Selling clothes - how do I enter those expenses for the cost of the clothes?

[DMarkM1]

Sounds like you have a clothing sales business.  You will enter that in the "Self-employment" topic under the "Income" tab.  You will be asked about your business and then have the opportunity to enter income and then expenses.  

At the bottom of the expenses list you will need to:

1. Click the "Less Common Expenses" tab to expand the list.  There you will find a category "Inventory."  
2. Select that item
3. Continue
4. "Start" the "Inventory" topic. 
5. You can enter your cost for the clothes

[courtneymay217]

Thanks, always confusing as they are our clothes we just resell and don't really make a profit on so it does make sense it would be "inventory" just not traditional inventory as you think of it. 

[PattiF]

You would enter the expense of the cost of the clothes as a negative offset of the amount listed on the 1099-K that you must have received for these sales.

To report the income and expenses of your sales you would include this as Other reportable income.

For reporting clothing sold and also including the offsetting cost, follow these steps:

1. From the left menu, go to Federal and select the first tab, Wages & Income.
2. Add more income by scrolling down to the last option, Less Common Income, and Show more.
3. Scroll down to the last option, Miscellaneous Income, 1099-A, 1099-C, and Start.
4. Choose the last option, Other reportable income, and Start and Yes.
5. Enter the applicable description and amount and Continue.
   • First, enter Form 1099-K as received. It is essential that the full amount be entered.
     • For a description, include Form 1099-K and Personal Property Sales.
   • Next, enter an adjustment to reflect the cost of these items as an offsetting, negative amount up to the amount of the income. 
     • For the cost description, include Cost of Personal Property 
     • In other words, if the goods cost you $100 and Form 1099-K was for $10 in sales, the maximum cost allowable would be $10

[courtneymay217]

Thank you!