If you are a sole proprietorship, you would enter your cost of goods sold and other business expenses on Federal Schedule C. Self-employment income is reported on Schedule C, and the net profit or loss is reported on Line 12 of IRS Schedule 1 (Form 1040).
To enter the Cost of Goods Sold data in to the TaxAct program:
- From within your TaxAct return (Online or Desktop), click Federal. On smaller devices, click the menu icon in the upper left-hand corner, then select Federal
- Click Business Income in the Federal Quick Q&A Topics menu to expand the category and then click Business income or loss from a sole proprietorship
- Click +Add Federal Schedule C to create a new copy of the form or click Review to review a form already created
- Click Continue until you reach the screen titled Business Income - Income, and then click Yes (Note: If you instead come to the screen titled Business Income - Topics, click Jump to Topic next to Income)
- Click Continue or No until you reach the screen titled Business Income - Cost of Goods Sold, and then click Yes
- The program will proceed with the interview questions for you to enter or review the appropriate information
For additional information on inventories and accounting for them in your business, go to page 14 of IRS Publication 334 Tax Guide for Small Businesses.