Can you explain more about the "cost of goods sold" method vs other options? I'm just starting an eBay business and trying to set things up correctly from the beginning.

Sure thing! With the cost of goods sold method, you're tracking your inventory as an asset until it sells. When you purchase an item for $50 to resell, that $50 isn't an immediate expense - it's just converted from cash to inventory. Only when you sell the item does that $50 become an expense through COGS. The other main option is cash basis accounting where you might immediately expense small purchases. But for a reselling business with significant inventory, COGS method gives you a much more accurate picture of your actual profit and prevents the issue the original poster was worried about with "double taxation.

I used it for about 6 months for my eBay store and honestly found it lacking for inventory management. It doesn't handle COGS very intuitively. I switched to GoDaddy Bookkeeping which works better with eBay specifically - it categorizes inventory purchases correctly and has better reports for quarterly tax planning.

Thanks for the tip! I'll check out GoDaddy Bookkeeping. I'm finding QuickBooks frustrating because it's not giving me a clear picture of my actual tax liability when I'm buying and selling inventory at different times. I need something that will help me calculate my quarterly payments more accurately.

Is there a way to check if you didn't pay for tax prep out of your refund? I filed with FreeTaxUSA and just paid the state filing fee with my credit card.

If you didn't pay for your tax prep out of your refund (meaning you paid upfront with a credit card or other payment method), then your refund is coming directly from the IRS to your bank account. In that case, the "Where's My Refund" tool on the IRS website is your best option. You could also create an account on the IRS website and view your tax transcript, which sometimes updates with refund information before the "Where's My Refund" tool does. The transcript can be a bit confusing to read, but there are guides online that explain what the different codes mean.

I've had the most luck calling right when they open at 7am Eastern time. The queue fills up FAST. Also try calling on a Tuesday or Wednesday - Mondays and Fridays are usually the worst.

Thanks for the tip! I'll try Wednesday at 7am Eastern (that's 4am for me on the west coast, ugh). The things we do to get our own money back...

I hadn't even considered the QBI deduction! So are you saying that with the pass-through option I might actually get a larger QBI deduction than with an S-Corp because the entire profit would be eligible? What income levels does the QBI start to phase out?

Exactly right. With pass-through, your entire profit is potentially eligible for QBI. With an S-Corp, only the distribution portion (not your salary) is eligible. The QBI deduction begins to phase out in 2025 at taxable income of $382,200 for single filers and $384,400 for married filing jointly. It fully phases out at $432,200 for single and $434,400 for married. These thresholds change each year with inflation. If your business is a "specified service trade or business" (like consulting, health, law, etc.), these limits are particularly important since you lose the deduction completely above the threshold.

Did you have to pay an accountant to help with all the S-Corp compliance or did you try to handle it yourself? I'm wondering what the total cost was including both direct expenses and your time.

Thanks for this tip! I just created an account and checked my transcript. Looks like the casino did submit my W-2G to the IRS about a week ago (which is frustrating since they never sent it to me). At least now I can see the exact amounts to report on my return. Gonna file tomorrow. Really appreciate everyone's help here - I've been stressing about this for weeks! So relieved to know I'm not facing penalties since I'm due a refund.

Happy to help! That's exactly why I mentioned checking the transcript - casinos are usually good about reporting to the IRS but sometimes slow about sending the actual forms to winners. Now you have all the official information you need to file accurately. The transcript method is super useful for all kinds of missing tax documents. I've used it for missing 1099s and W-2s in the past. Makes filing much easier when you can see exactly what's been reported under your SSN.

I'd recommend FreeTaxUSA over TurboTax for this situation. It's way cheaper and handles missing forms just as well. I used it for a similar casino winning situation last year.

Do loan interest and registration fees count as separate deductions with standard mileage too? Or are those already included in the standard rate?

Loan interest and registration fees are already included in the standard mileage rate, so you can't deduct those separately if you choose that method. That's one reason why actual expenses might be better for some drivers, especially in states with high vehicle registration fees. If you use your vehicle for both personal and business use, you'd need to calculate the business percentage of these expenses if you go with the actual expense method. For example, if you use your car 70% for delivery driving and 30% for personal use, you could only deduct 70% of your registration fees and loan interest.

What if you forget to turn on the app sometimes? Does the IRS accept reconstructed mileage logs? I'm terrible at remembering to track this stuff consistently.