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If you are a sole proprietorship, you would enter your cost of goods sold and other business expenses on Federal Schedule C (Form 1040) Profit or Loss From Business. Self-employment income is reported on Schedule C, and the net profit or loss is reported on Line 11 of Schedule 1 (Form 1040) Additional Income and Adjustments to Income.

To enter the Cost of Goods Sold data in the TaxAct program:

  1. From within your TaxAct return (Online or Desktop), click Federal. On smaller devices, click in the upper left-hand corner, then click Federal.
  2. Click Business Income in the Federal Quick Q&A Topics menu to expand, then click Business income or loss from a sole proprietorship.
  3. Click + Add Schedule C to create a new copy of the form or click Edit to review a form already created.
  4. Continue with the interview process to enter all of the appropriate information.
  5. On the screen titled Great! Let's get started on expenses for this business, click Enter expenses.
  6. On the screen titled Business Income - Cost of Goods Sold (COGS), click Yes.

For additional information on inventories and accounting for them in your business, go to page 15 of IRS Publication 334 Tax Guide for Small Business.

Note that any link in the information above is updated each year automatically and will take you to the most recent version of the document at the time it is accessed.


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