I ended up going to HR block and they said all the business they've worked with report inventory and calculate cost of goods sold. They said if I wanted to change that, I would need to go to a CPA because they would not feel comfortable doing it. I ended up reporting inventory, like I've done for the previous 2 years. But if the method of reporting inventory as an expense the year you buy it is an acceptable method, I would want to do that in the future. Its MUCH easier and in the end it all balances out. I would have more profit in the following years because I would already have the inventory. So I would have less expense in making the sale and then I would start paying more taxes.
