One thing nobody's mentioned - make sure you have SOLID documentation for those expenses if they were from 2023 but you're claiming them in 2024. The IRS tends to flag mismatched years, especially with new businesses. Keep receipts, bank statements, credit card statements, and maybe even take photos of the equipment showing you still own and use it. Better safe than sorry!

Great question! I went through something similar with my photography business. The key thing to understand is that the IRS distinguishes between when you incur expenses and when your business actually begins operations. Since you didn't start generating income until 2024, that's when your business truly "began" for tax purposes. You can definitely claim those 2023 expenses on your 2024 return. For the equipment (mowers, trimmers, etc.), you'll likely want to look into Section 179 deduction which allows you to deduct the full cost of qualifying equipment in the year you place it in service for your business - which would be 2024 in your case. The utility trailer might be handled differently depending on its weight and use, but don't worry about losing those deductions. Just make sure you keep all your 2023 receipts and any documentation showing when you actually started operating the business in 2024. The IRS is pretty reasonable about startup situations like this as long as you have good records.

Has anyone dealt with Canadian RRSP accounts when making the first-year choice? I've heard there's a special form you need to file to avoid the US taxing these accounts as regular investment income.

I went through this exact same situation when I moved from Toronto to Austin in September 2024! The first-year choice election was definitely the way to go - it saved us thousands compared to filing as non-residents. A few things to keep in mind that I learned the hard way: Make sure you calculate the 31 consecutive days and 75% presence test carefully. Since you arrived in August, you should easily meet this. Also, don't forget that making this election means you'll be considered US residents from January 1, 2024 forward for tax purposes, so you'll need to report ALL worldwide income including your Canadian employment from early in the year. The foreign tax credit on Form 1116 will help offset the Canadian taxes you already paid, but gather all your Canadian tax documents (T4s, Notice of Assessment, etc.) because you'll need them. One tip: if you had any Canadian investment accounts (TFSAs, RRSPs, etc.), there are additional forms and elections to consider. The US-Canada tax treaty has some helpful provisions but you need to be proactive about making the right elections. Filing jointly with the full standard deduction made a huge difference for us compared to the non-resident alternative. Definitely worth consulting with someone who knows cross-border tax if you have a complex situation, but the first-year choice sounds perfect for your circumstances.

I got Notice 1462 about 5 weeks ago and I'm still in the waiting game too. From what I've gathered from this thread and my own research, it seems like the IRS is being extra cautious this year with fraud prevention, which is causing a lot of these delays. Mine was probably triggered because I had some side income from selling things online that I reported as miscellaneous income. The hardest part is the uncertainty - you never know if it'll be resolved in a few more weeks or drag on for months. I've been checking my transcript every Friday morning with my coffee, which has become a weird ritual at this point! One thing that's helped me mentally is remembering that the IRS isn't trying to keep our money - they're just overwhelmed and being super thorough. Hang in there everyone, we'll get through this eventually! 💪

I received Notice 1462 about 4 weeks ago and wanted to share my experience so far. Like many others here, I think mine was triggered by claiming the Child Tax Credit for my two kids. The notice itself is pretty vague - just says they need additional time to process my return and to allow 60 days for completion. I've been checking my transcript weekly (Sundays have become my check day!) and so far no changes. What's been most helpful is reading everyone's experiences here - it's reassuring to know this is happening to a lot of people and isn't necessarily a red flag. I called once after waiting 2.5 hours on hold, only to be told exactly what the notice said. Won't be doing that again! For anyone just getting their notice - try to stay patient, set up your IRS online account to check transcripts, and don't drive yourself crazy checking daily. This community has been a huge help for keeping me sane during the wait! 🙏

To all those having trouble reaching a human at IRS. I just ran across this video that gave me a shortcut to reach a human. Hope it helps! https://youtu.be/_kiP6q8DX5c

Hey Phillip! I've been seeing this same message for about 10 days now. From what I've gathered talking to others and doing some research, this is basically the IRS's standard "we got your return and we're working on it" message. It doesn't necessarily mean there's a problem - they just haven't finished processing it yet. The 21 day timeframe is more of a guideline than a guarantee, especially during busy filing season. If it's been longer than 21 days from when they received it, that's when you might want to call them directly. In the meantime, just keep checking WMR every few days for updates. Hope this helps ease some worry!

Great question! I went through this exact same situation when I started renting out a room in my condo. Your 12% calculation based on square footage is the right approach - that's the standard method the IRS expects. One thing I learned the hard way: make sure you're using the correct square footage. Only count livable space, not garages, unfinished basements, or storage areas. Also, if your tenant has access to common areas like the kitchen or living room, some tax professionals suggest you might be able to claim a slightly higher percentage, but definitely document your reasoning. For the utilities you split with your tenant - you'll want to be careful here. If they pay you directly for half the electric bill, don't include that as rental income. Just report the $12,500 rent and deduct your portion of the utilities. Since you mentioned the house is new, remember that you can't depreciate the land value, only the structure. Your property tax assessment should break this down, or you can use local assessment ratios (typically 80% structure, 20% land, but varies by location). One last tip: consider setting up a separate checking account for rental income and expenses. Makes tracking everything so much easier come tax time!

I'm dealing with a very similar situation - just started renting out a bedroom in my house this year! One thing that hasn't been mentioned yet is keeping detailed records of your tenant screening and advertising costs. Those are 100% deductible business expenses. Also, for the depreciation calculation that's confusing you - you'll need your home's purchase price minus the land value. If your closing documents don't break this down clearly, you can often find the land-to-building ratio on your county assessor's website or property tax records. Quick tip: Since you mentioned splitting electricity with your tenant, make sure you're tracking this consistently. I keep a simple spreadsheet each month showing the total bill, what my tenant pays me, and what I actually pay out of pocket. This makes the tax calculations much cleaner. The 12% calculation you're using sounds right for deductions, but remember that percentage will be crucial for depreciation too - you can only depreciate the rental portion of the home's value over 27.5 years. Good luck with your first year of rental income taxes!