I switched from TurboTax to TaxSlayer Business last year for my pet sitting LLC and it was much better for handling business expenses. TurboTax wanted to upgrade me to their expensive Self-Employed version, but TaxSlayer was cheaper and actually had more specific categories for pet-related businesses.

That's a great idea! Do you use any specific app or method to track this? And has this documentation approach ever been tested in an audit situation?

I use a simple note-taking app that timestamps entries, which provides some verification of when I made the decision. I take a quick photo of the receipt and item, then add notes about whether it's inventory or personal. I haven't been through a full audit, but I did have my return questioned once about some expensive electronics I was reselling. When I provided my contemporaneous notes showing purchase intent, along with the eventual sales records, they accepted my explanation without further questions. The timestamp proving I made the decision at purchase time (not retroactively) seemed to be what convinced them.

I thought specific identification was only for investments like stocks. Can you really use it for physical inventory like clothing?

Yes, specific identification is actually the most common method for resellers dealing with unique items! Since each piece of clothing or household item is different (brand, size, condition, etc.), you can track the specific cost of each individual item rather than using averages like FIFO or LIFO. This is especially helpful for resellers because you're not dealing with identical inventory units. Each thrift store find has its own purchase price, condition, and eventual sale price. The IRS specifically allows this method in Publication 538 for businesses with "non-identical" inventory items. Just make sure you keep good records linking each purchase to its eventual sale - photos, receipts, and detailed descriptions help establish the connection between cost and revenue for each specific item.

Just be careful with this approach. If your estimates are significantly off, you might have to file an amended return later when the correct information becomes available. The IRS might also delay processing your return if they see discrepancies.

You can usually figure out which payroll service your former employer used by looking at your old pay stubs - most payroll companies put their logo or name somewhere on the stub. If you don't have pay stubs, try checking your email for any automated messages about payroll updates or direct deposit notifications, as these often come from the payroll company's domain (like @adp.com or @paychex.com). Another trick is to look up your former employer's website and see if they mention their payroll partner anywhere, or you could even call their main number and just ask "What payroll service do you use?" without identifying yourself as a former employee.

You can try a few different approaches to figure out which payroll service your former employers used. First, check any old pay stubs you might have saved - the payroll company name is usually printed somewhere on them, often at the bottom or in small text. If you don't have pay stubs, try looking at your bank statements for the direct deposit entries - sometimes they'll show the originating company name which could be the payroll service rather than your employer. You could also try the most common ones first: ADP, Paychex, Workday, Gusto, and Paycom are the big players. Just go to each website and try the "forgot password" feature with your work email or personal email to see if an account exists. If you get a password reset email, you know they used that service.

1 Oh that's a good point I hadn't considered! Does that mean I should open a bank account with my brand name too? Or can I deposit checks made out to my brand into my personal account?

22 If you're operating as a sole proprietor with a DBA (which sounds like your situation), you'll need to check with your specific bank. Some banks will let you deposit checks made out to your DBA name into your personal account if you've provided them documentation showing you operate under that name. To be safe, many artists open a separate bank account for their business activities. Some banks offer business checking accounts for sole proprietors where you can register your DBA name on the account. This makes depositing checks made out to your brand name much easier and also helps keep your business finances separate from personal ones, which is helpful for tax purposes.

19 This is actually bad advice. While you might get away with it, using an unregistered business name could potentially violate local DBA registration requirements depending on where you live. Many states require you to register your DBA before doing business under that name.

You're right that it's important to check local requirements! I just looked into my state's DBA rules after seeing your comment, and it turns out I do need to register if I want to open a business bank account under my brand name. The registration was pretty simple though - just a form and small fee at the county clerk's office. It's probably worth doing it properly from the start to avoid any complications down the road.

Do tax prep services actually track your refund after you've filed? I used TaxAct and never got any updates from them about my refund status. Is this something you have to sign up for?

Most tax prep services do offer some form of refund tracking, but it varies by company. TurboTax and H&R Block definitely have robust tracking. For TaxAct, you should be able to log into your account and check the "E-file Status" section, which sometimes includes refund updates. You typically don't need to sign up separately - it's included when you file through them. But the quality and detail of tracking varies widely between different tax prep companies.

Did you need an appointment to talk to someone at the Taxpayer Advocate Service? Was there a long wait time? I'm getting desperate about my refund situation.

I called the Taxpayer Advocate Service directly and was able to get an appointment within about a week. They were much more accessible than the main IRS phone lines. You can find your local office on the IRS website under "Taxpayer Advocate Service" - they have offices in most major cities. When I went in, they could pull up my account immediately and see exactly what happened with my rejected direct deposit. Definitely worth trying if you're stuck!