What do I do with inventory supplies I bought BEFORE I started my business?

A lot of us start our craft business with a large craft stash on hand, I get it. If you have personal craft supplies to add to your business, you can add them to your business inventory in the year you actually start your business, even if you bought that inventory in prior years. The kicker is, you generally want to have the receipt on hand to "prove" the cost of that item.

Assuming you have those receipts, also keep in mind - you are adding this inventory as if it's a current year purchase, NOT to your "beginning inventory" number. Beginning inventory should always match to last year's Schedule C's ending inventory, remember? So if this is year 1 for your Schedule C, obviously last year's ending inventory was 0, and this year's beginning inventory should also be 0.