How detailed does that log need to be? I use my laptop for both my regular job and my side hustle selling digital patterns. Should I be tracking hours or something?

That actually makes me feel better! Do you think it's worth trying to do my own taxes this year with software, or should I just stick with my tax person until my situation gets more stable? Right now I just have one job and some student loans.

With just one job and student loans, you have a perfect situation to try doing it yourself! It's actually the ideal time to learn because your taxes are relatively straightforward but you'll still learn about education credits and student loan interest deductions. I strongly recommend trying it yourself with a good tax software. You can always decide not to submit if you're uncertain and go back to your tax person. But honestly, you'll probably find it much easier than you expect, and you'll learn a ton about taxes that will benefit you for years.

Any specific channels you'd recommend? I've tried looking up tax videos before but couldn't tell which ones were actually giving good info vs just trying to sell something.

Thanks for this advice. I didn't realize there was a specific order I needed to follow. So how long does it typically take to get a sales tax permit once you apply? Can I still sell during that period or do I have to pause my store?

Most states will issue permits within 2-3 weeks, though some can take longer. You can absolutely continue selling during this period - you don't need to pause your store. You'll just need to account for any sales made before you start collecting properly. Keep good records of all sales by state during this transition period so you can accurately report them when it's time to file.

This is such a good point! I got audited because I had inventory sitting in an Amazon warehouse in California but wasn't collecting California sales tax. Cost me nearly $12k in back taxes and penalties.

Is getting an EIN difficult? I'm concerned about making things more complicated. Does it change how you file taxes?

Getting an EIN is actually super easy - it takes about 5 minutes online through the IRS website. You get the number immediately. It doesn't complicate your taxes at all. You'll still file the same Schedule C with your personal return. It just means you can use your EIN instead of your SSN on W-9 forms and invoices, which helps protect your identity when dealing with multiple clients. Many banks also prefer seeing an EIN when you're opening a business checking account.

I've been using it for about 3 years now. It's definitely worth it for me. The mileage tracker alone saves me hundreds in deductions I would've missed, and it automatically categorizes transactions from your bank account. The quarterly tax calculator and payment reminders are super helpful too.

Thanks for the info! The mileage tracker sounds especially useful since I do a lot of driving between client sites. Do you find the automatic categorization is actually accurate or do you spend a lot of time fixing its guesses?

Would an Offer in Compromise work if I've already set up a state payment plan? Also, does this affect your credit score the same way a payment plan would?

Yes, you can still pursue an Offer in Compromise with the IRS even if you already have a state payment plan in place. The IRS will take your state tax obligations into account when evaluating your offer. In fact, having a state payment plan might strengthen your case by demonstrating your limited ability to pay. Regarding credit scores, an accepted Offer in Compromise can actually be better for your credit in the long run than a payment plan. While the tax lien itself may impact your credit, resolving the debt through an OIC shows resolution. In contrast, a long-term payment plan means you'll have outstanding debt for a much longer period. Just be aware that the OIC process can take 6-12 months, and you'll need to be compliant with all filing and payment requirements during that time.

This is terrible advice. Credit card interest rates are way higher than IRS interest rates. The IRS rate is like 7-8% right now while credit cards are 18-29%. A 401k loan is slightly better but you lose all that potential investment growth.