Thanks for the screenshot, yes I think I do understand how it works. Starting inventory + purchases − ending inventory = cost of goods sold.
Ive done all of that. Like I said my inventory grew by $300,000 in 2021 so was BOY 2021 was $150,000 and EOY 2021 is $450,000, so its $300,000 more than it was before and the IRS is calculating that as a deduction of my COGS sold which lowers my deduction thus making my income higher and having to pay a lot more taxes. I just want to know if this is normal? It seems I a paying a lot more tax this year because my inventory is higher.
