This is such a helpful thread! I'm just starting out with reselling and had no idea about the sales tax being part of cost of goods sold. I've been tracking everything wrong. One thing I'm curious about - do you need to keep physical receipts for everything or are digital photos/screenshots enough? I buy a lot of stuff from garage sales and thrift stores where they don't always give proper receipts. Sometimes it's just a handwritten note or I pay cash and get nothing. How do you document those purchases for tax purposes? Also, when you're calculating business use of your car (driving to garage sales, post office, etc.), do you track actual expenses or just use the standard mileage rate? I'm trying to figure out which method would be better for my situation.

This is exactly the kind of detailed tax discussion that makes me wish I had found this community sooner! I've been doing reselling for about 8 months now and made so many mistakes in my record keeping. One thing that's been really confusing me - when you're buying items specifically to resell, how do you handle situations where the item turns out to be worth way more than you thought? Like I bought a vintage camera at an estate sale for $25, then discovered it was worth $800. Do I need to report the full $775 as income, or is there some way to account for the fact that I got lucky with the valuation rather than actually "earning" that much through my business skills? Also, has anyone dealt with cryptocurrency payments? I've had a few buyers want to pay in Bitcoin or other crypto. I know I need to report the income, but do I use the crypto value at the time of sale or when I convert it to cash? And are there any special record-keeping requirements for crypto transactions?

Just a heads up to the original poster - if you haven't been making consistent estimated tax payments before now, you might want to check if you'll face any underpayment penalties. Starting EFTPS now is great going forward, but it doesn't fix any past underpayment issues. The IRS has a "safe harbor" rule where you generally avoid penalties if you pay 100% of last year's tax liability (or 110% if your income was over $150,000) or 90% of this year's liability in timely estimated payments.

As someone who just went through this exact process last month, I can confirm that the enrollment timeline is crucial to plan for. I'd also add that when you do enroll, make sure to keep your EFTPS login credentials somewhere very secure - unlike other online accounts, you can't just reset your password easily if you forget it. One thing that helped me was setting up recurring reminders in my calendar for the quarterly due dates (January 15, April 15, June 15, and September 15) so I never miss a payment deadline again. The peace of mind from electronic payments is definitely worth the initial setup hassle! Also, Sofia, since you mentioned having multiple businesses, you might want to consider keeping separate records of which payments correspond to which business income for your own bookkeeping, even though it all goes through one EFTPS account. It makes tax prep much easier at year-end.

@Keisha Jackson, I completely understand that panic when you think you're done with taxes and then get blindsided by late documents! This exact scenario happened to me two years ago with a forgotten Roth IRA account that sent me combined Forms 1098, 1099, 5498 documents in May. Here's what you need to know: You're absolutely not in trouble, but you do need to file an amended return (Form 1040-X) for that $380 in dividend income. The IRS computers will eventually match up the 1099 information they receive from financial institutions with your filed return, so it's much better to be proactive. The math isn't as scary as it seems - you'll owe additional tax on that $380, not the full amount. Depending on your tax bracket, you're probably looking at somewhere between $57-91 in additional federal taxes (15-24% of $380 for most people). You might also owe a small amount of interest from the original filing deadline, but if you file the amendment within the next month or two, the interest will be minimal. A few practical tips from my experience: - Make copies of everything before mailing your amendment - Include a brief cover letter explaining you received the tax documents after filing - Double-check if that combined statement has any other tax info you might have missed (like IRA contributions that could actually help you) The whole process took me about 3 weeks to prepare and file, and the IRS processed it without any issues. You've got this - it's just an administrative correction, not a crisis!

@Keisha Jackson, I totally feel you on this! The exact same thing happened to me last year - filed in March, got my refund, then got a surprise combined statement in June from an old investment account I'd completely forgotten about. Here's the reality check that helped calm my nerves: receiving tax documents after filing is super common, and the IRS has processes in place for exactly this situation. You're definitely not "screwed" - you're just dealing with a paperwork correction. For your $380 in dividend income, yes, you'll need to file Form 1040-X (amended return), but the financial impact is way less scary than it initially feels. You'll owe taxes on that $380 at your marginal tax rate - so if you're in the 22% bracket, that's about $84 in additional federal tax, plus maybe $10-15 in interest if you file the amendment in the next month or two. One thing that really helped me was calling it what it is: you're not "fixing a mistake" - you're reporting income that you literally didn't know about when you filed. That's completely different from making an error, and the IRS treats it that way too. The amendment process itself is pretty straightforward once you get started. Just make sure to check if that combined statement has any other tax information beyond the dividends - mine had some IRA contribution info that actually reduced what I owed! You've got this - it's annoying paperwork, not a tax disaster.

I went through this exact same confusion two years ago! The IP PIN system is definitely not user-friendly, but here's what I learned that might help: Use your original 2022 IP PIN for your 2022 tax return. The year on the IP PIN document tells you which tax year it's for, not when you received it. Your newer 2023 PIN is for next year's filing season. What happened is when you used the retrieval tool recently, the system gave you the current available PIN (2023) because that's all it can provide access to. The IRS doesn't let you retrieve old PINs through their online system, which honestly seems like a major design flaw. A few things that helped me avoid this in the future: - Save your IP PIN with a very descriptive filename like "2022_IP_PIN_for_2022_taxes.pdf" - Keep both digital and physical copies (the IRS also mails a CP01A notice) - Set a calendar reminder each January to immediately organize the new PIN when it comes out The good news is you found your original 2022 PIN! Use that one and you'll be all set. Don't stress too much about it - this confusion is incredibly common and you're definitely not the first person to panic about which PIN to use.

This IP PIN confusion is so relatable! I went through something similar last year and completely understand the panic. You're absolutely right to use your original 2022 IP PIN for filing your 2022 tax return - that's exactly what it's designed for. The reason you got a 2023 PIN when trying to retrieve your "lost" 2022 PIN is because the IRS retrieval system only shows you the current year's available PIN. It's honestly a terrible user experience design that creates this exact confusion for thousands of taxpayers every year. One thing I wish I had known earlier: the IRS actually sends a physical CP01A notice in the mail with your IP PIN too, not just the online version. I always relied on the digital copy and nearly lost mine in a computer crash. Now I keep both the mailed notice and multiple digital copies saved with very clear filenames. The key thing to remember is that IP PINs are labeled with the tax year they're meant for, not the year you receive them. So your 2022 PIN is for 2022 taxes, your 2023 PIN is for 2023 taxes (which you'll file next year), and so on. It's counterintuitive but once you understand the pattern, it makes sense. You found your original PIN, so you're all set! Just don't mix them up when filing - the IRS systems will automatically flag mismatched PINs and can delay your refund for months.

I went through something very similar with a class action settlement from a defective smartphone case that damaged my phone back in 2022. Got $1,200 in late 2024 as reimbursement for the repair costs I paid out of pocket. The confusion around tax implications is totally understandable! In my case, I did receive a 1099-MISC in late January showing the full settlement amount. Following the advice of my tax preparer, I reported it on Schedule 1 as "Other Income" but then subtracted the same amount as a negative adjustment with the description "Class action settlement - recovery of repair costs." The key thing that helped me was keeping meticulous records of my original repair receipts and the settlement agreement language that specifically stated it was reimbursement for damages. Even though the 1099 made it look like taxable income, the documentation clearly showed it was just recovering money I had already spent. Don't stress too much about the W9 - like others mentioned, they collect everyone's info but the form itself doesn't determine taxability. The nature of what the settlement represents (reimbursement vs. punitive damages) is what matters for tax purposes. Since yours is clearly covering repair expenses you already paid, you should be in good shape!

I've been following this thread as someone who recently received a class action settlement as well, and wanted to add a few practical tips based on my experience with a medical device settlement last year. First, regarding the W9 timing - in my case, there was about a 6-week gap between submitting the W9 and receiving the 1099-MISC. The settlement administrator told me they batch process these forms, so don't worry if it seems like a long wait after submitting your paperwork. Second, when you do receive a 1099 (if you get one), take a photo or make a copy immediately. I learned this the hard way when my original got damaged and I had to request a duplicate, which delayed my tax filing by several weeks. Finally, for anyone using tax software to file, I found that TurboTax and H&R Block both have specific sections for handling settlement income that isn't actually taxable. Look for "Other Income" sections where you can add explanations - they've gotten better at guiding users through these situations since class action settlements have become more common. The consensus in this thread about keeping detailed records and not panicking about the 1099 is spot on. The settlement reimbursement itself isn't the issue - it's just making sure you report it correctly if you get the tax form!