Hi,
So I started reselling and bought a bunch of items like clothes, shoes, toys etc. to resell. I got a 1099K from ebay to show my income. Overall I am at a complete loss because of all the money I spent to buy items. I'm confused on how to show this on the Sch C. It says as a small business I'm not required to include inventory so do I put my purchases as an expense under supplies line 22?
For example, amount I paid for items in tax year 2023 is $23,000 but only made $9,000 on items sold in 2023.
Do I have to fill out the COGS section, if so how? If not, then do I Show income of $9,000 on line 1 and expense of $23,000 on line 22?
To report $9,000 Cost of Goods Sold in TurboTax Online, follow these steps:
Schedule C Part III Cost of Goods Sold will reflect $9,000. In TurboTax Online, view the entries at Tax Tools / Print Center / Print, save or preview this year's return / Include government and TurboTax worksheets.
@JamesG1 what about the $23k I spent buying items like toys and clothes to resell? I can't deduct that amount? When I do what you mention I have the $9k from the 1099-K showing on line 1 as income and then when I enter $9K as cost of purchases with zero inventory then it flows to line 3 on the schedule c and nets my gross income to zero. Can I maybe put $23k as cost of purchases instead since thats what I actually spent?
Was the cost of sales $9,000 or $23,000? The step-by-step demonstrated how to post cost of sales.
@JamesG1 When you say cost of sales, if you are referring to what I sold and what I made then yes $9K. But what I actually spent on all the items including the stuff that didn't sell was $23K. So thats what I am trying to figure out. If I could deduct what I spent on items that haven't sold but I bought in tax year 2023.
COGS means exactly that- Cost of Goods Sold,
whatever you have that is not sold is Inventory.
IRS has on it's website the recommended methog to report a 1099-K for your business.