Just wanted to add something that might help - if you're planning to do any collaborations with other creators or businesses, having an ABN makes everything much smoother for invoicing and getting paid professionally. I wish I'd gotten mine earlier because I missed out on a few good opportunities when brands wanted to work with me but I didn't have proper business registration set up. Also, once you have your ABN, consider setting up a business bank account even if it's not required. It makes tracking income and expenses so much easier come tax time, and many banks offer free business accounts for sole traders with low transaction volumes. I use it exclusively for all my content creation income - YouTube ad revenue, sponsorships, merchandise sales, etc. Really helps keep everything organized!

This thread has been incredibly helpful! I'm also a content creator trying to navigate the ABN process and was feeling completely lost. Reading everyone's experiences has cleared up so many of my questions. One thing I'm still wondering about - when you're filling out the application and it asks about your business location, what do you put if you work from home? I create content from my bedroom/home office setup, but I'm not sure if I should list my home address as the business address or if there's a different way to handle this for content creators who don't have a separate business premises. Also, does anyone know if there are any specific insurance considerations for content creators once you have an ABN? I've heard some people mention public liability insurance but I'm not sure if that applies to YouTube/social media content creation or if it's more for people who film in public spaces or work with clients in person.

Just wanted to add one more consideration that hasn't been mentioned yet - make sure you're calculating depreciation based on the correct depreciable basis when you converted to rental use. Since you lived in the property first, your depreciable basis for the rental period would be the LESSER of: 1) your adjusted basis at the time of conversion (original cost plus improvements minus any casualty losses), or 2) the fair market value of the property when you converted it to rental use in May 2019. This matters because if your property appreciated significantly during those first 2 years of personal use, you can't depreciate based on the higher fair market value - you're limited to your original adjusted basis. You'll need to determine what the FMV was in May 2019 (maybe get a comparative market analysis from a realtor for that time period) and use whichever number is lower as your starting point for calculating the 4 years of depreciation.

One additional resource that might help you understand the calculation is IRS Publication 523 (Selling Your Home), which specifically covers the Section 121 exclusion rules for mixed-use properties. Since you lived in the home for 2 years before converting to rental, you may qualify for a partial exclusion on the personal-use portion of the gain. The key is that you'll need to separate your total gain into two parts: the portion allocable to personal use (first 2 years) and the portion allocable to business use (rental period). Only the personal-use portion would potentially qualify for the Section 121 exclusion, and even then, you can't exclude any depreciation recapture. Given the complexity with the mixed-use timing, depreciation recapture, and potential partial exclusion, I'd definitely recommend getting a tax professional involved. But understanding these basic concepts beforehand will help you ask the right questions and verify their work makes sense.

As a newcomer to this community, I'm blown away by the depth of knowledge and support being shared here! This thread has been incredibly educational for someone like me who's still learning about the complexities of tax-advantaged medical accounts. Reading through everyone's experiences has made me realize how easy it is for married couples to unknowingly create these HSA/FSA conflicts. The rules around spousal coverage seem particularly tricky - I had no idea that just being eligible for your spouse's FSA (even without using it) could disqualify HSA contributions. A few key takeaways I'm gathering from this discussion: 1. **Act immediately** - The sooner you address these conflicts, the more options you have and the lower the potential penalties 2. **Document everything** - Keep records of all communications with benefits administrators and any correction steps taken 3. **Professional help is worth it** - Given the complexity and potential IRS penalties, expert guidance seems like a smart investment 4. **Prevention is key** - Understanding these rules BEFORE open enrollment can save major headaches later @Carter Holmes - you've received some fantastic guidance here from people who've been through similar situations and professionals who deal with these issues regularly. The consensus seems clear on the steps you need to take. Best of luck getting everything sorted out! This discussion has definitely made me more aware of what to watch out for when my spouse and I are making our own benefits decisions. Thank you to everyone who shared their expertise and experiences!

As someone new to this community who's been quietly following this incredibly detailed discussion, I wanted to share my own experience that might help others avoid this situation entirely. My husband and I almost fell into this exact same trap last year. During open enrollment, I was excited about switching to an HDHP with HSA to maximize our tax savings, while he was planning to enroll in his employer's general FSA. Fortunately, a colleague mentioned these spousal coverage rules just before the enrollment deadline. What saved us was doing a "benefits coordination review" together before finalizing our elections. We literally sat down with both of our employee handbooks and mapped out how each account would interact. That's when we discovered the HSA/FSA conflict. Our solution was to have him enroll in a Limited Purpose FSA instead, which covers our dental and vision expenses while preserving my HSA eligibility. It's not as flexible as a general FSA, but the long-term HSA benefits (triple tax advantage, no use-it-or-lose-it rules, retirement healthcare planning) made it the better choice for our situation. For couples reading this thread, I'd strongly recommend doing this coordination review BEFORE open enrollment rather than discovering conflicts mid-year like @Carter Holmes did. The preventive approach is so much easier than the correction process everyone's describing here! This thread has been incredibly educational - thank you to all the professionals and community members who shared their expertise. The collective knowledge here could save countless couples from these costly mistakes.

One important thing to consider is organizing your records NOW before tax season gets busy. Since you mentioned shutting down the business a few months ago, this is actually perfect timing to get everything sorted while it's still fresh in your memory. Create a simple spreadsheet with columns for: Date, Item Description, Purchase Cost, Sale Price, Platform Fees, Shipping Costs, and Net Profit/Loss per transaction. Even if you don't have perfect records, try to reconstruct what you can from your bank statements, PayPal records, and any Whatnot transaction history you can download. Also consider whether you want to treat this as a sole proprietorship (Schedule C) or if there are any advantages to filing as a partnership since you mentioned this was run with your partner. The tax implications can be different, and you might want to consult a tax professional for that specific question since it involves two people and substantial income. The key thing is that high gross sales with low/no profit is actually pretty common in reselling, especially when markets get saturated like you described with Lego. The IRS understands this, but you need solid documentation to support your expense claims.

Something to keep in mind - since you mentioned your partner ran the business but you're both concerned about taxes, make sure you're clear on whose SSN/EIN the Whatnot account was registered under. Whoever's tax ID is associated with the account will receive the 1099-K and be responsible for reporting all the income, even if you both contributed to the business. If the account was under your partner's SSN but you both invested money and time, you'll need to figure out how to handle the income split. The person who gets the 1099-K will need to report the full gross income on their Schedule C, but they can potentially "expense out" payments made to you as a business partner - though this gets complicated without formal partnership agreements. Also, don't stress too much about the high gross sales number. The IRS sees this all the time with resellers, especially on platforms like Whatnot, eBay, etc. What matters is your net profit after legitimate business expenses. Just make sure you have documentation for your major expense categories: inventory costs, shipping supplies, platform fees, storage costs if you rented space, mileage for sourcing inventory, and even a portion of utilities if you used part of your home for the business. The key is being organized and honest about your record-keeping. If you lost money or barely broke even, that's a legitimate business outcome that the IRS recognizes, especially in competitive reselling markets.

TurboTax is total garbage, I'm not surprised at all. Last year it completely missed my student loan interest deduction even though I entered all my 1098-E forms correctly. Switched to FreeTaxUSA and got way better results.

This is exactly why I always recommend getting a second opinion when there's a big discrepancy like this! I had a similar situation a few years ago where TurboTax had me owing $800 while my CPA got me a $1,200 refund. The difference was mostly in how business mileage and home office expenses were calculated for my freelance work. One thing to watch out for - make sure your H&R Block preparer can actually explain their work line by line. Sometimes preparers make mistakes too, and you want to understand exactly what they're claiming on your return. I've seen cases where overly aggressive preparers get people in trouble with the IRS later. When you meet with them, ask for a detailed breakdown of every deduction and credit they applied that TurboTax didn't catch. That way you'll know for future years whether their fee is worth it or if you can replicate their work yourself.