Does anyone know what software is best for tracking inventory this way? We've been using QuickBooks but it seems designed for the traditional COGS method. Now I'm wondering if we need something different if we switch to expensing inventory at purchase.

This is such helpful information! I've been struggling with the same decision for my small electronics repair shop. We stock replacement parts and I've always done the traditional COGS method, but it's been a real headache tracking everything. One thing I'm curious about - if we make this election to expense inventory when purchased, does it affect our ability to use Section 199A (the 20% small business deduction)? I know that deduction is based on qualified business income, and I'm wondering if changing how we account for inventory impacts that calculation at all. Also, has anyone dealt with sales tax implications? In my state, we pay sales tax on inventory purchases, and I want to make sure switching to this method doesn't create any issues with how we handle sales tax reporting or credits.

Another option is to contact your Congressional representative's office! A lot of people don't realize this, but they often have staff dedicated to helping constituents with federal agency issues, including IRS problems. My brother was waiting on a $6,200 refund for almost 6 months and got nowhere until he contacted our Congressman's office. They have special channels to inquire about these things and his refund was processed within 3 weeks after they got involved. Just go to house.gov and enter your zip code to find your rep, then call their office and ask to speak to the staff member who handles IRS cases. Worth a shot!

I've been dealing with a similar situation for the past 4 months - filed in March and still waiting on a $2,800 refund. After reading through all these suggestions, I'm definitely going to try the Taxpayer Advocate Service route first since I can document the financial hardship this delay has caused me. For anyone else in this boat, I also wanted to mention that you can request your tax transcript online at irs.gov to see if there are any specific codes or flags on your account. It's free and might give you some clues about what's causing the holdup before you spend time on hold or pay for a service. The transcript will show processing dates and any error codes that might explain the delay. Has anyone had success getting their transcript and figuring out the issue themselves? I'm going to pull mine today and see what it shows.

Anyone using a CPA to handle their ERTC claims? I'm nervous about doing this myself since there's so much money at stake. My restaurant could qualify for around $150k across all quarters, and I don't want to mess anything up.

I'm in a similar boat - filed my 941X for Q2 and Q3 2020 ERTC credits back in March and still haven't heard anything. The uncertainty is killing me because I need to plan my cash flow for the rest of the year. One thing I learned is that you can request a copy of your account transcript by calling the business tax line or mailing Form 4506-T. It won't tell you exactly when you'll get paid, but it will at least confirm that the IRS has received and processed your filing. Sometimes amended returns get lost in the system, so it's worth checking. Also, make sure you kept detailed records of everything - payroll records, documentation of business impact from COVID, etc. I've heard some people are getting additional requests for documentation months after filing, which obviously delays things even more.

I actually went through this exact situation with my eco-friendly t-shirt company. Ultimately, I chose to create a hybrid model - I have an LLC for the business operations, but I also created a separate nonprofit foundation that receives a portion of profits as donations. This gives me flexibility while still achieving the charitable mission. The LLC allows me to take a reasonable salary and cover all business expenses, while the nonprofit foundation handles the charitable giving. Just be prepared for some setup costs with the nonprofit side (~$800 for 501c3 filing) and ongoing compliance requirements.

This is such a common dilemma for social entrepreneurs! I went through something similar with my tutoring business where I donate a percentage to education nonprofits. One thing that hasn't been mentioned yet is the timing strategy for charitable deductions. Even if you're stuck with pass-through taxation on your LLC profits, you can potentially bunch your charitable donations in alternating years to exceed the standard deduction threshold and maximize your itemized deductions. For example, instead of donating $10K each year, you could donate $20K every other year and take the standard deduction in the off years. This can significantly reduce your overall tax burden over time. Also, consider documenting everything meticulously from day one - contemporaneous records of your charitable intent, board resolutions if you have multiple LLC members, and clear separation between business and personal expenses. This will be crucial whether you stick with the LLC structure or eventually transition to a nonprofit. Have you thought about what happens if your sticker business grows beyond what you initially expected? It might be worth planning for different revenue scenarios now rather than having to restructure later.

One thing that tripped me up in a similar situation - make sure your S election is actually valid! If the original election wasn't filed properly or if you've had disqualifying events, you might actually be taxed as a partnership instead of an S-corp, which would change everything about how the K-1s work. You can verify your S election status by calling the IRS Business & Specialty Tax Line at 800-829-4933. They can confirm if your S election is still valid. In my case, we thought we were an S-corp for 2 years before discovering our accountant never actually filed the Form 2553!

This is a really comprehensive thread with great advice! One additional consideration - since you mentioned the other members are unresponsive about tax matters, you should document all your attempts to communicate with them about their K-1s and tax obligations. Keep records of emails, certified mail receipts, or any other communication attempts. The reason this matters is that if the IRS ever questions the S-corp's compliance, you'll be able to demonstrate that you made good faith efforts to notify all members of their responsibilities. This documentation could protect you personally and protect the S-corp's election status. Also, for future years, you might want to consider adding language to your operating agreement requiring members to acknowledge receipt of their K-1s and confirm they understand their individual filing obligations. This could help prevent similar situations going forward and give you clearer grounds to address non-participating members. The loss carryforward aspect is also worth mentioning - if your partners don't report their share of this year's losses, they can't use those losses to offset future income. So they're not just missing out on current tax benefits, but potentially future ones too.