@DianeW777 To clarify, 2024 was my first year of business operations (first year I purchased new products/inventory to sell and began selling). At year end I still had unsold products/inventory that I am selling in 2025 and beyond. With TCJA and cash method, sounds like I can ignore the COGS Part 3 in Schedule C completely and instead expense all 2024 product/inventory purchases (including unsold) under Expenses in Part 2 as “Supplies (not included in Part III)”? I don’t see “Materials” you mentioned under Expenses in Part 2. I see “Materials and supplies” but it is under COGS Part 3 which I think I can/should ignore? Would it make sense to put inventory purchases under “Other” Part 5 and specify that I’m using the small business exception? For example “Materials (Exception for small businesses, not included in Part 3)"?
Separately, can I deduct startup expenses from 2023 in 2024 (LLC was formed in 2023 but operations/sales did not begin until 2024)? Or are only 2024 expenses allowed to be included? In other words, do startup expenses have to be claimed the year they are paid for (2023 only)? I did NOT file a Schedule C for 2023.
Thank you!
