Quick question about Schedule C and business startup - do I have to wait until I make my first sale to start deducting expenses? I'm spending money now on equipment and supplies but won't have any income for probably 2-3 months.

Great question! I went through this exact same confusion when I started my consulting business. The key thing to understand is that Schedule C business deductions and your personal standard deduction are completely independent of each other. Think of it this way: Schedule C calculates your business profit (income minus expenses), and that NET profit then becomes part of your personal income on Form 1040. Then separately, you decide whether to take the standard deduction or itemize your PERSONAL deductions (like mortgage interest, charitable donations, etc.). For your photography equipment - absolutely deductible on Schedule C if it's used for business! The $1,200 camera, editing software, props, backdrops, lighting equipment, memory cards, etc. are all legitimate business expenses. You can either expense smaller items immediately or depreciate larger equipment over several years. One thing to watch out for: make sure you can demonstrate this is a business and not just a hobby. The IRS has a "hobby loss rule" that can disallow deductions if they think you're not trying to make a profit. Keep good records, have a business plan, and try to show profit in at least 3 of 5 years. Also consider setting up a separate business bank account and credit card from day one - it makes tracking expenses so much easier come tax time!

I was in almost exactly your situation last year! 29 years old, hadn't filed since 2018, and felt completely overwhelmed. Here's what I wish someone had told me: First, don't panic about the 2019 deadline - while you might not be able to claim a refund for 2019 anymore (3-year rule), you should still file it if you owed taxes to avoid penalties piling up. For documents, start simple: create an IRS online account at irs.gov and request your wage transcripts. This will show you all the W-2 income that was reported to the IRS for each year, even if you don't have the physical forms. You can also request transcripts of any 1098-T education forms. The stimulus payments are HUGE - don't miss out on this! I got back over $3,000 in missed stimulus money when I finally filed my 2020 and 2021 returns. You claim them as the "Recovery Rebate Credit" on those tax returns. Since you were likely a dependent during college years, double-check if your parents claimed you. If so, you might not have been required to file for years when you made under ~$12,400, BUT you should still file if any taxes were withheld from your paychecks - that's money you can get back. For software, I personally used TaxAct for prior year returns (way cheaper than TurboTax for multiple years) and it walked me through everything including the stimulus credits. The whole process took me a weekend once I had my documents. You've got this! The hardest part is just starting.

I completely understand the overwhelm you're feeling - I was in almost the exact same situation two years ago! Here's my advice as someone who successfully navigated this mess: **Start with the IRS online account first** - create one at irs.gov and request wage and income transcripts for each year. This will show you exactly what income was reported to the IRS, even if you've lost your W-2s. The identity verification can be tricky online, but it's worth trying first before mailing forms. **Don't stress about the filing order** - you can file your returns in any order. I actually started with 2021 first because I knew I'd get the biggest refund (stimulus money + withholdings), which gave me motivation to continue. **You're likely owed significant money** - between missed stimulus payments (potentially $3,200 total) and any tax withholdings from your part-time jobs, you could be looking at a substantial refund rather than owing money. **For the Pell Grants** - these are generally not taxable income as long as you used them for qualified education expenses (tuition, required books/supplies). Room and board portions would be taxable, but many students don't realize this distinction. **Consider your dependency status carefully** - if your parents claimed you as a dependent during those college years, it affects your filing requirements and eligibility for certain credits. The hardest part really is just getting started. Once you request those transcripts and see what income was actually reported, the path forward becomes much clearer!

Does anyone know if you can split the expenses? Like could I put $3000 in the FSA and claim $3000 for the tax credit (with my $12000 total daycare cost)? Would that be better than maxing out the FSA first?

@Andre Moreau - I was in almost the exact same situation last year! With one child and $12k in daycare costs, here's what I learned: Since you have one child, the dependent care tax credit is limited to $3,000 in expenses. If you put the full $5,000 in your FSA, you've already exceeded that $3,000 limit, so you won't be able to claim any tax credit. Here's what might work better for you: Put $3,000 in the FSA and keep $3,000 available for the tax credit. Whether this is optimal depends on your income level. The FSA saves you money at your marginal tax rate plus FICA (about 29.65% if you're in the 22% bracket), while the dependent care credit ranges from 20-35% based on income. If you're at higher income levels, the FSA might give you better savings. If you're at lower income levels, the credit percentage could be higher than your tax savings from the FSA. Given that you mentioned your husband makes more than you and you've had IRS issues before, I'd definitely recommend running the numbers both ways or consulting with a tax professional to make sure you're maximizing your benefit without any complications!

Has anyone tried working with a tax attorney instead of dealing with the IRS directly? I'm in a similar situation owing about $45k and wondering if it's worth the expense.

I'm going through something similar right now - owe about $58k and was terrified they'd force me to liquidate everything. After working with the IRS directly, I can confirm what others have said about them being more reasonable than expected. They absolutely do NOT require you to drain your entire savings or sell essential assets like your car. The key is being completely honest about your financial situation. When I filled out Form 433-F, I documented every expense including my modest emergency fund (about 3 months of expenses) and they accepted it as reasonable. They even acknowledged that having some emergency savings actually makes you more likely to stick to the payment plan. My advice: don't panic and start liquidating assets before talking to them. With your $60k income, you'll likely qualify for a payment plan around $800-1000/month depending on your other expenses. The IRS wants to get paid, not destroy your ability to earn income or maintain basic living standards. Take a deep breath - this is manageable even though it feels overwhelming right now.

One strategy that worked for me in a similar situation was filing Form 8857 (Request for Innocent Spouse Relief) again, but with significantly more documentation. I was denied the first time like your friend, but on my second attempt I included much more detailed evidence of my ex's financial concealment and control. The key was getting very specific about which tax items on the return were attributable solely to my ex-spouse. I went line by line through our joint returns and documented with bank statements, emails, and other records showing which income items were completely unknown to me and which deductions were fraudulent. Has your friend considered this route? The appeal being exhausted doesn't necessarily mean she can't file again with new, more compelling evidence.

Your friend's situation is unfortunately very common, and I've seen several people in similar circumstances successfully resolve their tax debt despite having a non-cooperative ex-spouse. The key is understanding that the IRS treats joint filers as "jointly and severally liable" - meaning they can collect from either spouse regardless of who actually earned the income. For the OIC process, your friend can absolutely proceed without her ex's participation. The IRS will evaluate her current financial situation independently. Given her $110K income, she'll need to demonstrate that paying the full amount would create genuine economic hardship, especially considering her ongoing expenses for her college-age children. One important point about potential civil recovery: if her OIC is accepted and she pays a reduced amount, she could potentially sue her ex for his proportional share of what she paid (not the original debt). This would be handled in state court as a contribution claim, but she'd need to prove his share of the original tax liability. I'd strongly recommend she work with a tax professional who specializes in OIC cases involving divorced couples. They can help structure the offer to highlight the hardship created by her ex's deliberate asset concealment and non-cooperation.