Free answers to tax return questions by a licensed CPA (Vol 2)

@poids are you a billionaire? If so you’re good.

However… If you’re a lowly peasant you best not try to get one past the DOGEbags. Elone needs to take every penny you hav… err, I mean every one of your… tax dollars… yes. They are needed to blow up more metal tubes. It’s for the future!
They are currently hiring 2x IRS agents per peasant making less than 1M to “maximize efficiency”… And look forward to further maximized efficiency when they simply skip the silly step of paying peasants at all.

@agnesnutter so you moved from one state to another while working for the same employers-did they withhold pay re each state and give you 2 w-2 showing the amounts earning and withheld for each state’s withholding.

At the very least going to have to file part year returns for both states. And only pay taxes on the income earned in that state unless the states have a reciporical agreement like VA, MD and DC do.

Have to know more like which states and did you get 2 w-2 to give you a more specific answer.

@Felton10 I moved VT->RI. They only gave me one W2… AFAICT they withheld from RI the whole time (I started in Feb and moved to RI in March), but I’m not at all confident I’m not just missing something

@agnesnutter Well not really familiar with how either of those states treats people moving in and out of the state but most states are pretty similar in taxing just the income you earned while a resident of that state.

Shouldn’t be too bad as you only lived in VT one month before you moved to RI. So for both states you probably have to start with the AGI from your federal return and then subtract income earned during the period of non residence. Different states have different forms to file if your are a resident for a partial year or mark the form as a partial resident and then ask for the dates you lived in the state.

If everything I am saying confuses you-probably should get a local CPA for prepare your return for this year. Not that complicated but you have to understand the terms and know how each state treats people moving in and out of the state.

Hope all this helps.

@agnesnutter One other point-MD, VA and DC all have reciprocal agreements with each other since so many people work in one jurisdiction and live in another which means they pay taxes in the place they live not where they earned the money.

In your situation, RI might require you to pay taxes on the money you earned while living in VT. In that case to avoid paying state taxes on the same income for one month twice, you can probably take a credit on one of the state’s return for taxes paid to the other during that month period. A person more familiar with RI taxes would be better able to advise you.

@OnionSoup Doubt it as a general rule but if you are a w-2 employee there is no more itemized deductions for unreimbursed employee business expenses but if you file a sch C there are plenty of place to hide all sort of questionable deductions. But not saying you should do that.

@OnionSoup I bet Timothy Leary claimed it as a work expense.

@justinmatula If you want to go to jail you can.

@pakopako Sorry so late-didn’t see your question. You don’t have to submit your 1099’s only docs like w-2 and 1099-R’s that have withholding on them and 1099’s usually don’t. No discount for sending return in early. The 1099’s actually have to be sent to the IRS and you at the end of January which was a change from the end of Feb a couple of years ago. Brokerage co get till March 15th due to their complexity to mail them out.

Also, where can I indicate some of it was paid (or gifted?) to them?

@Bretterson No it will probably all go on sch c where the total of the 1099-K will most likely populate (program will probably give you options where the total should go). Then you will put the cost of all the items sold-whether FMV, what you paid for them etc under Cost of Goods Sold. No need to break out the different categories of cost but I suggest you better have something to back up the total figure you put on the return for the cost of the items sold.

Assume with that amount of sales you will probably have to pay SE tax on it unless you have another job since 220 indicates more than doing it for a hobby.

@Felton10 Gotcha. I was going to put the amounts I paid to my friend and brother as an expense on the item.

TurboTax wants me me put in every single transaction unless I do it myself directly on the forms. I don’t feel confident enough that I’m completing the forms correctly so I guess I’ll be entering them one at a time. Blerg.

I have two jobs with W-2s. Believe it or not, more than half of the transactions are actually my own things. Some of it is from IRKs! I’ve been trying really hard to get rid of stuff, and I have a lot.

@Bretterson Not really familiar with Turbo Tax and its idiosyncrasies as my tax program is one made for tax preparers but there shouldn’t be any reason that you can’t put a total amount rather having to enter each sale one by one as that would be insane. I am sure the IRS is not looking for that type of detail on the return as the Sch C is a “total” driven form-it does not ask for a breakdown of most of the categories-taxes and other expenses being the exception. Having a mixtures of types of basis for the items in CGS can be a challenge, but think if you put everything on a spreadsheet by columns to arrive at CGS totals, it would be time consuming but doable.

And even if the numbers on the sch C look a little out of wack, if that is an insignificant $ amount compared to the rest of the income on your return, doubt if the computer would spit your return out to be examined in any more detail. The IRS has encountering of lot of unforeseen issues with the 1099-K that is why they postponed its initial implementation due to all the questions and issues using it that were raised.

@Felton10 I already entered about half of the transactions, but I’d happily not do more. eBay provides a CSV of all the transactions and a full breakdown of expenses. I’ll give the forms another look to see if I can figure it out. Thanks.

@Felton10 Just getting back to this. So, I figured out all the numbers outside of TurboTax and now I just need to put them somewhere… but TT hasn’t put a Schedule C in my list of forms. It looks like it’s feeding the 1099-B worksheet into the Schedule D form, does that seem right?

EDIT: Actually, it looks like it’s feeding the worksheet into form 8949 which then goes to Schedule D.

@Bretterson Don’t know how Turbo tax works, but 1099-K input should go to Sch C. Are you sure your version of Turbo Tax supports Sch C as maybe a cheaper version doesn’t include that form? 1099-B is primarily for stock and other investment sales and yes it first goes to 8949 to determine whether short term or long term and whether the cost basis is sent to the IRS or not.

@Bretterson looked it up-previous yr answer but mostly likely the same for this year.

Which versions of TurboTax contain Schedule C? - Intuit
ttlc.intuit.com/community/business-taxes/…
Nov 20, 2023 · Which versions of TurboTax contain Schedule C? To fill out Schedule C for self employment. You can enter Self Employment Income into Online Deluxe but if you have any expenses you will have to upgrade to the Premium or use any of the Desktop CD/Download programs.

@Felton10 I just found this and I guess it depends what you sold: https://www.irs.gov/businesses/what-to-do-with-form-1099-k#use
It sounds like the stuff I sold for my friend and brother belongs on the Schedule C, but my own personal belongings go to Schedule D. Fun!

Fortunately, the version of TurboTax my dad bought (actual software) does contain both C and D.

@Bretterson From the IRS directly

www.irs.gov/businesses/what-to-do-with-form-1099-k
Mar 3, 2025 · Here’s where to report Form 1099-K payments on your tax return for goods and services you sold: Gig worker, freelancer, hobby seller and other self-employed – You’re considered a sole proprietor and should report Form 1099-K payment information on – Schedule C (Form 1040), Profit or Loss from Business (Sole Proprietorship).

@Felton10 Right, that seems to be the case for items I sold on the behalf of others, but here it says personal items go on Schedule https://www.irs.gov/businesses/what-to-do-with-form-1099-k#personal

@Bretterson Wasn’t aware of that-the one 1099K I had from a client was from one who sold jewelry she made on ebay so Sch c was right for her. If you have to put them on Sch D via 8949 then you probably do have to list them separately which is really going to be a pain in the ass since you have to put a acquisition and sales date for each item. Although you do have the option of grouping them together by short and long term gains and submitting a detailed schedule along with form 8453 with the last item on the page re form 8949 checked and send that separately to the IRS.

@Felton10 Of course the transactions I’ve already entered individually (in the wrong spot) weren’t my own

@Felton10 I thought I was done but TurboTax threw a wrench at me that I don’t understand:

I know it’s coming from where separated my personal item sales here:

I calculated that $937 outside of TT; it’s the total profit I made from items I had receipts for and could indicate there was a loss (or a lower gain). It was adjusted to zero out items that went negative (so a loss from one item wouldn’t impact other items). It was entered here in TT:

I’m confused what it wants me to do to fix this. Is it saying the total from the transactions I listed doesn’t match?

@jouest I’ll leave that decision up to you.