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posted Jan 15, 2023 3:13:32 PM

I need some help, pleaseI started a business this year

I started a business in 2022 purchasing equipment I would need to get going totaling $100,000...all of my savings. I know need to sell most of what I bought, and in the meantime I am lost about I can write off in 2022, and not screw myself in 2023.

 

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2 Replies
Level 15
Jan 15, 2023 3:39:56 PM

Sounds like you bought inventory which you do not expense until you sell it.  

 

If you are new to being self employed, are not incorporated or in a partnership  and  are acting as your own bookkeeper and tax preparer you need to get educated ....  

If you have net self employment income of $400 or more you have to file a schedule C in your personal 1040 return for self employment business income. You may get a 1099-NEC for some of your income but you need to report all your income.  So you need to keep your own good records. Here is some reading material……

IRS information on Self Employment….
http://www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/Self-Employed-Individuals-Tax-Center 

Publication 334, Tax Guide for Small Business
http://www.irs.gov/pub/irs-pdf/p334.pdf 


Publication 535 Business Expenses
http://www.irs.gov/pub/irs-pdf/p535.pdf 

 

Home Office Expenses … Business Use of the Home

https://www.irs.gov/businesses/small-businesses-self-employed/home-office-deduction

https://www.irs.gov/pub/irs-pdf/p587.pdf

 

Publication 463 Travel, Gift, and Car Expenses

https://www.irs.gov/pub/irs-pdf/p463.pdf 

 

Publication 946 … Depreciation

https://www.irs.gov/pub/irs-pdf/p946.pdf

Level 8
Jan 24, 2023 8:01:45 AM

 It sounds like this was  equipment for resale which is part of a Cost of Goods Sold section on your profit and loss statement. You would have to keep track of all the equipment you bought for resale as well as all the equipment that you sold on a Quickbooks software program which will enable you to see a running balance of the equipment you have available at any given date.  Finally, depending on how you set up the business, whether it be a sole proprietorship, business, or partnership, the Cost of Goods sold section would appear on a Sch A Remember this formula Remember this formula; it is Beginning Inventory +Purchases -Ending Inventory= Cost of Goods Sold. For more information about this topic, see corresponding link

HERE https://www.bing.com/search?q=cost+of+goods+sold+and+inventory+explained&form=WSHBSH&qs=AS&cvid=884f7ed7b7854542b209b253a083e0d7&pq=&cc=US&setlang=en-US&nclid=D7D94E35E1C754898AD325C91F280400&ts=1674156688158&wsso=Moderate