Yes, you can ignore the cost of goods on the Schedule C. Yes, you can use supplies or any miscellaneous category if you want a specific name for the expense as you indicated. It's what you are comfortable doing but you do not have to reference anything to ignore inventory in your new business.
The key to start-up expenses is that the cumulative expense occurred before the business was officially opened for operations. You can choose a date reflective of that for the combined total of the start-up expenses.
- Start up costs - if you had any expenses before you actually opened for business services such as legal fees, market study or organization fees
- The IRS allows you to deduct $5,000 in business startup costs and $5,000 in organizational costs, but only if your total startup costs are $50,000 or less
- Add them as Business Expenses. Continue past the expense categories (or choose Other Miscellaneous Expenses) to the page titled "Enter Business Expenses Not Yet Reported" and enter the description & amount
- If you have more than $5000 in start-up costs, the remainder is entered under Assets/Depreciation as a capital asset for amortization (TurboTax provides this category for you).
- Start Up Business Tax Tips
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