I used to report all my equipment rental income on Schedule E alongside my real estate rentals because they seemed similar conceptually - both are "renting" something out. Big mistake! The IRS audited me and explained that since I was actively advertising my equipment, handling maintenance, and coordinating with renters, it was an active business that belonged on Schedule C. They reclassified everything and I ended up owing back taxes plus penalties. So my advice: really analyze how involved you are in the equipment rental. If you're doing more than just collecting checks, Schedule C is probably safer. Also, document EVERYTHING about your involvement level in case you ever need to justify your position.

Has anyone considered the self-employment tax implications here? If you put the equipment rental on Schedule C, you'll pay an additional 15.3% SE tax on the net income, which you wouldn't pay if it's on Schedule E. This made a HUGE difference in my situation - I had about $20k in equipment rental income, and putting it on Schedule C vs E was about a $3k difference just in SE tax! Something to consider if you're right on the edge between active and passive involvement.

I called Credit Karma and asked about IRS deposits specifically. The rep told me they do batch processing 3 times a day (early morning, noon, and evening) for government deposits. So depending on when the IRS sent it and when CK processes their next batch, it can add 1-2 days of delay.

I'm dealing with the exact same issue! Filed 2/8, accepted same day, DDD of 3/18 to Credit Karma and still nothing as of this morning. It's so frustrating because you'd think direct deposit would be instant in 2025. Reading through these comments it sounds like CK is consistently 2-5 days behind which is annoying but at least gives me hope it's coming. Going to check my transcript tonight to make sure there aren't any issues on the IRS side. Thanks for posting this - at least I know I'm not alone!

I just want to add that the vehicle reimbursement needs to be reasonable. I got audited last year because I reimbursed myself at $1.25 per mile (thought I could include vehicle maintenance costs separately). The auditor said the IRS standard mileage rate already includes maintenance, fuel, depreciation, etc. Had to amend my returns and pay penalties!

This thread has been incredibly helpful! I'm in a similar situation with an S Corp and have been getting conflicting advice about mileage deductions. One thing I want to add for anyone setting up an accountable plan - make sure you're also documenting the business purpose of each trip, not just the miles. The IRS requires substantiation of the business connection for any reimbursement to qualify under an accountable plan. I keep a simple log with: date, starting location, destination, business purpose, and total miles. For example: "3/15/24 - Office to ABC Client meeting - Discuss Q1 contract renewal - 47 miles." This level of detail has saved me during previous audits. Also, don't forget that if you use your vehicle for both business and personal use, you can only claim the business portion. The IRS is very strict about this, so accurate record-keeping is essential. For those asking about apps, I've had good success with MileIQ and Everlance - both automatically track your trips using GPS and let you categorize them as business or personal with a simple swipe.

Has anyone had issues with FreeTaxUSA calculating the education credit incorrectly? I entered my 1098-T information exactly as it appears on the form, but the credit amount seems way off compared to what I got last year with TurboTax.

For anyone still struggling to find the education section in FreeTaxUSA, here's another approach that worked for me: Go to the main navigation and look for "Deductions & Credits" then scroll down to find "Education" or "Credits for Learning." Also, don't worry about the small amount on your 1098-T! Even a $95 tuition payment can qualify you for education credits. The Lifetime Learning Credit allows up to $2,000 in qualified expenses and gives you 20% back, so you could potentially get around $19 back from that $95. It's definitely worth including. One more tip - make sure you have your AGI (Adjusted Gross Income) handy because education credits have income limits, but for most people with small tuition amounts like this, you'll likely qualify.

22 Can someone explain what happens with the depreciation you've taken when you sell at a loss? I know if you sell at a gain, there's depreciation recapture, but what if you're already taking a loss?

This is a really comprehensive discussion about converted rental properties! I'm dealing with a similar situation where I converted my primary residence to a rental in 2021. One thing I'd add is that you should also keep detailed records of any improvements you made to the property both before and after conversion. Capital improvements made while it was your primary residence get added to your original basis, while improvements made after conversion to rental property are treated differently - they create separate depreciable assets with their own recovery periods. This can actually help reduce your taxable loss or increase your deductible loss depending on the timing. Also, don't forget about the home office deduction if you used part of your primary residence for business before converting it - that creates yet another layer of complexity in the basis calculations. I learned this the hard way when preparing my taxes last year!