Same exact situation here! 570 code since late February with that dreaded 4/15/2025 processing date. I've called the IRS so many times I probably know their hold music by heart at this point 😭 What's really getting to me is seeing people who filed after me already getting their refunds while we're just stuck in limbo. I keep telling myself that no news is good news, but after 6+ weeks it's hard to stay positive. Really hoping we all see some 571 codes soon and can finally get this resolved!

I'm dealing with the exact same situation! Got hit with a 570 code in early March and it's been radio silence ever since. The 4/15/2025 date is just mocking me at this point 😤 I've called the IRS line probably 15 times and either get disconnected or told "your case is still being processed" with no actual timeline. What's really frustrating is not knowing if there's something wrong with my return or if it's just random bad luck. I keep checking my transcript hoping for that magical 571 code but nothing yet. At least knowing I'm not alone in this mess helps a little! Fingers crossed we all see movement soon because this waiting game is brutal.

Remember that being taxed on scholarship money doesn't mean you'll necessarily owe anything if your total income is low enough. If the $4,500 for housing is your only income for the year, you'll likely be under the standard deduction ($12,950 for 2025 for single filers), meaning you'd owe $0 in federal income tax. You still need to file if your unearned income is above $1,100, but you probably won't actually owe anything unless you have other income sources too.

This is such a common source of confusion for students! I went through the exact same thing my sophomore year. What really helped me was creating a simple spreadsheet tracking exactly what each scholarship dollar was used for. I'd recommend going back through your financial aid disbursement records and bank statements to document precisely what was paid directly to the school for tuition/fees versus what went to your student account for living expenses. Sometimes schools lump everything together on their billing statements, but you can usually request a more detailed breakdown from the bursar's office. Also, don't forget that required textbooks and course supplies count as qualified expenses! If you bought any required materials with your own money (even if the scholarship covered room and board), you can effectively "reassign" some of the scholarship money to those qualified expenses instead, which could reduce your taxable amount. The system definitely feels unfair, especially as a first-gen student figuring this out on your own. But understanding it now will help you plan better for future years - you might be able to request that more of your aid goes directly toward tuition and qualified expenses rather than room and board.

Speaking from experience, your second option is the only sensible choice. I tried the "pay taxes on full revenue" approach my first year in business and MASSIVELY overpaid. An accountant later told me I paid nearly $12,000 more in taxes than I needed to because I didn't properly account for cost of goods sold and business expenses. Even with your messy start, an accountant can work backwards to create reasonable documentation. They can help you establish fair market value for your childhood collection items, properly categorize your convention trades, and track the value added through professional mounting. The IRS actually expects businesses to have proper bookkeeping - paying taxes on full revenue might seem safer but could actually trigger questions about why you have no expenses.

As someone who went through a similar transition from hobby to business, I can't stress enough how important it is to get professional help NOW rather than later. Your situation with the childhood collection, convention trades, and professional mounting creates some unique tax complexities that really need proper documentation. One thing I learned the hard way is that the IRS has specific rules about how you convert personal property to business inventory. For your childhood collection, you'll need to establish a "stepped-up basis" at fair market value when you first started using those items for business purposes. This protects you from having to pay taxes on appreciation that occurred while you owned them personally. The convention trading is actually more common than you think in collectibles businesses, but it needs to be properly documented as barter transactions. Each trade is technically two separate transactions - you're "selling" what you give up and "purchasing" what you receive, both at fair market value. Given your rapid growth ($300 to $9,500 monthly!), you're likely looking at significant tax liability. An accountant specializing in small businesses can help you maximize legitimate deductions you might not even know about - things like the business use portion of your home, streaming equipment, convention travel expenses, etc. Don't wait until tax season. The cost of hiring an accountant now will almost certainly be less than the overpayment or potential penalties from getting it wrong.

I'm working on a similar problem for my small business. Looking at these numbers: If gross assets went from $9.8M to $13.5M (+$3.7M) but accumulated depreciation decreased by $2.55M, doesn't that suggest they got rid of old assets and bought way more new ones?

This is a great discussion! I've been wrestling with similar Schedule L calculations for my consulting practice. One thing I'd add is that when you see that dramatic decrease in accumulated depreciation ($8.75M to $6.2M), it's almost certainly indicating major asset disposals. For a more complete capex calculation, you might want to try working backwards: 1) Start with the $3.7M increase in gross PPE (new acquisitions minus disposals at cost) 2) Estimate the original cost of disposed assets by looking at the accumulated depreciation reduction 3) Add back the estimated disposal amount to get total new purchases In your case, if they disposed of assets with $2.55M in accumulated depreciation, those assets likely had a much higher original cost. Without more details from other forms, it's hard to pin down the exact capex amount, but it's definitely more than the $3.7M net increase in gross assets. Have you checked if there's a Form 4797 (Sales of Business Property) that might give you more clarity on the disposals?

The audit risk stuff is important but don't overlook making sure you handle the business closure properly! When I closed my little consulting business last year, I had to: 1. File final employment tax returns (if you had employees) 2. Issue final W2s/1099s 3. Cancel EIN 4. Close business tax accounts with state 5. Report sale/disposal of business assets 6. Maintain records for at least 7 years Did TurboTax walk you through all these steps?

I completely understand your anxiety about this situation! I went through something very similar with my small photography business that had losses for 3 years before I closed it. Here's what helped put my mind at ease: the IRS audit statistics show that Schedule C businesses with gross receipts under $100k have an audit rate of less than 1%. With your highest year being $47k, you're well below that threshold. The key thing about the hobby loss rule is that it's not just about the 3-out-of-5-year test - the IRS looks at nine factors including whether you operated in a businesslike manner, kept good records, and made changes to improve profitability. Since you mentioned you were legitimately trying to run a business and made the rational decision to close when it wasn't working, that actually supports your case. Keep all your documentation organized (receipts, bank statements, inventory records, any business correspondence) just in case, but honestly, your situation sounds very low-risk. The IRS is generally more concerned with larger operations or obvious red flags like claiming massive losses on minimal income.