Just a heads up that getting this wrong can trigger an audit! My sister's salon got audited because she was inconsistent with how she categorized supplies vs. small equipment with de minimis. The auditor specifically looked at how she categorized product that was used in services vs. sold retail. Make sure you're consistent year to year with your approach! If you use de minimis for certain categories, keep using it that way. Sudden changes in how you categorize things can raise red flags.

Just a quick reality check - as a CPA who works with many salon owners, this question comes up constantly. Here's the simple version: 1) Supplies used up within a year in services (color, shampoo, etc.) = regular business expense on Schedule C 2) Equipment under $2500 that lasts multiple years (tools, iPads, etc.) = can use de minimis if you elect it 3) Retail products you sell = inventory (different rules entirely) For FreeTaxUSA, just group by category. "Hair color & chemical supplies - $X,XXX" is totally fine as one line. Hope that helps!

Just want to add something that helped me with my 1099 tax debt - the Taxpayer Advocate Service. They're an independent organization within the IRS that helps taxpayers resolve problems. I was in a similar situation with about $35k in tax debt from 1099 work, and they helped me navigate my options. The service is free, but you need to demonstrate that you're facing significant hardship. In my case, I was able to show that the minimum payments were preventing me from covering basic living expenses. They helped me get into a more reasonable payment plan and even got some penalties removed.

Don't overlook self-employment tax deductions! I was in a 1099 mess too, and the thing that helped most was properly tracking business expenses. Are you deducting: - Home office (if you have dedicated space) - Health insurance premiums - Cell phone/internet (business portion) - Mileage for business travel - Retirement contributions (SEP IRA or Solo 401k) - Business software subscriptions These can significantly reduce your taxable income. I started a SEP IRA and was able to contribute about 20% of my net earnings, which saved thousands in taxes each year.

I think the answer depends on the complexity of the question. For basic stuff like "Can I deduct my mortgage interest?" I don't need to research. But for anything with nuance or that seems unusual, absolutely research it. I've seen too many colleagues confidently give wrong answers because they didn't bother to check. Tax law is too complex and changes too often to rely solely on memory.

Any1 else think its crazy how many tax pros just make stuff up? Had a client come to me after another preparer told them they could deduct 100% of meals (wrong) and their entire cell phone bill as a business expense without documentation (also wrong). When I asked the client if the preparer researched this, they said "no he seemed very confident." Confidence ≠ correctness in taxes!!

Don't forget that amending in FreeTaxUSA will likely cost you some money. They charge like $15-20 for amendments even if you filed for free originally. And if you need to amend both federal and state returns, that's separate fees. Also be prepared for a LONG wait. IRS is still processing amended returns very slowly - like 20+ weeks in some cases.

Just one more thing to consider - if your mom's capital gains from the 1099-B push her into a different tax bracket, it might affect other parts of her return too like certain credits or deductions that phase out at higher income levels. Make sure to check the entire return carefully when amending.

I ran into this exact problem last year! That $103 is definitely interest/earnings that accumulated in your traditional IRA before you converted to Roth. Even if it was only in there briefly, money markets and other default holding options can generate small returns. What tripped me up with TurboTax was the Form 8606 part. You need to make sure you've indicated that you made a non-deductible contribution to your traditional IRA first, then the conversion. TurboTax sometimes misses this connection if you don't enter things in the right order. Did you also receive a 5498 showing your original contribution to the traditional IRA? That form would show the initial amount you put in before conversion.

Did you check if you had any existing pre-tax money in ANY traditional IRAs? This is the pro-rata rule trap that gets so many people with backdoor Roths. If you had any pre-tax IRA money anywhere (even old 401k rollovers), that would cause some of your conversion to be taxable.