Instead of waiting for the letter, you might want to try scheduling an appointment at your local Taxpayer Assistance Center. I did this when my verification letter never showed up. You'll need to call 844-545-5640 to schedule the appointment, but once you're there, they can verify your identity in person. Bring multiple forms of ID (passport, driver's license, social security card) and copies of your tax returns for the current and previous year. This resolved my issue in one visit without having to wait for mail delivery.

I'm dealing with something similar right now - my verification letter was supposedly sent on February 20th and still haven't received it. Reading through everyone's experiences here, it sounds like calling is definitely the way to go at this point rather than continuing to wait. One thing I'm curious about - for those who successfully got through to the IRS by phone, were you able to complete the entire verification process over the phone, or did they still require you to wait for a replacement letter? I'm trying to decide between calling the verification line directly or going the in-person route at a Taxpayer Assistance Center like Sean mentioned. My business return is also on hold, so I really need to get this resolved ASAP. Also, has anyone had success with the online verification option that Isabella mentioned? I checked the link but wasn't sure if my specific letter type qualifies for online verification.

To add to this convo - don't forget that if you do form an LLC and keep it as a disregarded entity (basically taxed as a sole prop), you can still deduct the annual LLC fee that most states charge as a business expense on Schedule C! That's separate from your state income taxes. I pay $800/year to California for my LLC and that amount IS deductible as a business expense.

I think we're all overcomplicating this. Just use an accountant people! I tried doing my own taxes as a sole prop for 2 years and missed so many deductions. Paid $650 for an accountant last year and she found over $3k in deductions I missed. She also explained that some business structures have higher audit risk than others so it's not just about the deductions.

This thread has been incredibly helpful! I was in the exact same boat as Chris - finding conflicting information everywhere about home sale deductions. After reading through all these responses, I finally understand that the confusion comes from articles using "deductible" loosely when they really mean "reduces taxable gain through basis adjustment." It's frustrating that so many sources don't make this critical distinction clear. For anyone else struggling with this: the key takeaway is that if your home sale profit is under the exclusion amount ($250K single/$500K married), your selling costs won't provide any tax benefit at all. They would only matter if you exceeded those thresholds. The exclusion itself is already a huge tax break, so we can't double-dip by also deducting the selling expenses separately. Thanks to everyone who shared their experiences and clarified the actual tax mechanics. This is definitely one of those areas where the IRS could make their guidance much clearer for regular homeowners!

This has been such a valuable discussion! As someone who just went through a home sale last month, I can confirm everything that's been said here. I spent weeks trying to figure out where to put my $15,000 in realtor commissions and closing costs on my tax forms, only to discover they don't go anywhere as separate deductions. What really helped me was keeping detailed records of everything anyway. Even though my gain was well under the exclusion limit, having all the documentation organized made me feel more confident about my tax situation. Plus, if tax laws ever change or if I have a future sale that does exceed the exclusion, I'll have everything I need. One thing I wish someone had told me earlier: don't stress about "losing" those selling costs to taxes. The capital gains exclusion is already saving most homeowners thousands or tens of thousands in taxes. When I calculated what I would have owed without the exclusion, it made those realtor fees seem much less painful! For anyone still confused about this topic, I'd recommend talking to a tax professional if your situation is at all complex. The peace of mind is worth the consultation fee, especially when you're dealing with your biggest financial asset.

As someone who's been doing freelance digital art for about 3 years now, I can definitely relate to the tax confusion when starting out! You're asking all the right questions. One thing I wish I'd known earlier - keep track of your business expenses from day one, even small ones. I missed out on deducting things like PayPal fees, bank transfer fees, and even the cost of business cards or promotional materials in my first year because I didn't realize they counted. Also, since you mentioned you're keeping good records with spreadsheets, make sure you're also tracking your expenses in the same detail. I use separate columns for income source, expense category, and business percentage (like if I use my phone 30% for business vs personal). This makes Schedule C so much easier to fill out. For the quarterly payments, don't stress too much about the ones you've missed - the penalties are usually pretty small for first-time filers, especially if you're not making huge amounts yet. Just try to get current with the next payment and you'll be fine. The IRS also has a really helpful Publication 334 (Tax Guide for Small Business) that covers a lot of the self-employment basics if you want to read up on the details yourself.

One thing that really helped me when I started freelancing as a digital artist was setting up a separate business bank account, even though it's not required for sole proprietors. It makes tracking income and expenses so much cleaner, especially when tax time comes around. Since you mentioned you're making decent money ($4,200 in 6 months), you're definitely going to want to stay on top of those quarterly payments going forward. I'd suggest calculating what you think you'll make for the full year and then divide that by 4 for your remaining quarterly payments. Better to overpay slightly than get hit with penalties. Also, don't forget about state taxes if your state has income tax. Even though you mentioned your state doesn't charge sales tax on digital products, you'll still likely need to report your freelance income on your state return too. Each state handles this differently, so it's worth looking into your specific state's requirements for self-employment income. The good news is that once you get through your first year and understand the process, it becomes much more routine. You're already ahead of the game by keeping good records and asking these questions early!

I've been through this exact situation! My tax preparer was doing something similar - lumping everything together and not properly separating short-term vs long-term gains. What really helped me was getting a second opinion from another CPA before filing. The IRS is pretty clear that Form 8949 transactions need to be properly categorized by their holding period, even when summarizing. The fact that your brother-in-law put long-term transactions in the short-term section could definitely cost you money since long-term capital gains typically get better tax treatment. Since this is family and he's doing it for free, maybe approach it as "I want to make sure I understand how this works" rather than "you did this wrong." You could even mention that you heard summarizing was okay but that the long/short-term split still needs to be maintained. That way you're not directly criticizing his work but still getting the issue addressed. Bottom line though - don't sign a return you're not comfortable with, even if it's family. The IRS doesn't care who prepared it, you're the one responsible for what's on there.

I'm actually a tax preparer myself and want to chime in here. What your brother-in-law did with the summarization isn't necessarily wrong in principle, but the execution has some clear issues. The IRS does allow summary reporting on Form 8949, especially when you have numerous transactions. However, there are specific rules that must be followed: 1. Short-term and long-term transactions MUST be kept separate - this is non-negotiable 2. You need to use the correct checkboxes (A, B, or C for short-term; D, E, or F for long-term) 3. The summary totals should generally match what brokerages reported to the IRS The fact that everything is showing up as short-term when you had long-term holdings is definitely an error that needs to be corrected. This could cost you significant money since long-term gains often qualify for preferential tax rates (0%, 15%, or 20% depending on your income) versus short-term gains which are taxed as ordinary income. For the family dynamics, I'd suggest approaching it as wanting to learn more about the process rather than questioning his competence. You could say something like "I noticed all my transactions are showing as short-term - can you help me understand how that works since I thought some of my holdings were long-term?" This gives him a chance to either explain his reasoning or realize the mistake without feeling attacked. Remember, even though he's doing this for free, you're still responsible for what's on your return. It's better to address this now than potentially deal with IRS correspondence later.