This is exactly the kind of question I had when I first heard about PTET! I think there's a common misconception that it only helps itemizers, but that's not the case. The way I understand it (and please correct me if I'm wrong), PTET essentially lets you "double dip" in a sense - your business gets to deduct the state taxes it pays, which reduces the income that flows through to your personal return, AND you still get to claim your full standard deduction on top of that. So in your case with $7,800 in state taxes, if your LLC elects PTET and pays those taxes directly, your Schedule C income would be reduced by $7,800 before it hits your 1040. Then you'd still claim the $14,600 standard deduction as usual. The federal tax savings would be roughly $7,800 times whatever your marginal tax bracket is. One thing I'm curious about though - does anyone know if there are any downsides to making the PTET election? Like, are there any situations where it could backfire or create complications? I'm always skeptical when something sounds too good to be true! Also, @Dyllan, have you checked if your state even offers PTET yet? I know not all states have implemented it, and the rules can vary quite a bit from state to state.

You're absolutely right to question whether PTET only benefits itemizers - that's a common misconception! PTET can actually be quite beneficial for standard deduction filers like yourself. Here's the key insight: PTET moves your state tax deduction from the personal level (subject to SALT cap) to the business entity level (not subject to SALT cap). This reduces your pass-through business income BEFORE it flows to your personal return, where you still get to claim the full standard deduction. In your situation with $105-125k business income and $7,800 in state taxes, electing PTET could save you roughly $7,800 × your marginal federal tax rate. If you're in the 24% bracket, that's potentially $1,872 in federal tax savings annually, while still claiming your full $14,600 standard deduction. A few things to verify for your specific situation: - Does your state offer PTET? (Not all states have implemented it yet) - What are your state's specific PTET rules and deadlines? - Are there any state-level benefits or credits that might be affected? The main considerations are usually around cash flow (entity-level estimated payments) and administrative complexity, but for most single-member LLCs in your income range, the math works out favorably. I'd recommend running the numbers both ways or consulting with a tax pro familiar with your state's PTET implementation to confirm the potential savings!

I have the code 766 with date 04/15/2023 What does this mean please

Hey Angela! I see you're dealing with the same Form 8812 issues that have been plaguing a lot of folks this tax season. The code 766 with a negative amount on 4/15/2022 is actually showing that the IRS processed an adjustment to your Child Tax Credit - the negative means it's a credit in your favor, not a deduction. Since you mentioned your tax preparer already filed an amended return to fix the Form 8812 error, that $3,000 should eventually be released to you. However, I'd definitely recommend calling the IRS to confirm the timeline, especially since you received that notice in March. The 570/571 codes on your transcript show there was a temporary hold that's been resolved, which is good news. Just be patient with the phone lines - try calling early morning for better luck getting through!

VA taxpayer here! I'm actually going through this exact same thing right now - just completed my ID verification 4 days ago and have been anxiously waiting. Based on all the experiences shared here, it sounds like 7-14 business days is pretty standard after verification. The most helpful tip I've seen is to stop obsessing over the Where's My Refund portal (guilty as charged!) and just check your bank account directly each morning. Seems like that portal is notoriously unreliable and often doesn't update until after you've already been paid. Fingers crossed we all get our refunds soon! 🤞

VA taxpayer here! Just wanted to share my recent experience to help ease some anxiety. I completed my ID verification exactly 2 weeks ago and my refund hit my account yesterday morning - took 10 business days total. Like everyone else is saying, the Where's My Refund portal is absolutely useless! Mine still showed "processing" even AFTER the money was already in my account 🤦‍♀️ My best advice: stop torturing yourself with that portal and just check your bank account each morning. From reading all these comments, it seems like 8-12 business days after verification is pretty typical for VA this year. You're definitely in the home stretch since you just completed verification! The hardest part is behind you - now it's just the waiting game. Hang in there! 💪

Great question about Section 86(e) and how it interacts with subrogation payments! You're right to think about the complexity this adds. When using the lump sum election, you would typically need to allocate both the income and the related deduction proportionally across the years the backpay covers. So if your SSDI backpay covered 3 years, you'd split both the SSDI income and the subrogation repayment deduction across those same years in proportion to the benefits that were supposed to be paid in each year. However, there's some debate among tax professionals about whether the repayment should be allocated proportionally or taken entirely in the year of actual repayment under Section 1341. The IRS hasn't provided completely clear guidance on this specific interaction. Regarding amended returns - the lump sum election typically requires you to calculate the tax both ways (as if received when due vs. all in current year) and take whichever results in less tax. You usually don't need to actually file amended returns for prior years - instead, you include the calculation on your current year return showing the tax that would have been owed if the payments were received in their proper years. This approach can definitely save money if the backpay would have been taxed at lower rates in prior years, but given the complexity with the subrogation issue, I'd strongly recommend working with a CPA who specializes in disability taxation to ensure you're handling both provisions correctly.

For finding CPAs who specialize in disability taxation, I'd recommend a few approaches: 1. Contact the National Association of Social Security Disability Advocates (NOSSCR) - they often have referrals for tax professionals who work frequently with disability cases. 2. Look for CPAs who are Enrolled Agents (EAs) with the IRS, as they tend to handle more complex tax situations and are more likely to be familiar with disability-related tax issues. 3. When calling tax preparers, specifically ask about their experience with: - SSDI lump sum elections under Section 86(e) - Subrogation payment deductions under Section 1341 - The interaction between these two provisions 4. Consider reaching out to disability law firms in your area - they often work with CPAs who specialize in the tax aspects of disability settlements and may be able to provide referrals. 5. The American Institute of CPAs (AICPA) has a "Find a CPA" tool where you can search for professionals with specific expertise areas. Given the potential tax savings involved (especially with a $105k lump sum), it's definitely worth investing in professional help. The consultation fee will likely pay for itself if they can properly navigate both the lump sum election and subrogation deduction to minimize your overall tax liability. Make sure whoever you choose has specific experience with both provisions, not just general disability tax knowledge.

I've been through this exact scenario with multiple PTP investments over the years, and you're definitely not alone in this frustration! The good news is that receiving K-1s after filing is extremely common with PTPs, and the IRS is generally understanding about this timing issue. For your Section 751 statement, you'll need to file Form 1040-X to amend your return. The key information should be on the transaction schedule that came with your K-1 - look for any amounts labeled as "Section 751(a) ordinary income" or similar language about "hot assets." A few practical tips from my experience: - Don't stress about penalties - if you file the amendment within a reasonable time after receiving the K-1, you're usually fine - The Section 751 statement itself is just a simple document showing the breakdown between ordinary income and capital gain portions of your sale - Keep copies of everything, including the date you received the K-1, in case you need to explain the timing later Since you mentioned the profit wasn't huge, the actual tax impact might be smaller than you're worried about. The main thing is getting it reported correctly. Consider this a learning experience for future PTP investments - now you know to expect these complications!

I went through this exact nightmare with Energy Transfer (ET) two years ago! The Section 751 reporting requirements caught me completely off guard too. Here's what I learned that might help you: First, don't panic about the timing - late K-1s are incredibly common with PTPs, and the IRS knows this. You're actually in good company since most PTP investors end up filing amendments. For your Section 751 statement, look at your K-1's transaction schedule for any line items showing "ordinary income under Section 751" or similar language about unrealized receivables. That's the amount that gets treated as ordinary income instead of capital gains when you sold your MMP position. The process is pretty straightforward once you know what to do: 1. File Form 1040-X (amended return) 2. Create a simple Section 751 statement showing the breakdown 3. Report the ordinary income portion on Form 4797 4. Report the remaining capital gain on Schedule D Since you only held for 3 months and the profit wasn't huge, the actual tax difference might be minimal. The important thing is getting it reported correctly. I'd recommend just biting the bullet and filing the amendment ASAP - better to deal with it now than worry about it later. Also, lesson learned for future reference: if you're thinking about investing in any more PTPs, maybe wait until after tax season to buy them, or at least be prepared for this complexity!