Would salon capes and towels fall under De Minimis or regular supplies? Each towel is like $8 but I buy them in bulk orders of $200-300. And what about things like a new salon software subscription? FYI I also use freetaxusa and its been so confusing trying to categorize everything correctly!

Great thread! As someone who's been doing taxes for small businesses for over 10 years, I wanted to add a few clarifications that might help Carmen and others in similar situations. First, you're absolutely right that consumable salon supplies (shampoo, hair color, etc.) are regular business expenses and don't need the De Minimis election. However, I've seen many salon owners miss deductions by not properly categorizing mixed-use items. Here's a practical tip for FreeTaxUSA users: Instead of trying to fit everything into "Other Expenses," use the main expense categories first. Put your consumable supplies under "Supplies," equipment repairs under "Repairs and Maintenance," and software subscriptions under "Office Expenses." Only use "Other Expenses" for truly unique items that don't fit elsewhere. Also, for record-keeping, I always recommend my salon clients take photos of their major supply deliveries and keep a simple monthly log of what they purchased. It doesn't need to be fancy - just enough detail that you can defend your deductions if questioned. The IRS loves to see organized, consistent record-keeping, especially for cash-heavy businesses like salons.

The IRS systems are so broken rn. My return from 2022 just got processed last week 💀

I had a similar situation last year with multiple 570 codes and no communication from the IRS. The key thing is that the August 2024 date doesn't necessarily mean they'll hold everything until then - it's more like a system placeholder. When I had this happen, my advocate told me that future-dated 570 codes often get resolved much earlier, especially if you stay on top of it. I'd definitely reach out to your tax advocate again since they have better access to what's actually happening behind the scenes. The fact that you got a small refund in April suggests they're processing parts of your return, which is actually a good sign that things are moving forward even if slowly.

For anyone wondering about timing - I filed an amended return for a similar issue (wrong 1099) in February last year. It took about 14 weeks to process. The IRS says to allow up to 16 weeks, but it could take longer during busy periods. Just make sure you pay any additional tax owed when you submit the amendment to avoid extra interest and penalties. The IRS will charge interest from the original due date until you pay.

This is exactly why I keep all my tax documents in separate folders by year now! Made a similar mistake a few years back with my 1099s and it was such a pain to fix. One thing I learned from that experience - when you file the 1040-X amendment, make sure to write a clear explanation in Part III about what happened. Something like "Used incorrect W-2 form from tax year 2022 instead of 2023" helps the IRS processor understand the situation quickly. Also, since you mentioned you haven't received your refund yet, the IRS will automatically adjust your refund amount once they process the amendment. If you end up owing more (which sounds likely given the raise), they'll reduce your refund accordingly. If you end up owing significantly more than your refund amount, you'll get a bill for the difference. The update in your post is really helpful for others - thanks for sharing how it worked out! That $4 refund check is probably just the remaining balance after they applied your original refund to the additional tax owed.

I think I'm the only one who puts these under "Utilities" on my Schedule C! My reasoning is that internet-based services are similar to other utilities like phone and internet service. My CPA hasn't flagged it as an issue for 3 years now. The category matters less than making sure you're only deducting the business portion and have documentation to back it up. Either "Office Expenses" or "Utilities" is fine - the IRS cares more about whether they're legitimate business expenses.

Great question! I've been dealing with this same issue as a freelance consultant. Based on my experience and research, these digital subscriptions typically fall under "Office Expenses" on Schedule C, Line 18. Here's how I categorize similar subscriptions: - Gmail premium storage: Office Expenses (it's a business communication tool) - Dropbox: Office Expenses (file storage/sharing for business) - LinkedIn Premium: Office Expenses (networking and client acquisition tool) The key is documenting your business use percentage. I keep a simple log for a few months each year to establish patterns. For example, if you use Gmail 70% for business emails, you can only deduct 70% of the cost. Some tax preparers might put these under "Utilities" or "Other Expenses" instead, but the IRS generally accepts any reasonable categorization as long as they're legitimate business expenses and you're only deducting the business portion. Keep all your subscription receipts and document how you calculated the business use percentage - this will be important if you're ever audited.

Make sure you're keeping track of all the business assets when you close down too. If you kept any equipment or inventory for personal use, you might need to report that as a distribution to yourself.

This is exactly the kind of situation that trips up so many business owners during closure! You've gotten some great advice here already. One additional thing to keep in mind - since you're filing what's essentially a final Schedule C for this business, make sure you've accounted for any outstanding accounts receivable or payable that might affect your final tax picture. If you had any unpaid invoices from 2021 services that you never collected on, you might want to consider writing those off as bad debt on this final return. Also, double-check that you've properly handled any equipment depreciation for the partial year 2022. If you sold, discarded, or converted business assets to personal use during the closure, you may need to calculate depreciation only up to the disposal date and potentially report gains/losses. The stress is totally understandable - business closures create some of the most complex tax scenarios. But you're asking the right questions and getting solid guidance here. Take it step by step and you'll get through it!