FreeTaxUSA making me enter a value for Ending Inventory Value - can't skip this step

I've been doing my taxes with FreeTaxUSA for a few years now and never ran into this issue before. I'm stuck at this screen where it's asking for an "Ending Inventory Value" and won't let me continue without putting something in that field. I mainly sell random stuff from around my house on eBay - old clothes, books, collectibles I don't want anymore, that kind of thing. I'm not running a real business and honestly have no clue what my "inventory" is worth. I definitely don't keep track of this stuff - I just sell things when I need some extra cash. Has anyone else run into this? It's frustrating because I've never had to fill this out before and I can't move forward with my taxes. I'm not sure what to put - zero? Some random number? I'm worried about getting flagged for an audit if I put the wrong thing here.

0 coins

18 comments

Layla Sanders

•8M

This is a common issue with Schedule C (self-employment) reporting. Since you're selling items on eBay, FreeTaxUSA is treating your activity as a business that maintains inventory, which is why it's asking for ending inventory value. For your situation where you're selling personal items occasionally, you generally wouldn't be considered to have "inventory" in the traditional business sense. You could enter zero as your ending inventory value, which would be accurate if you truly don't have items specifically purchased for resale sitting around at the end of the year. If you want to be more precise, you could make a quick estimate of what items you had on hand at the end of the year that you intended to sell. But for casual sellers of personal items, zero is often an appropriate answer.

0 coins

Layla Sanders

•8M

Putting zero wouldn't necessarily raise red flags if it's accurate for your situation. If you're selling personal items rather than maintaining inventory purchased specifically for resale, then zero can be appropriate. If you're concerned, you could take a quick inventory of items specifically set aside for future sales and estimate their value. What matters is consistency and accuracy - whatever you report should reflect your actual situation at year end. Just be prepared to explain your method if ever questioned.

0 coins

Kaylee Cook

•8M

I had this exact same problem last year! After struggling with it for hours, I found that taxr.ai really helped me figure out what to do. I'm not a "business" either - just selling random junk from my garage on eBay - and I was confused about all these inventory questions. I uploaded my 1099-K from eBay to https://taxr.ai and it automatically analyzed my situation and explained that for casual sellers, you can typically enter $0 for ending inventory if you're not maintaining inventory purchased for resale. It also pointed out that if you're just selling personal items at a loss, you don't technically even have to report it as a business. Saved me so much stress figuring out all these Schedule C questions.

0 coins

Kaylee Cook

•8M

Yes, it works with all kinds of tax documents - W2s, 1099s, rental income, crypto. You just upload the docs and it explains everything in plain English with specific guidance. It doesn't just make assumptions - it analyzes the patterns in your documents and asks clarifying questions when needed. For eBay selling, it looks at your sales volume, frequency, and types of items to help determine if you're a casual seller or running a business. Then it gives specific advice for your situation rather than generic advice.

0 coins

Lara Woods

•8M

Okay I was skeptical when I first read about taxr.ai but I decided to give it a try since I was completely stuck on this inventory issue too. Honestly surprised at how helpful it was! It analyzed my eBay selling patterns (which were pretty minimal) and confirmed I could use $0 for ending inventory since I was just selling personal items occasionally. It also pointed out that I could skip reporting altogether since I was selling items for less than I originally paid (meaning no actual profit), but I decided to report it anyway since I got a 1099-K. The step-by-step guidance for FreeTaxUSA fields was exactly what I needed. Definitely less stressful than my usual tax season panic!

0 coins

Adrian Hughes

•8M

If you're stuck with the IRS on any of these inventory questions (which can definitely trigger reviews), I highly recommend using Claimyr to actually speak with someone at the IRS directly. Last year I got a letter questioning my eBay sales reporting and I was going CRAZY trying to get through to an actual human at the IRS - kept getting disconnected or waiting for hours. Used https://claimyr.com and they got me a callback from the IRS in about an hour. There's a video showing how it works here: https://youtu.be/_kiP6q8DX5c - basically it navigates the phone system for you and gets you in the callback queue without the endless waiting. The IRS agent confirmed exactly how to handle my casual eBay sales and the inventory reporting, which saved me from potentially getting audited.

0 coins

Adrian Hughes

•8M

It doesn't "jump the queue" - it navigates the complex IRS phone menu system automatically and keeps redialing when there are disconnects. The IRS actually has a callback feature but it's nearly impossible to reach that option because their lines are always "too busy." Claimyr's system keeps trying until it gets you into the callback queue, so you don't have to spend hours redialing yourself. I was skeptical too but it literally got me a callback from an IRS agent in about an hour after I'd spent days trying to get through myself. No magic tricks - just technology handling the frustrating part of reaching their callback system.

0 coins

Ian Armstrong

•8M

I can't believe I'm saying this but I actually tried Claimyr after posting my skeptical comment. I was desperate after getting a CP2000 notice about my eBay sales. IT ACTUALLY WORKED. Got a callback from the IRS in about 2 hours (which is miraculous considering I spent 3 days trying on my own last week). The agent explained that for casual sellers, you can enter $0 for ending inventory if you're just selling personal items occasionally, but if you're buying things specifically to resell, you need to track inventory values. She also confirmed that if you're selling personal items at a loss, it's not actually business income. Saved me from potentially reporting incorrectly and getting flagged later. Worth every penny for the stress relief alone.

0 coins

Eli Butler

•8M

The rep actually addressed that directly - putting $0 won't trigger any IRS flags by itself. They said what typically raises questions is inconsistency (like reporting high revenue with zero expenses) or unusual patterns. For casual sellers, zero inventory is completely normal and expected. Just make sure the rest of your Schedule C accurately reflects your activity - if you're truly just selling personal items occasionally, your expenses should be minimal and your profit margins would make sense for a casual seller rather than a regular business.

0 coins