2 This might be a dumb question but do I need to make quarterly estimated payments on self-employment tax too or just on income tax?

Just to add another perspective - I've been self-employed for about 5 years now and this confusion about SE tax vs income tax trips up almost everyone in their first year. One thing that really helped me was setting up a separate savings account specifically for taxes and automatically transferring about 30% of every payment I receive. This covers both the self-employment tax (around 14% after the deduction for the employer portion) plus income tax. It's better to overestimate and get a refund than to be short come tax time. Also, don't forget that you can deduct half of your self-employment tax when calculating your income tax - it's like getting back the "employer portion" since you're paying both sides as a self-employed person. The tax software handles this automatically but it's good to understand why your taxable income gets reduced.

FYI: Make sure you understand the new 1099-K thresholds. They were supposed to drop to $600 but the IRS pushed it back. For 2023 (filing in 2024), the threshold is $20,000 AND 200 transactions. For 2024 (filing in 2025), it's $5,000. So if you sold $5300 worth of gear in 2023, you might not even get a 1099-K unless you also had 200+ separate transactions! Worth checking the current rules before worrying too much.

As someone who's been through this exact situation, I can confirm what others have said - the 1099-K is just a reporting document, not a tax bill. I sold around $4,200 worth of music gear last year and was initially panicked about the tax implications. The reality is that most musicians selling personal gear are doing so at a loss. I kept a simple spreadsheet tracking what I originally paid versus what I sold each item for. Out of 15 items sold, only 2 vintage pedals actually sold for more than I paid originally - those were the only ones that generated taxable income. My advice: Start documenting everything now. Even if you don't have original receipts, gather what you can - credit card statements, emails, or research what those items typically cost when you bought them. The IRS understands that people don't keep receipts for personal items forever, but you need to make a reasonable effort to establish your cost basis. Also, don't forget that any improvements or modifications you made to the gear can be added to your original cost basis, which further reduces potential taxable gains.

This has been such a comprehensive discussion! I'm amazed by the depth of expertise everyone has shared. One additional angle I'd like to mention: consider the insurance implications of your garage conversion. You'll likely need to update your homeowner's policy to reflect the increased property value from construction, and you may need additional business property coverage for your inventory and equipment. The good news is that business insurance premiums are generally deductible, so factor that into your ongoing cost calculations. Also, having proper business insurance coverage can actually strengthen your position with the IRS if they ever question whether your garage use is truly for business purposes - it demonstrates you're treating it as a legitimate commercial operation. Given all the excellent advice about cost segregation, documentation, and timing considerations, I'd strongly recommend creating a project timeline that coordinates your construction phases with your tax planning strategy. For example, you might want to complete and place certain components in service before year-end to start depreciation, while timing other elements for the following tax year based on your income projections. The community knowledge shared here has been invaluable - it's clear that success with this type of project requires careful coordination between construction planning, tax strategy, business operations, and regulatory compliance. Thanks to everyone for such thoughtful contributions!

This thread has been incredibly valuable! As someone who's been lurking in this community for a while but finally dealing with a similar situation, I wanted to share one additional consideration that might help with your decision-making process. Since you're planning both an office relocation AND launching a new importing business, consider whether the timing of these two changes creates any strategic advantages. If you move your existing sole proprietorship office to the garage first (say, in December), you can establish the business use pattern and start depreciating that portion immediately. Then when you launch the importing business a few months later, you're expanding existing business use rather than creating new business use. This approach could provide several benefits: 1) Earlier depreciation start date for the office portion, 2) Stronger documentation of legitimate business use if questioned, and 3) More flexibility to adjust your business use percentage as the importing business actually scales up rather than having to estimate storage needs upfront. Also, given all the excellent advice about cost segregation and documentation, I'd suggest taking time-stamped photos throughout construction that clearly show which components serve specific business functions. This visual documentation could be invaluable for supporting your accelerated depreciation claims on items like specialized electrical, security systems, and storage solutions. The complexity everyone's highlighted really reinforces the importance of professional guidance, but having this community knowledge helps ensure you're asking the right questions when you meet with your CPA!

I actually did pass using primarily IRS publications, though I'll admit it wasn't easy! The key was creating a structured approach rather than just reading them cover to cover. What worked for me was printing out the content outlines Connor mentioned, then mapping specific sections of each publication to the exam topics. I'd read a section, then immediately try to explain it in my own words or create examples. This helped combat the dense language issue. I also joined a few Facebook groups for EA candidates where people would post questions about confusing sections - that community discussion really helped clarify difficult concepts. The IRS pubs definitely aren't written as study guides, but they contain all the information you need if you're willing to put in the extra work to organize it properly. That said, if budget allows, the commercial programs are definitely more efficient. But for those who want to go the free route like the OP, it's absolutely doable with the right strategy and a lot of patience!

As someone who just passed all three parts of the SEE using primarily IRS publications, I can definitely confirm it's possible! Here's the system I developed that made it manageable: I created a three-column spreadsheet for each exam part: Column 1 listed the exam topics from the Prometric content outline, Column 2 identified which IRS publications covered each topic, and Column 3 tracked my study progress with specific page ranges or sections. For the dense language issue, I found that reading each section twice helped - first for general understanding, then again while taking detailed notes in plain English. I also created my own "cheat sheets" summarizing key rules, exceptions, and thresholds for easy review. One tip that really helped: I set up practice scenarios for myself. After reading about a tax concept, I'd create fake taxpayer situations and work through them step by step. This made the abstract rules much more concrete. The IRS's own Interactive Tax Assistant tool was also surprisingly helpful for checking my understanding of complex scenarios - it's free and walks you through decision trees for many tax situations covered on the exam. Total study time was about 6 months (10-15 hours per week), but I felt very well prepared by exam day. The key is being systematic about it rather than just randomly reading publications!

I'm a former banking operations specialist, and there may be some additional factors at play here. Chase, like most large banks, typically processes ACH transfers in batches, usually around 2-3 times per day. If the IRS transmission occurred after the final batch on 3/19, it would likely be processed the following business day. Additionally, there could possibly be a security hold if this is a new account, if the amount is significantly larger than previous deposits, or if there have been recent account changes. These holds are generally 2-3 business days but can extend to 5 business days in some circumstances.

I'm dealing with this exact same situation right now! My DDD was 3/19 with Chase and I'm still waiting too. After reading all these responses, I called Chase this morning using the advice from @Lucy Taylor about calling the direct deposit department specifically. The rep told me they can see a "processing deposit" from the Treasury that should post within 24-48 hours. She said it's been in their system since 3/20 but got flagged for their standard tax refund verification process. Apparently this is happening to a lot of Chase customers with DDDs from 3/19. Really frustrating that they don't show these as pending in online banking! I'll update once it hits my account.