I've been dealing with this exact same confusion and wanted to add another perspective that might help. After going through all the responses here, I decided to dig into the actual IRS guidance myself since my tax preparer was also insisting my entire state refund was taxable. What I found really helpful was looking at IRS Revenue Ruling 2019-11, which provides specific examples of how the SALT cap affects state refund taxability. The ruling makes it clear that if you paid more in state taxes than you could deduct due to the $10,000 SALT limitation, then your state refund is only taxable to the extent it exceeds the amount you couldn't deduct. In your case, you paid $12,500 but could only deduct $10,000, so you got no federal tax benefit from $2,500 of your state tax payments. Since your refund ($1,800) is less than this amount, it should be completely non-taxable on your 2024 return. The worksheet your tax preparer is using is probably the standard Publication 525 worksheet, which doesn't account for the SALT limitation properly. There's actually a modified calculation you need to do when you've hit the SALT cap. I ended up having to educate my own tax preparer on this issue by bringing him the specific IRS guidance. It's frustrating that we have to do this, but the SALT cap is relatively new and many preparers haven't fully caught up on all the nuances yet.

Welcome to the community! This is exactly the kind of complex tax situation that trips up so many people, and you're definitely not alone in being confused about how the SALT cap interacts with state refund taxability. Based on your numbers, it sounds like your entire $1,800 state refund should be non-taxable. Here's the key principle: since you paid $12,500 in state taxes but could only deduct $10,000 due to the SALT cap, you received no federal tax benefit from that extra $2,500. Because your refund ($1,800) is less than the amount you got no benefit from ($2,500), the entire refund should be excluded from your taxable income. The standard state tax refund worksheet in Publication 525 doesn't properly account for the SALT limitation, which is probably why your tax preparer is getting a different result. You'll want to reference IRS Notice 2019-12 and Revenue Ruling 2019-11, which specifically address this interaction. I'd suggest printing out these IRS documents and having another conversation with your tax guy. Many preparers are still catching up on how the relatively new SALT cap affects these calculations. The fact that you hit the cap creates a "buffer" that makes part or all of your refund non-taxable, depending on how much you paid above the $10,000 limit. Don't be afraid to push back with the proper documentation - this is a legitimate tax position supported by official IRS guidance, not just internet advice!

One thing I haven't seen mentioned yet is the timing of your purchase. Since you're planning a significant truck purchase, consider whether it makes sense to buy before year-end to maximize your 2025 tax benefits, or wait until early 2026 if you expect higher business income next year. With Section 179 deductions, you can only deduct up to your business income for the year. If your aquatic training business had a slow first year but you're expecting growth in 2026, it might make sense to time the purchase when you can fully utilize the deduction. Also, keep in mind that for vehicles over 6,000 lbs GVWR, there are some additional considerations around "listed property" rules if you ever use it for personal purposes, even occasionally. The IRS scrutinizes these deductions more heavily, so that immaculate record-keeping everyone mentioned becomes absolutely critical. Have you calculated what your business income will be for 2025? That should factor into both the timing and method of your vehicle purchase decision.

The timing question is crucial and you're smart to think about it strategically! For Section 179, the key is that the vehicle must be "placed in service" during the tax year you want to claim the deduction. This means you need to actually purchase and start using the truck for business purposes, not just order it. The specific month within the tax year doesn't matter for Section 179 - whether you buy in January or December 2026, you can still claim the full deduction for that year (assuming you have sufficient business income). This is different from regular depreciation where timing within the year can affect the deduction amount. However, there's another consideration: if you're expecting significant income growth, you might also want to evaluate whether taking the Section 179 deduction all at once in 2026 is better than spreading depreciation over several years. With a growing business, you might benefit from having larger deductions available in future years when you're in higher tax brackets. Given your situation with corporate contracts lined up, waiting for early 2026 seems like the right call. Just make sure to factor in any potential changes to Section 179 limits or tax rates that might take effect in future years when making your final decision.

Great question! I went through something similar when I started with a prop firm last year. Here are a few things that really helped me: First, definitely find a CPA who has experience with traders - it makes a huge difference. They'll understand things like trader tax status elections, wash sale rules, and which expenses are actually deductible for prop trading. For quarterly payments, I'd recommend setting aside about 25-30% of your net trading profits in a separate account. Better to overpay slightly than get hit with underpayment penalties. One thing to watch out for - make sure you understand your prop firm's payout structure. Some firms issue 1099s for your full share of profits, while others deduct their fees first. This affects how you report expenses on Schedule C. Also keep detailed records of everything: trading software, data feeds, home office expenses, computer equipment, education materials, and even a portion of your internet bill. These can add up to significant deductions. The key is staying organized from day one. I use a simple spreadsheet to track all trading-related expenses throughout the year, which makes tax time much easier. Don't stress too much - lots of people successfully navigate this. Just get the right professional help and keep good records!

I'm in a very similar situation - just started with a prop firm a few months ago and feeling overwhelmed by the tax implications! This thread has been incredibly helpful. One thing I'm still confused about though - do I need to register an LLC or any business entity for prop trading, or can I just report everything on Schedule C as a sole proprietor? My prop firm mentioned something about business registration but I wasn't sure if that was required or just recommended. Also, has anyone dealt with the situation where you're profitable some months but have losses in others? I'm wondering how that affects the quarterly estimated payments - do I need to adjust them throughout the year based on my actual performance, or just stick with a consistent amount each quarter? The record-keeping advice is gold - I'm definitely going to start that separate business account and expense tracking system right away. Thanks everyone for sharing your experiences!

I'm going through the exact same thing right now! Got my 520 code on 02/28/2025 and 971 code on 03/05/2025. Like you, I'm stressed about the timing because I have some major expenses coming up. What's really frustrating is that I've filed basically the same return for the past 4 years - same job, same deductions, just minor changes in income. The only difference this year is I claimed the Child Tax Credit for my 2-year-old for the first time. Reading through everyone's experiences here is actually making me feel a bit better though. It sounds like most people are getting their refunds in the 3-4 week range rather than the full 45 days. I'm going to try calling this week to see if they can give me any specifics about what they're reviewing. Fingers crossed we both get good news soon!

I went through this exact situation two years ago and want to share what I learned. The 520/971 combo usually means they're doing income verification or checking credits - in your case, probably the new Child Tax Credit eligibility since that's the main change. Here's what helped me: 1) Don't panic about the 45 days - most people get resolved in 25-35 days, 2) Keep checking your transcript weekly (not daily, it rarely updates that fast), 3) Make sure your bank account info is still correct in case they need to issue the refund. The good news is that if they were going to deny or reduce your refund, you'd typically see different codes. The 520/971 pattern usually just means "we're double-checking everything looks right" rather than "we found a problem." Hang in there - daycare expenses are stressful enough without tax delays!

I work in a university bursar's office (not at your school) and I can tell you that your school's stance is unusual but not unheard of. One workaround that sometimes helps: check any financial documents you received from them - sometimes the EIN appears on receipts, financial aid award letters, or even in the footer of official correspondence. Also, try calling and specifically asking for the "accounts payable" or "vendor relations" department instead of student services. These departments often have the EIN readily available since other businesses need it for their own tax purposes when paying the school.

I went through this exact same headache last year with my online certification program! Here's what ultimately worked for me after trying everything else mentioned here: First, I did find success with the IRS Tax Exempt Organization Search that Omar mentioned - but you have to try different variations of the school name. My school went by an abbreviated name with students but was registered under their full legal name with "LLC" at the end. If that doesn't work, there's another angle: check if your school is accredited by a recognized accrediting body. You can often find their EIN through the accreditor's database or the Department of Education's database of accredited institutions. One thing to keep in mind - even if you use the zeros method that others mentioned, make sure you're claiming the right credit or deduction. At $14,500 in tuition and depending on your income, the Lifetime Learning Credit could save you up to $2,000, which is probably better than the tuition deduction. The American Opportunity Tax Credit unfortunately doesn't apply to graduate programs. Also, keep detailed records of everything - not just payment receipts but also your enrollment verification, course syllabi, and any communication with the school about their refusal to provide the EIN. This documentation will be crucial if the IRS has any questions later.