So glad to hear your tax prep company is stepping up and taking responsibility! That's actually a huge relief - having them document the error officially with the IRS will definitely help speed up the process. Most people don't realize that many legitimate tax preparation companies do carry errors and omissions insurance specifically for situations like this. Since they're filing the paperwork on your behalf, make sure you get a copy of everything they submit to the IRS, along with any reference numbers. This will be super helpful if you need to follow up or check on the status later. The fact that they have insurance and are being proactive about fixing their mistake is a really good sign that you'll get this resolved much faster than the typical 6-8 week timeframe for misdirected refunds. Keep us updated on how it goes - your experience might help others who run into similar issues!

This is such a stressful situation, but you're definitely not alone in dealing with this! I went through something similar a few years ago when my tax preparer accidentally used outdated bank info from my previous return. One thing that really helped me was getting a copy of my tax transcript from the IRS website (irs.gov) - it shows exactly where your refund was sent and the status. You can access it immediately online with your SSN and some basic verification info. This gave me concrete details to reference when I called both the IRS and my tax prep company. Also, while you're waiting for everything to get sorted out, consider asking your tax preparer if they offer any kind of emergency assistance or advance on the refund amount since it was their error. Some of the larger chains have policies for situations like this, especially when it's clearly their mistake. At minimum, they should be covering any fees you incur because of their error. The good news is that your sister and cousin are right - the money will eventually come back to you, it's just a matter of time. Banks are required to reject deposits when the account name doesn't match, so it will bounce back to the IRS who will then issue a paper check. Hang in there!

Don't forget to get a good appraisal to support your purchase price allocation! I made the mistake of not documenting this well when buying into a partnership and got hammered during an audit because the IRS claimed my allocation was unreasonable.

This thread has been incredibly helpful! I'm dealing with a similar situation where I'm buying into an established LLC taxed as a partnership. One thing I want to add is that timing matters a lot for the Section 754 election - it has to be made by the due date (including extensions) of the partnership's return for the tax year when the transfer occurs. Also, don't overlook the impact on your depreciation deductions if the partnership owns depreciable assets. With a 754 election and proper basis step-up, you might get additional depreciation deductions on your share of partnership assets, which can provide significant tax benefits over time. For anyone considering this, I'd strongly recommend running the numbers both ways (with and without the election) to see the long-term impact. The election is generally irrevocable once made, so you want to be sure it makes sense for your specific situation.

Ruby, I went through this exact same decision process with our school's choir booster club last year. While 501(c)(7) might seem like the easier path, it's definitely not the right fit for what you're doing. The key issue is that 501(c)(7) organizations are supposed to benefit their members primarily through social activities. But your booster club exists to support the band program - that's an educational purpose that benefits the broader community, not just your member families. The IRS would likely question this classification during review. Also, keep in mind that 501(c)(7) organizations have income limitations - if more than 35% of your gross receipts come from non-member sources (like concession sales to the general public), you could lose your exemption. With your fundraising activities, you'd probably exceed this threshold. Go with the 501(c)(3) route using Form 1023-EZ. At $20K annual revenue, you're well under the $50K threshold. The application fee is only $275, and honestly, the peace of mind knowing you have the correct status is worth it. Plus, donors can deduct their contributions to a 501(c)(3), which might help with your fundraising efforts. The process really isn't as scary as it seems - just make sure your bylaws clearly state your educational support purpose rather than social club language.

I've been following this conversation with great interest as our tennis booster club is facing the exact same dilemma. Ruby, I want to echo what others have said about avoiding the 501(c)(7) route - we almost made that mistake ourselves until our accountant warned us about the potential issues. One thing I haven't seen mentioned yet is the importance of having proper corporate structure in place BEFORE applying for tax exemption. Make sure you're incorporated as a nonprofit corporation in your state first, then apply for federal tax exemption. Many booster clubs operate as unincorporated associations, but the IRS generally prefers to see formal corporate structure for 501(c)(3) applications. Also, regarding the social events concern - don't worry about organizing family events! The IRS understands that educational support organizations often have social components. The key is that your PRIMARY purpose needs to be supporting the band's educational mission. Social activities can be secondary as long as they're not your main focus. I'd strongly recommend getting your documentation reviewed before submitting. After seeing all the positive feedback about taxr.ai in this thread, I'm definitely planning to use that service for our application. Better to catch any issues upfront than deal with rejection letters and delays later. Good luck with your application process! The fact that you're asking these questions now shows you're on the right track.

One important detail that hasn't been mentioned yet - if you're planning to quit sports betting "while you're ahead" as you mentioned, make sure you actually close out all your accounts and withdraw any remaining balances before December 31st if you want clean records for this tax year. I learned this the hard way when I had $75 sitting in a FanDuel account that I forgot about. Even though I didn't place any more bets, they sent me a 1099-MISC the following year for some promotional credits that got converted, which created a reporting headache. Also, since you mentioned this is taking up too much of your time, good for you for recognizing that early! The tax reporting aspect gets much more complicated as the amounts get larger, so keeping it simple with your $150 net is probably the smart move. Just make sure to report those gross winnings properly and you'll be all set.

Adding to all the great advice here - one thing that might help with the record-keeping burden is to set up a dedicated bank account or payment method just for gambling if you decide to continue in the future. I use a separate checking account that I only fund with my "entertainment budget" for betting. This makes it incredibly easy to track deposits, withdrawals, and calculate your true net position at year-end. Plus it helps with budgeting since you can only bet what you've specifically allocated for gambling. When tax time comes around, you just need to reconcile your account activity with your betting platform histories. For your current $150 situation though, definitely follow everyone's advice about downloading those complete transaction histories from your betting apps. The platforms make it pretty straightforward - usually under Account Settings or Transaction History. Better to have the documentation ready even if the actual tax impact ends up being minimal.

Has anyone used the "Schedule SE" worksheet in the tax software? I found it super helpful because it automatically calculates how much self-employment tax you owe taking into account your W-2 income. Saved me a ton of math!

This is exactly the kind of situation I went through last year! The key thing to remember is that self-employment tax is calculated on your net earnings from self-employment (after business expenses), and the Social Security portion does have that annual wage cap. For 2025, the Social Security wage base is $168,600. Since you're making $127,000 from your W-2 job, you have about $41,600 of "room" left before hitting the cap. This means only the first $41,600 of your self-employment earnings would be subject to the 12.4% Social Security portion of SE tax. However, ALL of your self-employment income will be subject to the 2.9% Medicare portion since there's no cap on Medicare taxes. Don't forget that you can deduct legitimate business expenses (computer equipment, software subscriptions, portion of home office, etc.) before calculating your SE tax. Also, you'll be able to deduct half of your self-employment tax as an adjustment to income, which helps reduce your overall tax burden. I'd definitely recommend making quarterly estimated payments if you haven't already - the underpayment penalties can be painful!