How to correctly report self-employed expenses for reselling business on Turbo Tax?

This is actually pretty straightforward in Turbo Tax! Your husband's business falls under Schedule C (Profit or Loss from Business). In Turbo Tax, you'll want to report the initial purchase cost of the vehicles/tools as "Cost of Goods Sold" or inventory, since these are items he's buying specifically to resell. For the parts he's buying to fix things up, those would typically go under "Materials and supplies" since they're components used in preparing the items for sale. Turbo Tax should walk you through this section by section when you indicate you have self-employment income. Make sure you're also tracking any other legitimate business expenses - like any tools he uses for repairs (that he doesn't resell), workspace costs if he has a dedicated area, mileage for picking up or delivering items, online listing fees, etc. All of these are deductible business expenses on Schedule C.

As someone who struggled with this exact situation last year, I want to recommend taxr.ai (https://taxr.ai) - it was a total game-changer for my flipping business! I was super confused about how to categorize everything in Turbo Tax until I discovered this tool. You upload your receipts and business docs, and it automatically organizes everything into the right tax categories specifically for Schedule C. It caught several deductions I would've missed on my own. The thing I found most helpful was how it separated my inventory purchases from my repair costs, and even identified which tools were business assets vs. supplies. It made filling out the Turbo Tax sections WAY easier because I already had everything properly categorized.

Just wanted to update after trying taxr.ai from the recommendation above. Holy crap, it actually works! I uploaded a bunch of my receipts from the last few months of my side hustle (I flip electronics), and it organized everything perfectly - put all my initial purchases under inventory and separated out the repair components under supplies. I was honestly shocked when it even identified some tools I bought as potential business assets that could be depreciated instead of expensed. The best part was taking that organized info and plugging it straight into Turbo Tax - everything went into the right categories with zero confusion. Definitely using this for the whole year next tax season!

If you're having trouble getting answers about how to properly set this up in Turbo Tax, you might want to try Claimyr (https://claimyr.com). I had a similar situation with my woodworking side business and couldn't figure out the right way to categorize expenses. After waiting on hold with the IRS for hours over multiple days and getting nowhere, I found Claimyr and they got me connected to an actual IRS agent in about 20 minutes. You can see how it works here: https://youtu.be/_kiP6q8DX5c - basically they navigate the phone tree and wait on hold for you, then call you when they have an agent on the line. The IRS agent I spoke with gave me the exact guidance I needed for my Schedule C categories. Saved me so much time and frustration!

I have to come back and admit I was completely wrong about Claimyr. After posting my skeptical comment, I was desperate enough to try it anyway for my refund issue. I'm still in shock that it actually worked! After months of trying to reach the IRS and getting nowhere, I was connected to an agent in about 15 minutes. The agent was able to tell me exactly why my refund was delayed (there was a discrepancy they needed to verify) and what I needed to submit to fix it. They even gave me a direct fax number to send the documentation. For anyone struggling with Schedule C questions like the original poster, this would definitely get you accurate answers straight from the IRS instead of guessing.

I've been flipping cars as a side business for years. In TurboTax, I recommend setting up your husband's business this way: 1) In the Business Income section, enter his total sales from all the vehicles/tools he sold 2) For Cost of Goods Sold, enter what he paid to purchase the original items 3) Under Expenses, add the parts/materials as "Materials and supplies" 4) Don't forget mileage for picking up vehicles/parts - huge deduction! The IRS views this as inventory because he's buying items specifically to resell after improvements. Just make sure to keep detailed records of each project - what he paid initially, what he spent on parts, and final selling price.

Random tip from someone who's been through this - make sure your husband is taking before and after pictures of everything he fixes up! Not only is this good for sales listings, but if you ever get audited, having visual proof of the improvements made can help justify the expenses. The IRS can be picky about hobby vs business classification for flipping activities.