As someone who's been running a tech review channel for about 3 years now, I can share what's worked for me based on discussions with my CPA. The key is establishing that your channel is a legitimate business (sounds like you're already there with the affiliate income). For products you purchase and review, you can generally deduct the full cost if the primary purpose was business - creating content. The fact that you get personal use afterward doesn't necessarily disqualify the deduction, but you need to be reasonable about it. If you bought something specifically to review and it generates income through your content, that supports the business purpose. However, be careful with expensive items that you'll use primarily for personal purposes after the review. A $200 pair of earbuds that you use daily for personal listening might need partial allocation, but a specialized camera lens that you bought for better video quality and rarely use personally could be fully deductible. Document everything: purchase date, business purpose, which video it appeared in, and any ongoing business use. I keep a simple spreadsheet with links to the videos where each product was featured. This has been invaluable during tax prep. One tip: consider whether you can legitimately claim ongoing business use. For example, if you keep tech products for comparison shots in future reviews or for building your "tech wall" background, that supports continued business purpose.

Great question! I've been running a tech review YouTube channel for about 2 years now and dealt with these exact same tax issues. Here's what I've learned from working with my accountant: You're absolutely right to keep detailed records - that's crucial. For products you buy specifically to review, you can generally deduct them as business expenses since content creation is the primary purpose. The key is demonstrating legitimate business intent. However, there's a nuance when you keep items for personal use afterward. The IRS looks at the "primary purpose" test - if you bought it mainly for business (creating content), you have a strong case for the deduction even if you get personal benefit later. But for expensive items you'll use heavily for personal purposes, you might need to allocate part of the cost to personal use. A few practical tips from my experience: - Keep photos/screenshots of products in your videos as proof they were used for business - Note any ongoing business use (comparison shots, background props, etc.) - Track if you eventually sell or donate items, as this supports the business purpose - Consider the item's useful life for your content vs personal use For those $200 earbuds, if you bought them specifically to create a review that generates revenue, and maybe use them occasionally in future videos for comparisons, you could likely justify a high percentage business deduction (80-90%) even with some personal use. The most important thing is having a reasonable, documented approach that you can explain if questioned.

I've been following this thread and wanted to add something that might help - definitely check with your state's Department of Revenue or tax authority directly about uniform deductions. I'm in Texas and was surprised to learn we actually have some provisions that differ from federal rules. Also, regarding the payroll deduction vs. upfront payment question - from a practical standpoint, the payroll deduction might actually be better for record-keeping. You'll have clear documentation on your pay stubs showing exactly what was deducted and when, which makes it easier to track if you do find any applicable deductions later or if tax laws change. One more thing - if your uniforms have your company logo or are highly specialized for your specific job, you might want to document that they're not suitable for everyday wear. Even though you can't deduct them federally right now, having that documentation could be valuable if the tax laws change back after 2025 when the current restrictions are set to expire.

Yes, the current restrictions on employee deductions are temporary! The Tax Cuts and Jobs Act suspended miscellaneous itemized deductions (including unreimbursed employee expenses like uniforms) from 2018 through 2025. Unless Congress extends these provisions, the rules should revert back to the pre-2018 system starting in 2026. Under the old rules, you could deduct unreimbursed employee expenses that exceeded 2% of your adjusted gross income as itemized deductions. So if tax laws return to that system, your uniform costs might become deductible again - which is another good reason to keep detailed records now. I'd definitely recommend the payroll deduction option for the documentation benefits others mentioned. Plus, spreading the cost over several paychecks is often easier on cash flow than paying $235 upfront. Just make sure you keep copies of those pay stubs showing the deductions! And definitely explore the employer reimbursement angle that others suggested. Even if they can't do a full reimbursement program right away, they might be willing to provide some kind of uniform allowance or stipend to help offset the cost.

This thread has been incredibly helpful! I'm dealing with my first non-dividend distribution situation and was completely lost until reading everyone's experiences here. One thing I wanted to add that might help others - if you're using a discount brokerage like Schwab or Fidelity, they often have tax centers on their websites with calculators specifically for tracking basis adjustments from non-dividend distributions. I found Schwab's "Cost Basis Tracking" tool really useful for understanding how my distributions would affect future capital gains calculations. Also, for anyone still struggling with where to find this information in their tax software, look for sections labeled "Return of Capital" or "Box 3 distributions" rather than just searching for "non-dividend distributions." Different tax programs use slightly different terminology, which was confusing me initially. Thanks especially to @Emily Nguyen-Smith for the clear explanation about cost basis reduction - that finally made it click for me! And @Sophia Rodriguez, I'm definitely going to check out that taxr.ai tool you mentioned since I have some other complex investment situations this year.

This discussion has been so enlightening! I'm actually an enrolled agent who helps clients with these exact issues, and I wanted to add a few professional insights that might help others navigating non-dividend distributions. One thing I see clients struggle with is understanding that non-dividend distributions can actually be beneficial from a tax planning perspective. While they reduce your cost basis, they essentially allow you to receive money from your investment without immediate tax consequences (until you sell or your basis hits zero). This can be particularly advantageous if you're in a higher tax bracket now but expect to be in a lower bracket when you eventually sell. For those tracking basis adjustments, I always recommend keeping copies of all broker statements that show the distributions, not just the tax forms. Sometimes the 1099-DIV doesn't provide enough detail, and broker statements often include helpful explanations of the distribution type and company rationale. Also, if anyone is dealing with foreign investments or ADRs (American Depositary Receipts), the rules can be different and more complex. These might require additional forms like 8938 or FBAR depending on the amounts involved. The tools and services mentioned in this thread like taxr.ai and claimyr sound helpful for getting proper guidance when you need it!

Has anyone addressed the issue of self-employment taxes in this scenario? If the kids are paid through the Family Management LLC as independent contractors, they'll owe self-employment tax (15.3%) on their earnings. If they're employees of the LLC, the LLC will need to handle payroll taxes. Either way, there's no avoiding FICA taxes completely in this arrangement, which is something to factor into your calculations.

This is a solid tax strategy if executed properly, but I'd strongly recommend getting everything documented before you start. The key is making sure the work arrangement has genuine business substance. A few practical tips from my experience with similar setups: 1. Have your kids punch in/out with a simple time tracking system - even a basic app works 2. Create written job descriptions that match what outside contractors would do 3. Pay them via direct deposit to their own bank accounts (not cash) 4. Keep the LLC and S-Corp completely separate - different bank accounts, proper invoicing between entities One thing to watch: if your kids are under 18 and this is structured as a sole proprietorship or partnership (with only you and your spouse), they may be exempt from FICA taxes. But since you're talking about an LLC structure, that exemption likely won't apply. The expenses you listed (car payments, school tuition, etc.) are perfectly fine uses of their earned income. Once they're legitimately paid for real work, it's their money to spend as they choose. Just make sure the compensation is reasonable for the work performed - research what you'd pay outsiders for similar services and use that as your benchmark.

I've been following this thread and wanted to share some additional resources that might help. If you're struggling to get through to the IRS directly, you can also try contacting the Taxpayer Advocate Service (TAS) - they're an independent organization within the IRS that helps taxpayers resolve problems. You can reach them at 1-877-777-4778 or through their website. For your Optima situation, many states have specific consumer protection laws regarding tax resolution services. Check with your state's consumer protection agency - some states require these companies to provide detailed refund policies or have mandatory cooling-off periods. Also, if you paid with a credit card, you might be able to dispute the charges, especially if you can document that services weren't provided as promised. Credit card companies are often more willing to help with disputes involving service companies that don't deliver. The most important thing is don't let this experience delay dealing with your actual tax issue. The IRS is actually quite reasonable to work with directly, and an installment agreement can often be set up online in minutes for a small setup fee - no need for expensive middleman companies.

I'm really sorry you're going through this - the combination of tax stress and realizing you may have been taken advantage of is incredibly overwhelming. You're definitely not alone, and the fact that you're taking action now shows good judgment, even if you feel like you made a mistake initially. Here's what I'd recommend based on similar situations I've seen: 1. **Get your IRS transcripts immediately** - Go to irs.gov and create an online account to view your actual tax debt. This will show you exactly what you owe versus what Optima claims you owe. Many people discover significant discrepancies here. 2. **Document everything** - Every payment, phone call, email, and promise they've made. Create a timeline of what they said they'd do versus what actually happened. 3. **Review your contract carefully** - Look for cancellation clauses and refund policies. Many states have specific laws about tax resolution services that may work in your favor. 4. **Cancel in writing** - Send a formal cancellation letter/email with read receipt. Be specific about wanting to terminate all services immediately. 5. **File complaints** - Report them to your state's attorney general, the FTC, and the Better Business Bureau. Even if you don't get money back, it helps build a case for others. The good news is you've already contacted an EA/CPA, which is exactly the right move. They can typically resolve in weeks what companies like Optima drag out for months. You're going to get through this!