods Sold
