Carl
Level 15

Deductions & credits

I see you're using the online version of TurboTax Deluxe. Since you were self-employed with your own business in 2016, you will have to upgrade to TurboTax Self-Employed with the online version. Basically, you'll be filing a SCH C with your personal tax return to show your business income, as well as your deductible business expenses. Since you're using the online version of the program, you *have* to use TurboTax Self-Employed. That's the only version online that has the full SCH C included.

Also, since your business obviously has inventory (the clothing you sell), here's some clarification that you will find helpful as you work the program through the SCH C section for your first time.

Beginning of Year (BOY) Inventory - For you, this will be a big, fat, ZERO. Since you started your business in 2016, the value of inventory your business had in it's possession on Jan 1 of the tax year was ZERO.

End of Year (EOY) inventory - The cost of (what *YOU* paid for it) the inventory in your physical possession on Dec 31 of the tax year.

Cost of Goods Sold (COGS) - What *you* paid for the inventory that you *actually * *sold* in the tax year. What tax year you paid for it, is irrelevant. Regardless of when you purchase your inventory, you can not deduct *your* cost for that inventory, until the tax year you actually sell it.