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gamautt
New Member

What are raw materials used in manufacturing as related to a quilting business and how are these different that supplies needed to run the business?

I purchase batting and thread to use in my quilts for others.  I also buy fabric to use in quilt backs and other quilts made for samples, adverstising, etc. I do not know whether to put these in my schedule c as supplies or list them under raw materials.

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Accepted Solutions
Coleen3
Intuit Alumni

What are raw materials used in manufacturing as related to a quilting business and how are these different that supplies needed to run the business?

Raw materials used to produce an item for sale would be part of inventory and be entered in Cost of Goods Sold. They are treated differently from a pen or a ream of paper which would be an expense.

Follow the instructions below to enter "Cost of Goods Sold":

1. Click on the Business tab and then click on the blue Continue button.

2. That will take you a screen that asks How do you want to work on your business income? Select I'll choose what I work on.

3. On the Let's gather your business info screen you'll see Business Income and Expenses. Click on either Update or Start, to the right. 

4. The next screen will be Here's the business info we have so far. If you have been here before you can just select Edit.

5. On the next screen Inventory/Cost of Goods Sold is the third one down. Select Update.


TurboTax Calculates Cost of Goods Sold as follows:

  • Beginning Inventory
  • + Purchases                            
  • = Inventory Available For Sale
  • - Ending Inventory                   

= Cost of Goods Sold

View solution in original post

3 Replies
Coleen3
Intuit Alumni

What are raw materials used in manufacturing as related to a quilting business and how are these different that supplies needed to run the business?

Raw materials used to produce an item for sale would be part of inventory and be entered in Cost of Goods Sold. They are treated differently from a pen or a ream of paper which would be an expense.

Follow the instructions below to enter "Cost of Goods Sold":

1. Click on the Business tab and then click on the blue Continue button.

2. That will take you a screen that asks How do you want to work on your business income? Select I'll choose what I work on.

3. On the Let's gather your business info screen you'll see Business Income and Expenses. Click on either Update or Start, to the right. 

4. The next screen will be Here's the business info we have so far. If you have been here before you can just select Edit.

5. On the next screen Inventory/Cost of Goods Sold is the third one down. Select Update.


TurboTax Calculates Cost of Goods Sold as follows:

  • Beginning Inventory
  • + Purchases                            
  • = Inventory Available For Sale
  • - Ending Inventory                   

= Cost of Goods Sold

gamautt
New Member

What are raw materials used in manufacturing as related to a quilting business and how are these different that supplies needed to run the business?

So if I don't keep an inventory on hand, but just buy what I need for each project would I just use purchases and sold goods?
Coleen3
Intuit Alumni

What are raw materials used in manufacturing as related to a quilting business and how are these different that supplies needed to run the business?

If this is your first year, start with zero inventory, add all the material costs and include them in purchases and then have an ending inventory of zero. You'll be compliant that way and you would have to do the same work if you had to include that amount in expenses.
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