I just checked my tax return copy and all my banking info looks correct. I've been using the same account for direct deposits from the IRS for the past 3 tax seasons without issues. The status on the Where's My Refund tool specifically says "refund approved" with the May 3 date, not that there are any problems with the deposit info. Is it possible they're just extra backed up this year? It seems weird that they'd approve it but then wait so long to actually send the money.

Yes, they are definitely more backed up this year than usual. I've been preparing taxes for family members for years, and I've noticed much longer processing times this season. The IRS has been dealing with staffing shortages and outdated computer systems. When they approve a refund but schedule it for weeks later, it's often because they're spreading out the payment processing to manage their workflow. Think of it as them putting you in a payment queue based on various factors including filing date, complexity, and even the amount of the refund.

I tried contacting the Taxpayer Advocate Service last month for a similar issue. Unfortunately, they're also extremely backed up and told me they're only taking the most severe hardship cases right now. They said unless I was facing immediate eviction or had medical treatments I couldn't receive without the money, they couldn't help with "routine" refund delays.

Thanks for this! Question - do you know if I need to keep all the receipts from the post office for shipping costs or can I just use the eBay records that show what I spent on shipping?

You can absolutely use the eBay records that show shipping costs! eBay keeps excellent records of all shipping labels purchased through their platform, and those records are sufficient documentation for the IRS. Just download your yearly selling record which includes all those shipping costs. For any shipping supplies or postage you purchased outside of eBay (like buying boxes or stamps separately), you should try to keep those receipts, but even a credit card statement showing purchases at office supply stores can serve as backup documentation.

I switched from TurboTax to FreeTaxUSA last year for my eBay business. TurboTax wanted to charge me $120+ for the self-employment version, while FreeTaxUSA was way cheaper and handled Schedule C just fine.

Thanks for the suggestion about adjusting my withholding going forward. Do you know how I would calculate how much extra to withhold to make up for this year's shortfall? And you're right about the state taxes - I need to check those too. I was so shocked by the federal issue that I didn't even think about that.

You can use the IRS Tax Withholding Estimator on their website - it lets you input how much has been withheld so far and will calculate what you need for the remaining paychecks. Just select that you want a bigger refund and it'll tell you what number to put on your W-4. For your state taxes, each state has different rules, but if they weren't withholding federal, there's a good chance they missed state too, especially if you're in a state that bases its withholding on the federal W-4 form.

This is a really good point! OP needs to check their employment status. My neighbor thought she was a regular employee but her company had her classified as a 1099 contractor (incorrectly) and wasn't withholding anything. Led to a huge tax bill and she had to file an SS-8 form with the IRS to get it sorted out.

Thanks for mentioning quarterly payments - I hadn't considered that! How do you determine how much to pay each quarter if your royalty income fluctuates a lot? My streaming numbers can vary wildly month to month.

Calculating quarterly payments with fluctuating royalty income can be tricky. The safest approach is using the "safe harbor" provision - if you pay at least 100% of last year's tax liability (or 110% if your AGI was over $150,000), you won't face penalties even if you end up owing more. For highly variable income, another option is the "annualized income" method where you calculate each quarterly payment based on your actual income for that period. It's more work but more accurate if your income varies significantly throughout the year. I use a spreadsheet to track monthly income and project my quarterly obligations.

An LLC doesn't change the tax timing - it's still reported on your personal return unless you elect S-Corp status. With an S-Corp, you can pay yourself a reasonable salary and take distributions, but royalty income specifically has some complicated rules. I found that out the hard way. You should really talk to an accountant who specializes in entertainment income because the self-employment tax savings could be substantial depending on your income level, but there are costs to maintaining the corporate structure too.

Thanks for mentioning this! I hadn't even thought about retirement accounts. Is one better than the other between SEP IRA and Solo 401(k)? And can I still contribute for 2024 or is it too late?

Solo 401(k) generally allows higher contributions when your income is lower because it has both an "employer" and "employee" contribution component. SEP IRAs are simpler to set up but only allow the "employer" contribution. For 2024 contributions, you can still open and fund both types until your tax filing deadline (including extensions). So if you file for an extension, you could potentially contribute all the way until October 15, 2025 for the 2024 tax year. That gives you plenty of time to figure out exactly how much you can afford to contribute once you know your full 2024 income.

I've used both methods. For my small apartment office (about 100 sq ft), the simplified method gave me $500 deduction ($5 × 100). When I calculated actual expenses (rent percentage, utilities, etc.), it came to nearly $2,200! Definitely worth tracking real expenses if your rent/mortgage is high.