Quick tip for the OP - make sure you're also factoring in any fees you paid when exercising or selling. Those can be added to your basis as well. Every dollar counts when you're trying to reduce the taxable gain!

Just want to add another important consideration - timing of when you actually paid the AMT matters for your basis adjustment. If you exercised ISOs in December 2014 but didn't actually pay the AMT until you filed your return in April 2015, some tax professionals argue the basis adjustment shouldn't apply until the 2015 tax year. This mainly affects people who did cashless exercises or had complex timing situations. For most people who did cash exercises and paid AMT in the same calendar year, it's straightforward. But if there's any timing complexity in your situation, you might want to double-check this detail. Also, keep really good records of everything - copies of your Form 6251 from 2014, your stock option exercise confirmations, and all the supporting calculations. The IRS has been scrutinizing ISO transactions more closely in recent years, so having bulletproof documentation is crucial if you ever get selected for review.

Has anyone ever actually been audited specifically for sales tax deductions? I've always been told the IRS doesn't really question sales tax unless it's absurdly high compared to your income.

I'm dealing with a similar situation this year! I live in Texas (no state income tax) and made several major purchases including a new HVAC system and some furniture. My calculated sales tax is about 4x higher than the IRS calculator suggests. After reading through all these responses, I'm feeling much more confident about using my actual calculation. The key seems to be having a clear methodology and keeping good records for the big-ticket items. I've been keeping a spreadsheet with purchase categories and applying the appropriate tax rates (8.25% general, 6.25% for certain items in my county). One thing I learned from my tax prep course is that the IRS sales tax tables are really just statistical averages based on consumer spending surveys. They don't account for life events like moving, major repairs, or simply having different spending patterns than the "average" taxpayer in your income bracket. Marcus, your programming approach actually sounds more thorough than what most people do. As long as you can explain your methodology and have the bank statements to back it up, you should be fine. The charitable donation is a separate issue entirely - just make sure you have proper acknowledgment letters from the organization.

Has anyone here actually tried to file an Offer in Compromise themselves? I'm hearing mixed things about how hard it is to get accepted. I've got about $25k in tax debt and a resolution company wants $4k to handle it.

Ruby, please don't pay that tax resolution company $16k! You can absolutely handle this yourself and save thousands. Here's what I'd recommend based on your situation: First, pay your 2023 taxes directly to the IRS with that $10k you have saved. This keeps you current and eligible for relief programs. Never fall behind on current year taxes while trying to resolve old debt. For the remaining $30k, you have several options you can pursue yourself: 1. Request Currently Not Collectible status if paying would create hardship - this pauses collections for free 2. Set up an installment agreement directly with the IRS 3. File an Offer in Compromise yourself using Form 656 The IRS actually has great resources and payment calculators on their website. You can also call them directly (or use a callback service like Claimyr if you can't get through) to discuss your options with an actual IRS representative who can explain what you qualify for. I've seen too many people get scammed by these resolution companies promising miracles. Save your money and handle this directly with the IRS - they're usually much more reasonable to work with than these companies make them out to be.

Just wanted to add something important - make sure you track your business expenses! That $2600 isn't all taxable if you spent money to earn it. Did you buy any equipment? Software subscriptions? These can be deducted from your income before calculating taxes. I made about $3000 last year from my Etsy shop, but after deducting all my supplies and shipping costs, my taxable income was only about $1800. That saved me a decent amount on self-employment taxes.

I'm in a similar boat - made around $1,800 from tutoring other kids in my neighborhood and now I'm panicking about taxes. Reading through all these responses has been super helpful though! One thing I want to add is that you should definitely keep good records going forward. I wish I had tracked my expenses better from the start. Things like if you had to buy any coding books, pay for software licenses, or even gas money driving to meet clients - these could all potentially be business deductions. Also, don't beat yourself up about not knowing this stuff. Most adults don't understand taxes either! The important thing is you're asking the right questions now and taking care of it properly. Better to file late than never file at all, but you still have plenty of time before the April deadline. Good luck with everything - sounds like you've got some solid options with the tax software people have recommended here.

I switched from a national chain ($800) to a local CPA ($500) for my S-Corp and got much better service. The national chains use a business model based on volume and standardized processes, while local CPAs can be more flexible with pricing for simple returns. Look for a small local firm that specializes in small businesses. Be upfront about your situation - tell them you have everything organized and just need the final tax prep. Many will offer tiered pricing based on complexity.

As a small business owner who's been through this exact situation, I can relate to your frustration with the pricing. What really opened my eyes was when I asked my tax preparer for a detailed breakdown of their process. Turns out they spend about 20 minutes on data entry but another 90 minutes on review, verification, and compliance checks I never considered. The real value isn't just in the data entry - it's in catching potential issues before they become IRS problems. Last year my preparer caught that I was misclassifying some expenses that could have triggered an audit. They also identified a depreciation error from two years back that saved me from having to amend multiple returns. That said, $750-$1200 does seem steep for a straightforward S-Corp. I'd recommend getting quotes from 2-3 local CPAs who specialize in small businesses. Many will give you a phone consultation to understand your situation and provide a more accurate quote. You might find someone who charges $400-600 for the same quality of work, especially if you emphasize how organized your records are. The key is finding someone who values efficiency and is willing to price accordingly when a client makes their job easier.