PSA: ALWAYS KEEP COPIES OF YOUR TAX DOCS FOR AT LEAST 3 YEARS!!!

You can also try calling the IRS Taxpayer Assistance Center at 1-877-777-4778 if you're having trouble with the online account verification. They can mail you the transcript or help you access your account over the phone. It might take a few weeks to get it by mail, but it's a reliable backup option when the online system isn't working for you.

11 Quick warning about the home office deduction - be careful with claiming this if you don't have a space that's EXCLUSIVELY used for business. The IRS is pretty strict about this. If you're just selling from your couch or bedroom that you also use for personal stuff, you probably can't claim it. Also, if you're making under $5k from this side hustle, consider if the home office deduction is worth it. Sometimes it can trigger more scrutiny than it's worth for a small business.

Great question! Yes, you can definitely claim business deductions for your reselling activities. Since you're making regular income ($300-400/month), the IRS would likely consider this a business rather than just casual selling of personal items. Key deductions you can claim include: - Home office space (must be used exclusively for business) - Business equipment (printer, phone, computer) - Shipping supplies and packaging materials - Mileage to/from post office or sourcing locations - Storage containers/organization supplies - Photography equipment for product photos - Portion of internet and phone bills used for business You'll report this on Schedule C with your tax return. Just make sure to keep detailed records of all expenses and sales throughout the year - don't wait until tax time! Also, separate your business activities from personal use as much as possible to support your deductions. Since you're making consistent income, it's definitely worth setting up proper bookkeeping now rather than trying to reconstruct everything later. The tax savings will likely make the extra organization worthwhile!

I went through this exact same nightmare with my S-Corp election last year! After months of getting nowhere with phone calls, here's what finally worked for me: 1. **Document everything** - Keep a log of every call you make with dates, times, and who you spoke with. This becomes crucial evidence later. 2. **File Form 911 with the Taxpayer Advocate Service** - This is their official request for assistance form. You can download it from irs.gov or call 877-777-4778. Given that you're past filing deadlines and have made multiple unsuccessful attempts, you definitely qualify. 3. **Try the "entity determination" route** - When calling the IRS, instead of asking about Form 2553 or CP261, ask to verify your "entity classification for tax purposes." This sometimes routes you to a different department that can actually see your election status. 4. **Consider filing a complaint** - If all else fails, you can file a complaint with the Treasury Inspector General for Tax Administration (TIGTA) at tigta.gov. They investigate IRS service issues and can sometimes get things moving when nothing else works. The key is persistence and trying multiple angles simultaneously. Don't rely on just phone calls - use the written requests to Cincinnati that others mentioned too. The paper trail will be important if you need to prove your good faith efforts later. Hang in there - I know how maddening this process is, but you will get through it!

I'm dealing with this exact same S-Corp election nightmare right now! Filed Form 2553 in February and have been stuck in the same endless loop of IRS phone transfers and non-responses for months. This thread has been absolutely invaluable - it's both maddening and comforting to see how widespread this CP261 issue is. Reading through everyone's experiences and solutions has given me the first real hope I've had in weeks. I'm definitely going to implement the multi-pronged strategy that multiple people have had success with: filing Form 911 with TAS, sending that certified letter to the Cincinnati office, and using the strategic calling approaches with "entity determination" language. The fact that people like Dmitry, Victoria, and others actually got resolution through these methods gives me confidence that persistence will pay off. One thing I wanted to add - my CPA mentioned that we should also consider requesting a transcript of our business account from the IRS, as sometimes S-Corp elections show up there even when representatives claim they can't find any record. You can request it through Form 4506-T or sometimes online through the Business Online Account system. Starting my documentation log today (wish I'd done this months ago!) and preparing my Form 911 application. Thanks to everyone who shared their stories and solutions - this community support makes navigating this bureaucratic maze so much more manageable!

This thread has been super helpful. One thing I realized after making this mistake last year - check your state's specific rules on USGO exemptions. Some states (like NY where I live) have specific forms just for claiming the govt obligation exemption that require detailed breakdowns by fund.

As someone who went through this exact confusion last year, I can confirm what others have said - keep Section 199A dividends and USGO calculations completely separate. I made the mistake of applying my Treasury money market fund's 98% USGO percentage to ALL dividends including the Section 199A amounts, which was wrong. Section 199A dividends (Box 5 on your 1099-DIV) are already classified for their specific tax treatment and shouldn't be adjusted with USGO percentages. The key insight that helped me: USGO is about WHERE the income came from (federal obligations vs other sources), while Section 199A is about WHAT TYPE of business income it represents (qualifying business income from REITs, etc.). They're answering different tax questions. For your SPTXX example with 75% government obligations, apply that percentage only to the amounts in Box 1a and 1b, not to any Section 199A amounts that might also be reported from that same fund.

My two cents - I think you're focusing on the wrong thing. S-Corp is the only real way to dramatically cut SE tax. I switched from sole proprietor to S-Corp once I hit about $75k profit and saved over $4k in SE taxes the first year. Basic math: You pay yourself a "reasonable salary" which is subject to FICA (basically SE tax), but any profit above that comes to you as distributions with NO SE tax. The trick is determining what's "reasonable" - too low and IRS might come calling. Yes, there's more paperwork and you'll pay some money for payroll processing, but at $2400 SE tax, you could likely cut that in half with an S-Corp. Talk to a CPA about this specifically - it's the #1 tax planning move for successful self-employed folks.

I'm in a similar boat with SE tax being a major pain point! Based on what I'm reading here, it sounds like the key insight is that retirement accounts (traditional IRAs, Roth IRAs, SEP IRAs) help with income tax but don't touch self-employment tax at all. The HSA option mentioned by Ava is really interesting - I had no idea those contributions actually reduce SE tax too. That could be a game-changer if you qualify for a high-deductible health plan. For your situation with $2,400 in SE tax, it sounds like you might be making around $15,000-16,000 in net self-employment income (since SE tax is roughly 15.3%). At that level, the S-Corp route might not make financial sense due to the setup and ongoing costs Emily mentioned. I'd focus on: 1) maximizing business deductions to reduce net profit (which directly reduces SE tax), 2) looking into HSA if you can get an HDHP, and 3) maybe having that conversation with the IRS through one of the services mentioned to get official guidance on your specific situation. The retirement accounts are still great for reducing your overall tax burden, but unfortunately won't help with that SE tax piece you're trying to solve.