3 Just to add my two cents - if you use accounting software like QuickBooks Self-Employed, they have specific features for handling PayPal transactions correctly. It automatically imports your PayPal activity and separates the fees from your income, but still accounts for everything properly on your tax forms.

As someone who's been dealing with self-employment taxes for several years, I can confirm the advice about reporting gross income and deducting fees separately is absolutely correct. One additional tip I'd suggest - make sure to save your PayPal monthly statements as PDFs throughout the year. These statements clearly show the breakdown of gross payments vs. fees, which can be invaluable if you ever need to provide documentation to the IRS. Also, don't forget that other PayPal-related expenses might be deductible too, like currency conversion fees if you receive international payments, or chargeback fees if you unfortunately deal with those. The key is keeping everything well-documented and categorized consistently. Good luck with your first year of self-employment taxes - it gets easier once you establish a good system!

I saw some mention of the CSED on my Account transcript rather than the Return transcript. Make sure you're looking at the right document! The Account transcript shows all activity on your account including payments, penalties, and important dates. The Return transcript just shows the information from your tax return as filed.

Yes, you can definitely download your transcripts as PDFs! When you're logged into your IRS online account and viewing a transcript, look for a "Download" or "Print" button at the top of the page. The download option will save it as a PDF file to your computer. If you don't see a download button, you can also use your browser's print function and select "Save as PDF" as your printer destination. This works on most browsers and gives you a clean PDF copy for your records. I'd recommend downloading all your transcripts regularly, especially if you're tracking CSED dates or dealing with ongoing tax issues. Having your own copies can be really helpful if you need to reference specific transaction codes or dates later without having to log back into the IRS system every time.

For your specific situation with the Sprinter van, I'd lean toward Section 179 given the 100% business use and high mileage. Here's why: With 42K miles at the standard rate (67 cents), you'd get $28,140 this year. But with Section 179, you can deduct the full $37,950 vehicle cost PLUS your $16,800 in operating expenses = $54,750 total deduction in year one. The key advantage is the immediate tax benefit. Even though you're locked into actual expenses going forward, you're getting a much larger deduction upfront when it can provide immediate cash flow relief for your contracting business. Just make sure you're keeping meticulous records since the IRS scrutinizes heavy vehicle Section 179 deductions heavily. Document every business trip, keep all receipts, and consider having a formal written vehicle policy stating it's business-use only. One more consideration - if your taxable business income is less than the Section 179 amount, the excess carries forward to future years. So run the numbers to make sure you can actually use the full deduction this year.

Great discussion here! I'm also a contractor and went through this exact decision last year with my pickup truck. One thing I'd add to the analysis is to consider your expected business growth and future vehicle needs. If you're planning to expand and potentially need additional vehicles in the coming years, Section 179 might make even more sense since you'll want to maximize current deductions while your income is lower. The immediate cash flow benefit can help fund that growth. Also, don't forget about the additional first-year bonus depreciation that might be available on top of Section 179. For 2025, I believe it's 80% bonus depreciation, which could potentially allow you to deduct even more of the vehicle cost in year one if you hit the Section 179 limits. Given your high mileage (42K) and 100% business use, you're definitely in a good position to benefit from either method. But that immediate $54,750+ deduction from Section 179 plus actual expenses is pretty compelling for cash flow, especially in a business where you're constantly investing in tools and equipment. Just make sure your CPA runs the numbers based on your specific tax situation before you decide!

Reading through all these scenarios has been really helpful! I'm dealing with a combination of several situations mentioned here - some regular garage sale items (my own stuff sold at a loss), some inherited jewelry that might have appreciated, and occasional flipping of items I find at estate sales. What I've learned from this thread is that the IRS really does make distinctions between these different types of sales. My regular decluttering falls under the "personal property at a loss" category, the inherited items get stepped-up basis treatment, and my occasional flipping might need to be reported as capital gains. The key takeaway for me is documentation - keeping simple records of what category each sale falls into, original costs or estimated fair market values for inherited items, and not overthinking the cash deposit situation. It sounds like as long as you're not structuring deposits to avoid reporting and you have reasonable explanations for your income sources, depositing garage sale proceeds shouldn't trigger any red flags. Thanks to everyone who shared their experiences and research - this has definitely helped me understand how to properly handle my mixed situation when tax time comes around!

This entire discussion has been incredibly valuable! As someone who's been sitting on about $2,800 in garage sale cash for over a year (just scared to deposit it), reading through everyone's experiences has really put my mind at ease. What strikes me most is how the IRS actually has pretty clear guidelines for these situations - it's just that most of us don't know where to find them or how to interpret them. The distinction between personal property sales at a loss, inherited items with stepped-up basis, and actual business/flipping activities makes total sense once it's explained clearly. I'm definitely going to take the advice about keeping simple records and just depositing my money normally. The fear of triggering some kind of investigation was way worse than the actual risk, especially since everything I sold was legitimately my own household items at a loss. One thing I'd add for anyone still reading: don't let tax anxiety prevent you from decluttering and simplifying your life! The whole point of garage sales is getting rid of stuff you don't need, and the IRS isn't trying to penalize people for cleaning out their closets. As long as you're honest about the nature of your sales and keep basic records, you should be fine. Thanks to everyone who shared their stories and research - this community is amazing for helping each other navigate these confusing situations!

Has anyone considered the De Minimis Safe Harbor election? If your business has applicable financial statements and an accounting procedure in place on the first day of the tax year, you can expense items up to $5,000. Without AFS, it's $2,500 per item. So a $3k espresso machine would need to be capitalized unless you have AFS, but a $2k one could potentially be fully deducted in year 1 under the safe harbor.

I've been dealing with similar home office expense questions for my consulting LLC. One thing I'd suggest is considering the "exclusive use" test more carefully. Since you mentioned keeping it in your designated home office space that you're already claiming, that helps establish business purpose. However, I'd recommend documenting a clear business justification beyond just "I need coffee to work." For example, if you're doing long video editing sessions that require sustained focus, or if the machine helps you avoid interrupting work to go out for coffee during billable hours, that creates a stronger case. Also consider this: instead of one $3,000 machine, what about a $1,500 commercial-grade setup that still meets your needs? It's easier to justify as "ordinary" for a business, falls under common de minimis thresholds, and still provides the quality you're looking for. The IRS tends to scrutinize luxury items more heavily, regardless of the business justification. Keep detailed records of how it's used exclusively for business purposes, and maybe track your productivity improvements or time savings to strengthen your position if questioned.