Just a heads up on those cutting machines - I made the mistake of putting similar equipment ($250 range) under Section 179 last year, and my tax preparer said it created unnecessary complication. She had to go back and reclassify them as simple expenses under the de minimis rule, which apparently is much cleaner for audit purposes. For the utilities question, I use a Kill-A-Watt meter to track exactly how much electricity my craft equipment uses. I can literally show the difference in usage between when my machines are running vs not. My accountant said this is perfect documentation to justify claiming more than just the square footage percentage for electricity.

Great questions about Schedule C categorization! As someone who's been through this confusion before, here's my take based on experience and professional guidance: Your vinyl sheets are definitely COGS Materials and Supplies since they directly become part of your finished product. This is the clearest categorization you have. For those $230 cutting machines, you're overthinking it! Since they're under the $2,500 de minimis threshold and have short useful lives, just expense them immediately under Operations Expenses - Supplies. No need for Section 179 or depreciation headaches for relatively inexpensive equipment. Packaging materials should go under COGS Materials and Supplies too - they're essential for delivering your finished product to customers, so they're part of your cost of goods sold. For utilities, if you track actual usage (like with a power meter), you can definitely claim more than just the standard home office percentage. Document your machine usage patterns and put the business portion under Operations Expenses - Utilities. Phone/internet business usage goes under Operations Expenses - Utilities at whatever reasonable percentage you can document. Those Costco storage bins are definitely just Operations Expenses - Supplies. At $12, they're way below any capitalization threshold. The key is reasonable documentation and consistency in your categorization approach!

Has anyone used any specific tax software that handles household employee situations well? I tried using [popular tax software] last year for my mother's caregiver and it was a nightmare trying to figure out the Schedule H and W-2 generation.

I went through this exact same situation with my grandmother's caregiver two years ago and learned some hard lessons. First, the IRS classification really does depend on the degree of control you have over the work, not just whether they work for other families. If you're directing what tasks need to be done, when they need to be at your home, and how the care should be provided, you're likely an employer regardless of their other clients. One thing I wish someone had told me earlier: even if you determine she should get a 1099-NEC as an independent contractor, you still need her Social Security Number or Individual Taxpayer Identification Number (ITIN), her full legal name, and address before you can file anything. The deadline for giving her the form is January 31st, and you need to file it with the IRS by the end of February (or March 31st if filing electronically). But honestly, given that you're paying her $26,000+ annually for regular ongoing care work in your home, this sounds like a textbook household employee situation to me. I'd strongly recommend getting professional help to sort this out properly - the penalties for misclassification can be significant, especially when you're dealing with this much money.

Has anyone here actually gone through an IRS audit over gifted stocks? I'm worried because I did something similar last year but don't have great records of my original purchase from like 15 years ago. What happens if you can't prove the original cost basis?

I went through almost this exact scenario with my mom last year when she gifted me some Apple stock she'd held since 2010. What everyone's saying about inheriting the cost basis is absolutely correct - I had to use her original purchase price from over a decade ago to calculate my capital gains, not the value when she gave it to me. One thing I'd add that hasn't been mentioned yet: make sure your daughter gets the holding period too. Since you held the stock for several years, she automatically qualifies for long-term capital gains treatment (even though she only held it briefly), which means lower tax rates. This is actually a nice benefit of receiving gifted stock versus inherited stock. Also, don't forget that your daughter will need to report this on Schedule D of her tax return, and possibly Form 8949 if her broker doesn't have the correct cost basis information. My broker initially showed the wrong basis (the value when gifted rather than mom's original purchase price), so I had to make an adjustment on Form 8949. It's worth double-checking what your daughter's brokerage reports to avoid any confusion when she files.

Has anyone else noticed that the withholding calculators seem to be way off for people with multiple jobs? I work a full-time job plus a weekend gig, and none of the calculators seem to handle this correctly. I always end up owing even when I follow their recommendations.

I've been dealing with this exact same frustration! What I discovered is that many calculators don't properly account for the timing of when you make the withholding changes during the year. If you're adjusting your W4 in April versus January, the calculations should be different because you've already had several months of potentially incorrect withholding. The IRS calculator is generally most accurate, but make sure you're entering your year-to-date withholding amounts correctly from your most recent pay stub. Also, if you have any life changes planned (like getting married, having a baby, buying a house), factor those into your calculations since they'll affect your tax situation. One trick I learned from my CPA is to aim for owing between $0-$100 at tax time rather than getting a big refund. That way you're not giving the government an interest-free loan, but you're also not hit with underpayment penalties. It takes some trial and error to dial it in perfectly, but it's worth the effort!

I just went through this exact situation with a CP22A notice a few weeks ago! Everyone's advice about selecting "Notice" in DirectPay is absolutely correct - that's definitely the right option for your CP22A payment. One thing I'd add that really helped me is to have a backup payment method ready, just in case there are any technical issues with your primary bank account. I ran into a temporary problem with my bank's online system during the payment process, and having my debit card information ready as a backup saved me from missing my deadline. Also, when you're entering your information, take your time and double-check everything before hitting submit. The system is pretty forgiving, but it's better to get it right the first time than to have to deal with payment corrections later. The whole process from start to finish took me about 15 minutes, and I got my confirmation immediately. Make sure to save that confirmation number - you'll want it for your records. The $825 will likely show up as pending in your bank account within 24-48 hours. Good luck with your payment!

I actually work in tax resolution and deal with CP22A notices regularly, so I can definitely help clarify a few things! You're absolutely right to select "Notice" as your payment type in DirectPay - that's the correct option for any IRS notice payment. Here are the key pieces of information you'll need to have ready: - Your Social Security Number (primary taxpayer if married filing jointly) - The notice number (should be clearly marked on your CP22A) - The notice date (exactly as printed on the letter) - Tax year the notice relates to - Your bank account and routing number (if paying by bank transfer - no fees vs. debit card fees) One thing many people miss: make sure you're paying the correct amount! If your notice is more than 2-3 weeks old, additional interest may have accrued since it was issued. You might want to add an extra $10-20 to cover any additional interest, or call the number on your notice to get the exact current balance. The DirectPay system will credit your payment on the date you submit it (if done before 8 PM ET), which is what matters for avoiding additional penalties. Just make sure to save/print your confirmation page - that's your proof of payment if any issues arise later. The whole process typically takes 10-15 minutes once you have everything organized. You've got this!