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Level 1
posted Feb 23, 2020 7:07:20 PM

Inventory as an itemized deduction?

The person I just spoke to from TT told me that my inventory costs weren't showing up on my expenses list after I entered them because I'm under standard deduction instead of itemized.

 

... I have a hard time imagining that my business's inventory expenses have ANYthing to do with standard/itemized deductions. Someone please clarify one way or the other.

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1 Best answer
Intuit Alumni
Feb 23, 2020 7:28:20 PM

No, you are correct, your business inventory costs have nothing to do with the itemized or standard deduction.

 

Itemized deductions are generally mortgage interest, taxes, and charitable contributions, along with a few others.

 

Your inventory costs won't show up in your expenses because for tax purposes they are not "costs" until you sell them.  Inventory is considered an asset.  Other assets of your business are cash, equipment, furniture, etc.  

 

Whatever portion of your inventory that you sold will show up as Cost of Goods Sold.  The part that you have that has not been sold, will not.

 

 

1 Replies
Intuit Alumni
Feb 23, 2020 7:28:20 PM

No, you are correct, your business inventory costs have nothing to do with the itemized or standard deduction.

 

Itemized deductions are generally mortgage interest, taxes, and charitable contributions, along with a few others.

 

Your inventory costs won't show up in your expenses because for tax purposes they are not "costs" until you sell them.  Inventory is considered an asset.  Other assets of your business are cash, equipment, furniture, etc.  

 

Whatever portion of your inventory that you sold will show up as Cost of Goods Sold.  The part that you have that has not been sold, will not.