Should I file my small business taxes myself or hire a CPA for first-time business filing?

What about business deductions? Is it easy to miss some when filing yourself? Also I heard you can deduct startup costs from before the business was even officially open - is that true?

Yes, deductions are where DIY filers sometimes leave money on the table. The software will prompt for common ones, but may not catch industry-specific deductions. For a retail shop, track everything from store supplies and fixtures to advertising and merchant fees. You're absolutely right about startup costs. The IRS allows you to deduct up to $5,000 in startup costs in your first year of business, with amounts over that threshold amortized over 15 years. This includes expenses incurred before your official opening like market research, training, travel related to starting the business, and advertising. Just make sure to document everything with receipts and notes about the business purpose.

How does it work with inventory and cost of goods sold? My shop has different types of products and I'm confused about tracking all that stuff for taxes.

Seems fishy. Does it actually connect you with real tax professionals or is it just glorified software? And how much does it cost compared to a legit CPA?

It has specific sections for inventory management where you can upload your inventory list and it categorizes everything properly for tax purposes. It distinguishes between different types of inventory and calculates your cost of goods sold accurately. Made it super simple for me. As for the professional aspect, it's not just software - it combines AI analysis with tax expert verification. They have CPAs who review complex situations. Cost-wise, it was significantly cheaper than the quotes I got from local accountants, especially for a small business. I paid less than a quarter of what CPAs were charging me for basically the same result.

Wait what? How does this actually work? The IRS phone system is notorious for being impossible. Is this just paying to wait on hold or something?

This sounds like a scam. Nobody gets through to the IRS that quickly. Are they just collecting your info and selling it?

It uses a system that navigates the IRS phone tree and waits on hold for you. When they reach a live agent, you get a call connecting you directly. No more spending hours listening to hold music or getting disconnected. Your phone literally rings when there's an agent ready to talk. They don't sell your information or interact with the IRS on your behalf at all. They're just solving the phone problem. All your tax details stay private between you and the IRS agent. It's basically just a very specialized hold service that knows how to navigate the complex IRS phone system better than we do as individuals.

But doesn't claiming a business loss increase your chance of getting audited? I've heard the IRS flags new businesses that report losses right away.

There's a common misconception about loss reporting. A business loss itself doesn't automatically trigger an audit, especially for the first year when startup costs often exceed revenue. The IRS expects many legitimate businesses to operate at a loss initially. What raises flags is when losses continue for multiple years or when the losses don't make sense for your business type. For a retail shop that just opened, having startup costs and initial inventory purchases that exceed one week of sales is completely reasonable and normal. Just make sure you're treating the business as a business - keep separate records, maintain proper documentation, and don't try to claim personal expenses as business deductions.

Is QuickBooks really worth the monthly cost for a tiny business though? Are there free alternatives that work for very small operations?