Yes, your cost of the products you had on hand on December 31st will be your ending inventory. The purpose of inventory and/or cost of goods sold is
that the IRS does not allow items that have not yet been sold to reduce the
income received during the year from other products. Remember when dealing with inventory on your tax return, it is always your cost (not sales price) that is used.
Any products you purchased for resale (including the cost portion of the starter kit that represents products for resale) will be entered as your total cost of all products/purchases for resale for the year. The beginning inventory would be zero since you started the business in 2017.
The monthly cost of the website can be listed under advertising if you believe that's basically what your are paying for as far as the website is concerned. You will be the best person to determine the category of expense.
- Under Wages & Income select Self Employment Income and Expenses
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Edit next to the business
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Add expenses for this work or scroll to Less Common Expenses
- Scroll and select Inventory, continue to enter your information
Supplies that help you to create income, but are not part of your product for resale will be listed in one of the expense categories.
