Thank you so much for your reply, @AliciaP1 So, when Turbo Tax asks me which method of Accounting I use, I am assuming that they share that with the IRS, and I think you have to stick to that and not change it, and so I am still confused about whether to select Accrual vs Cash. I thought that Accrual might be more relevant because it doesn't matter when I purchased those materials, but I can expense them when the items sell that contain those materials. If I have the Cash Method of accounting, I expense only the materials that I bought in 2022; right? Also, TT starts the inventory at $0 on January 1st. It says it must be that way, but it truth, I have thousands of dollars in materials and inventory (unsold items). I don't think I am required to enter inventory; right? What would be the advantage of doing so? I am just concerned that if I stick with the Cash Method of Accounting, I won't be able to expense as much in the future since I plan to purchase less for my shop. Many thanks for your assistance.
