I have a vending machine operation.Should I put the cost of my product such as chips, candy, etc in the SUPPLY section? TT says since not doing inventory thats the spot?

[jonathanscottcar]

Turbo tax says I am not required to use inventory method. It's a large number and I want to make sure I put it in the correct location.

[DianeW777]

Yes, you are correct.  

As a reminder, after the passing of the Tax Cuts and Jobs Act (TCJA), small business taxpayers are exempt from the requirement to account for inventories (COGS). 

A small business taxpayer is a taxpayer that:

1. has average annual gross receipts of $26 million or less (indexed for inflation) for the prior 3 tax years, and
2. is not a tax shelter.

The cost can be deducted as materials or supplies or you can continue to use the same method you have been using to better reflect your income and expenses for the business as the product or materials are used against the income that is actually received for them.

[jonathanscottcar]

Great.  So I should include the cost of my products (chips, drinks) on line 22 sch. C? 

[DianeW777]

Yes.  That's perfectly acceptable to enter your products for resale.