Has anyone used the IRS's worksheet for calculating NOLs with the 80% limitation? I found it super confusing because there seem to be different versions and some don't clearly address how to handle current year expenses vs. carryover amounts.

The IRS worksheets can definitely be confusing! I've been dealing with NOL calculations for my consulting business for several years now. What helped me was understanding that the calculation happens in stages: 1) Calculate your current year taxable income INCLUDING all current year business expenses and deductions 2) Apply the 80% limitation to that final taxable income amount 3) Use your NOL carryovers up to that 80% limit The tricky part is that different tax years' NOLs follow different rules. My 2017 NOLs can offset 100% of income, but my 2021+ NOLs are limited to 80%. I keep a simple tracking spreadsheet that shows each year's NOL balance and which limitation applies. One thing that caught me off guard - if you have NOLs from multiple years, you generally have to use them in chronological order (oldest first). This can affect your tax planning since the older NOLs might have more favorable rules. @Paolo Ricci I'd actually love to see that spreadsheet you created if you're willing to share it! The IRS worksheets are really hard to follow.

Just to clarify something important - Form 8919 doesn't eliminate your tax liability. You still owe the income tax on all those earnings. What Form 8919 does is ensure you're only paying the employee portion of Social Security and Medicare taxes (7.65%) rather than the full self-employment tax rate (15.3%). For someone in your tax bracket, you should probably be setting aside around 15% for federal income tax PLUS the 7.65% for Social Security/Medicare. So that 20% your mom suggested might actually be a bit low depending on your total annual income. I'd recommend using the IRS Tax Withholding Estimator tool to get a more precise figure based on your specific situation.

One thing I haven't seen mentioned yet is that you may want to make quarterly estimated tax payments to avoid underpayment penalties. Since your uncle isn't withholding taxes yet, the IRS expects you to pay taxes throughout the year, not just at filing time. If you expect to owe more than $1,000 when you file, you should be making quarterly payments by January 15th, April 15th, June 15th, and September 15th. You can use Form 1040ES to calculate these payments, or pay online through the IRS Direct Pay system. This is especially important since you mentioned your hours being cut - if you can't consistently set aside 25-30% from each paycheck, making sure you at least hit the quarterly payment deadlines can help you avoid additional penalties on top of what you already owe. The penalty for underpayment can be around 8% annually, which adds up quickly on a large tax bill. Also, keep all documentation about your attempts to get properly classified as an employee - emails with your uncle, records of calls to the DOL, etc. This shows good faith effort to resolve the situation properly.

For what it's worth, I had this exact same error last year. The problem was that I checked the box saying my main home was in the US for more than half the year, but then I incorrectly filled out Part I-B instead of Part I-A on Schedule 8812. Double check which part of Schedule 8812 you're completing. If you checked the US residency box, you should be filling out Part I-A, not Part I-B. The error happens when there's a mismatch between your residency selection and which calculation section you complete.

I had the exact same IND-460 error with Schedule 8812 last month and it drove me crazy! After hours of troubleshooting, I found the issue was in the calculation flow between forms. Here's what fixed it for me: Go to your Form 1040 Line 19 and write down that exact amount. Then go to Schedule 8812 and make sure you're using the correct worksheet (Part I-A if you're a US resident, Part I-B if not). The amount that flows to Line 15 on Schedule 8812 MUST match Line 19 on your 1040 exactly. The error happens because Free Fillable Forms doesn't automatically sync these amounts like paid software does. You have to manually ensure they match. Also double-check that you haven't accidentally entered the same child in multiple places or mixed up refundable vs non-refundable credit amounts. Once I made sure these numbers were identical and consistent with my residency status, the error disappeared and I could finally e-file!

Has anyone here successfully used the "domestic funds exception" for Form 8621? My understanding is that if you own PFICs through a domestic US mutual fund or ETF, you don't have to file Form 8621 yourself because the US fund does it. Would save me a ton of headache!

I went through almost the exact same situation last year with a small foreign fund investment that I had no idea would create such a tax nightmare. After lots of research and consulting with a tax professional, here's what I learned: You're correct that the $25,000 exemption applies to the ENTIRE Form 8621, not just Part I. The key is in Treasury Regulation 1.1298-1(c)(2) which provides complete relief from filing if you meet all the criteria. For your $65 investment, assuming you haven't received any distributions or sold any shares, you should qualify for the complete exemption. Just make sure to document this decision in case you're ever questioned. My advice? If you're planning to continue investing internationally, consider switching to US-domiciled international funds (like VTI or VXUS) to avoid future PFIC headaches entirely. The reporting requirements are so disproportionate to small investments that it's often not worth the hassle. Also, keep detailed records of your investment amounts and any distributions (or lack thereof) to support your exemption claim. The IRS burden of proof is on you to show why you didn't file if they ever ask.

Don't overthink this. The property is still a rental until you sell it. Expenses still go on Sch E. If you get audited, the IRS isnt gonna care that it was vacant while u were trying to sell it. Happens all the time.

I went through this exact situation two years ago with a duplex that sat vacant for 5 months while trying to sell. What really helped me was creating a clear paper trail showing my intent to sell rather than abandon the property. I kept copies of all MLS listings, price reduction notices, showing feedback, and even rejection letters from potential buyers. When I filed my Schedule E with expenses but no rental income for those months, I included a brief statement explaining the vacancy was due to active marketing for sale. The IRS never questioned it, but having that documentation gave me peace of mind. Also, make sure you're only deducting expenses that you would have paid anyway as a rental property owner - don't try to deduct any costs specifically related to marketing the property for sale, as those should be treated as selling expenses when you calculate capital gains. One tip: if you're doing any repairs or improvements to help with the sale, be careful how you categorize those. Minor repairs to maintain the property can still go on Schedule E, but major improvements to increase sale value should be added to your basis.