Looks like FreeTaxUSA is back up now! Just managed to login and continue my return. Maybe try again?

Glad to hear FreeTaxUSA is back online! For anyone still experiencing issues or looking for backup options, I'd recommend having a Plan B ready for next year. Server outages like this are pretty rare but they always seem to happen at the worst possible time (right before deadlines). One thing that's helped me is starting my tax prep earlier in the season - like February instead of April. Less server load, more time to troubleshoot issues, and you're not stressed about deadlines. Plus if you're getting a refund, you get your money faster! For those mentioning alternatives like TaxSlayer and TaxAct, they're solid choices. I've used both in the past and they handle most tax situations well. The main advantage of FreeTaxUSA is really that pricing for state returns - $15 vs $40+ elsewhere adds up if you file in multiple states.

Don't forget that your K-1 losses might push you into claiming a Net Operating Loss (NOL) if they're large enough to offset all your other income. The rules for NOLs changed after the TCJA - now you can only carry them forward, not back, and they're limited to 80% of taxable income in future years.

This is exactly the kind of confusion I had when I first started receiving K-1s! The key thing to understand is that partnership taxation operates on a "conduit" theory - the partnership itself doesn't pay taxes, so all income and losses flow through to the partners whether you receive cash distributions or not. Your K-1 losses are legitimate tax deductions, not some kind of accounting trick. The partnership actually incurred these losses through its business operations, and as a partner, you're allocated your proportionate share. This is fundamentally different from stock investments where you only recognize losses when you sell. To address your concern about "paying it back" - if the company becomes profitable in future years, you'll receive K-1s showing income rather than losses, which will increase your taxable income. But you won't have to "repay" the prior year loss deductions. Think of it like any other business - losses in one year offset income in profitable years. Just make sure you're tracking your basis properly, as others have mentioned, since you can only deduct losses up to your investment plus any retained earnings allocated to you over the years.

Smart move skipping the audit protection! I've been filing with basic itemized deductions for over a decade and have never been audited. The IRS is really looking for bigger fish - people with complex business structures, unusually high deductions relative to income, or missing income. Your mortgage interest, charitable donations, and medical expenses are all backed up by third-party documentation (1098 forms, receipts, medical bills), which is exactly what you'd need to provide if questioned anyway. The "protection" doesn't change your actual tax liability or prevent issues - it just gives you someone to call if problems arise. I'd echo what others said about good record-keeping being your best protection. I keep a simple tax folder throughout the year and toss everything in there as I get it. Takes 5 minutes and costs nothing, versus paying TurboTax's inflated fees for peace of mind you probably don't need.

I went through this exact same decision last year and ended up skipping the TurboTax audit protection. Best choice I made! Like others mentioned, with standard itemized deductions you're really not in the high-risk category that the IRS typically targets. What helped me feel confident was realizing that all my deductions already had built-in documentation - my mortgage company provides the 1098 form, my charitable donations are mostly to established organizations that issue proper receipts, and my medical expenses came with insurance statements and provider bills. If the IRS ever had questions, I'd just need to send copies of stuff I already have. The peace of mind from good organization ended up being way better than paying for "protection." I created a simple system where I scan important tax documents into a cloud folder as soon as I get them, and keep physical receipts in a labeled envelope. Takes maybe 10 minutes total throughout the year and costs nothing. Honestly, TurboTax's scary messaging about audits is mostly just marketing to get you to spend more money. For straightforward situations like yours, the protection is solving a problem that probably doesn't exist.

I'm dealing with a very similar situation right now - I've been on unpaid maternity leave for the past 8 months and was stressing about the same exact thing! Reading through all these responses has been so helpful and reassuring. It's clear from everyone's experiences that the IRS really doesn't flag returns based on occupation fields not matching income sources. The consistent advice from people who've actually been through this situation, plus the professional perspectives from the HR and tax prep folks, gives me confidence that listing our actual job titles is definitely the right approach. I think we sometimes forget how common these kinds of employment situations actually are - unpaid leave, sabbaticals, career transitions, seasonal work, etc. The tax system has to accommodate all these real-life complexities, which is why the occupation field is more informational than anything else. Thanks to everyone for sharing their experiences and expertise. I'm going to follow the consensus here and list my actual job title without any qualifiers. Time to stop overthinking this and focus on the parts of our returns that actually impact our tax liability!

I've been following this discussion closely because I'm in a nearly identical situation - I was on unpaid personal leave for 11 months last year due to caring for my elderly parents. The consistency of advice here from people who've actually been through this, plus the professional insights from HR and tax prep experts, has been incredibly reassuring. What really helped me understand this was the point someone made about how the IRS processes millions of returns where occupation doesn't perfectly match income sources. Students working part-time, retirees with occasional income, people between jobs, seasonal workers - these mismatches are incredibly common and the system is designed to handle them. I was initially worried about the same thing as the original poster, but after reading everyone's experiences, I'm confident that listing my actual job title is the right approach. The occupation field is clearly more about describing your profession in general rather than explaining your specific work status for that tax year. Thanks to everyone for sharing their stories and expertise - it's made what seemed like a complicated decision much clearer. For anyone else in similar situations reading this thread, the takeaway seems clear: list your actual occupation and focus your energy on accurately reporting whatever income you did receive during the year.

I'm dealing with this exact same situation right now and this thread has been incredibly enlightening! I sold my former primary residence that I converted to a rental in 2021, and like many of you, I qualify for the Section 121 exclusion but claimed depreciation during the rental period. What's really striking to me is how many people here have run into the same TurboTax issue - it seems like their software just isn't designed to handle these hybrid transactions properly. The consensus seems clear that you need both Form 8949 for the excluded capital gain AND Form 4797 for the depreciation recapture. I've been going back and forth with TurboTax support for weeks, and they keep insisting that Form 8949 alone is sufficient. But after reading everyone's experiences here, especially the explanations about "unrecaptured Section 1250 gain" being taxable regardless of the Section 121 exclusion, I'm convinced TurboTax is wrong. I think I'm going to try that taxr.ai analysis tool that several people recommended, and potentially switch to FreeTaxUSA if needed. The peace of mind of getting this right is worth way more than the hassle of switching software. Thanks to everyone who shared their experiences - it's so valuable to hear from people who've actually been through this process rather than just reading confusing IRS publications!

I'm a tax professional who specializes in real estate transactions, and I wanted to chime in here because this is indeed a complex area where even popular tax software can get it wrong. The consensus in this thread is absolutely correct - you need BOTH forms for a converted property sale like this. Here's the technical breakdown: **Form 8949** reports the capital gain portion of your sale, which qualifies for the Section 121 exclusion (up to $250K single/$500K married). This is the "personal residence" part of the transaction. **Form 4797** reports the depreciation recapture, which is treated as "unrecaptured Section 1250 gain" and is taxable at up to 25% regardless of your Section 121 exclusion eligibility. The key IRS regulation here is that Section 121 specifically excludes depreciation taken after May 6, 1997 from the capital gains exclusion. This means your $12,000 in claimed depreciation will be taxable even though your overall gain qualifies for exclusion. TurboTax's limitation in handling this split reporting is a known issue in our profession. The software tries to oversimplify what is essentially two different tax treatments for the same transaction. I've seen this exact scenario dozens of times, and the correct approach always requires both forms. If you're uncomfortable with the manual overrides needed in TurboTax, I'd recommend either consulting with a tax professional for this specific issue or switching to software that handles the split reporting correctly. The cost of getting professional help is usually much less than the potential penalties for incorrect reporting of depreciation recapture.