Question

In the self-employment section > Inventory... why doesn't the cost of my inventory get deducted from the 'federal tax due' number?

Forum|Forum|4 years ago
March 15, 2022
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TurboTax Live Self Employed

Your inventory is not a tax credit. It is a potential expense against your sales. When you sell an item in your inventory, that cost is counted against income.

Large businesses that purchase, produce, and sell merchandise to generate income usually keep inventory and use the accrual method of accounting. The inventory's value at year-end is subtracted from its value at the start of the year (plus purchases made during the year) to arrive at the cost of goods sold (COGS) for that year.