I am a carpenter, what category would I put my building materials under? I also bought a new trailer. where would I put that?

[Fern · Accepted solution]

The trailer you purchased, if it has a useful life of more than one year, should be capitalized and then depreciated.  You would enter this item in the Business Asset section of Turbo Tax.

How you treat your building materials depends on what you do with them and how you bill your customers.  

• For example, if you purchase lumber, add your labor, add hardware, etc. and then sell a table to your customers, you will treat these materials as inventory .  With inventory, your raw materials are expensed when you sell the item.  In Turbo Tax, you would enter the items in the Inventory/Cost of Goods Sold section

• Or, if you purchase lumber and do not make any significant changes to it, and then use it as framing in a home, it would be considered supplies.  These expenses would be entered in Other Common Business Expenses.