20 Quick question guys - I'm using TurboTax Business for our partnership filing with no income. Does anyone know if I still have to pay the full price even though we have basically nothing to report?

Just went through this exact situation last month! We formed our LLC partnership in September but didn't start generating revenue until January. You absolutely need to file Form 1065 even with zero income - the IRS considers you "in business" once you've made that first business purchase (your printer). For online filing, I'd recommend checking out FreeTaxUSA Business - it's much cheaper than TurboTax but still handles e-filing perfectly. Since you only have minimal activity, you'll probably qualify for their basic tier. The form will show your printer as a business asset and any setup costs as startup expenses. Pro tip: Make sure to keep detailed records of that $350 printer purchase and any other business expenses, even small ones. You'll need the dates and amounts for your first filing, and it establishes good bookkeeping habits for when your craft business takes off! The March 15th deadline is coming up fast, so don't wait too long. If you're cutting it close, you can always file for an automatic extension using Form 7004.

Just to clarify a point that I think is causing confusion: there are actually TWO separate tax issues here. 1) Gift tax: This applies to the giver (you). As long as you stay under the annual exclusion ($17,000 in 2023), you don't need to file a gift tax return or pay any gift tax. So you're good on this front. 2) Capital gains tax: This applies to the recipient (your daughter) when she sells. Since gifted property carries over the original cost basis, she'll owe capital gains tax on the difference between YOUR original purchase price and HER selling price. The "no change in value while she held it" doesn't matter for tax purposes - what matters is the change from your original purchase to her sale.

Has anyone here actually gone through an IRS audit over gifted stocks? I'm worried because I did something similar last year but don't have great records of my original purchase from like 15 years ago. What happens if you can't prove the original cost basis?

I'm glad to see so many people helping out with this question! Just wanted to add that when I was in a similar situation, my credit union's customer service was actually really helpful too. If you're still feeling uncertain after reading all these great explanations, don't hesitate to call or visit your credit union and ask them to walk through the form with you. They deal with first-time account holders all the time and are usually very patient about explaining these questions. Most credit unions have a community-focused approach and genuinely want to help their members succeed financially. Sometimes it's nice to have that face-to-face reassurance, especially when you're taking this big step toward financial independence!

This is such a helpful thread! I'm actually a tax preparer and see this confusion all the time during tax season. Just wanted to reinforce what everyone has said - for 99% of people opening their first bank account, the answer to backup withholding is "No." The only time I've seen clients subject to backup withholding is when they've had serious ongoing issues with the IRS - like repeatedly providing wrong SSNs to banks or consistently failing to report investment income. The IRS doesn't just randomly put people on backup withholding. One thing I'll add that might be helpful: even if your account does earn interest (which is pretty minimal on most checking accounts these days), as long as it's under $10, the bank doesn't even have to send you a 1099-INT form. So for a new checking account holder, the backup withholding question is really just a formality. You're being smart by asking questions and taking your time with the application. That careful approach will serve you well as you navigate more financial decisions in the future!

Just wanted to add another angle to this discussion that might help people avoid this confusion in the future. When you start a new job, ask your HR representative to walk you through every single deduction that will appear on your paystub during your benefits orientation - even the tiny ones. I learned this the hard way after going through the same "mystery deduction" experience. Now when I help onboard new employees at my company, I specifically show them a sample paystub and explain how each deduction will eventually show up as part of the "Cafe 125" total on their W-2. It takes an extra 10 minutes during orientation, but it prevents so much confusion down the road. Also, if your company offers it, sign up for electronic access to your paystubs and W-2s through your payroll system. Having digital access makes it much easier to search for specific deductions and compare year-over-year data when tax time comes around. You can usually search by keywords like "medical" or "insurance" to quickly find relevant deductions instead of manually scanning through months of paper stubs. The tax code terminology is definitely confusing, but once you understand that "Section 125 Cafeteria Plan" is just the IRS's fancy way of saying "pre-tax benefit deductions," it all becomes much clearer!

This thread has been incredibly helpful for understanding Section 125 deductions! I'm dealing with the same confusion on my 2024 W-2 and was starting to worry my employer had made an error. One thing I'd add for anyone still puzzling through this: if you have access to your company's employee self-service portal, look for a section called "Benefits Summary" or "Annual Benefits Statement" - many companies generate these automatically but don't always tell employees they exist. Mine showed a complete breakdown of every pre-tax deduction for the year, including things I had completely forgotten about like a $3/month voluntary accident insurance that I must have agreed to during open enrollment. It's reassuring to see how many people have gone through this same experience. The terminology really is unnecessarily confusing - "cafeteria plan" makes it sound like you're buying lunch at work, not paying for health insurance! But knowing that it actually saved money on taxes makes the mystery deduction feel a lot less scary.

I just ignored a $8.50 use tax I owed last year and nothing happened lol. The state has bigger tax cheats to go after than someone who didn't pay a few bucks on an online purchase. But technically yes you're supposed to pay it.

For your specific situation with the $5.40, here's my practical advice: Yes, technically you're required to pay use tax, but realistically the enforcement risk for such a small amount is essentially zero. However, I'd recommend getting into good habits now. Most states let you report use tax on your annual income tax return - there's usually a line where you can enter the total amount of use tax owed for the year. You can either track individual purchases or use your state's estimation table based on income (much easier). Since you're just starting to deal with this, I'd suggest setting up a simple system: keep a running tally of untaxed online purchases throughout the year, then report the total when you file your state taxes. The deadline is typically the same as your income tax filing deadline. Don't stress too much about this particular $5.40 purchase, but use it as a learning experience for bigger purchases in the future. Better to understand the system now than be caught off guard with a larger amount later!