Thanks for the replies.
I assumed I was going to use Cash Basis, being able to write the whole 500 shipping tubes off as an expense confuses me a bit.
1. Is this only because it is an expense and not the actual product?
So basically I bought enough packaging tape, paper and peanuts to last about 10 years. I can go ahead and expense the entire amount off this year?
2. I assume the product itself still needs to be calculated as inventory under Cost Of Goods sold?
Example I bought 5,000 of the product and sold 2,000 this year. I am only able to write of the 2,000 sold correct?
3. To Peter: I currently charge sales tax to only the people purchasing from my state. I then pay the sales tax collected to the state twice a year. This sales tax is currently included in my gross receipts, is there a certain spot on the federal to write this off on?