The IRS requires that you enter the cost of your purchases when you
calculate cost of goods sold. You can determine the amount of your purchases by
creating a purchases by item summary report.
To do this task
Go to the Reports menu, click Purchases, and then click Purchases by Item
Make sure the date range is for the tax period you want.
What if the date range is wrong?
The report is initially set to show all tax-related transactions from the
last tax year. You'll need to change the date range when
you want the report to show tax-related transactions for a different tax
Note the total at the bottom of the report. This is the amount to fill in
the Cost of Goods Sold section of your tax form.
Prepare for end of year income