I've been preparing taxes for 3 years now and completely agree with everyone steering you away from those expensive YouTube courses. They're just not worth it when there are so many legitimate, affordable alternatives. Here's my practical advice: Start with the IRS Annual Filing Season Program (AFSP) - it's free, comprehensive, and actually recognized by the IRS. Get your PTIN ($35.50), then invest in professional software. I use TaxAct Professional which runs about $400-500 for the basic package. My first year earnings were around $5,200 preparing 32 returns at an average of $125-175 each. I worked only evenings and weekends from late January through mid-April. The key was starting with friends and family, then building through referrals. One thing I learned the hard way: don't underestimate the time investment during tax season. Even working part-time, I was putting in 15-20 hours per week during peak season. But the seasonal nature is perfect for a side hustle - you can focus intensely for a few months then have the rest of the year free. Also, just focusing on tax returns without bookkeeping is totally viable. I've never offered bookkeeping services and have built a solid client base purely on tax preparation. Many clients actually prefer specialists who focus on one thing and do it well. Save yourself the $1,000+ and go with the proven, legitimate pathway through IRS resources.

I went through a very similar decision process last year and ended up saving myself a lot of money by avoiding those expensive YouTube courses. Here's what actually worked for me: I started with the IRS VITA program to get free training and real hands-on experience. After volunteering for a season, I felt confident enough to get my PTIN ($35.50) and take the Annual Filing Season Program course (also free). Total investment so far: under $40. For software, I went with TaxSlayer Pro at around $450 for the year. So my total startup costs were under $500 compared to the $1,350 you're considering. My first paid season (this past year), I prepared 38 returns and made $6,400. I charged $120-200 depending on complexity and only worked evenings and weekends. Most of my clients came through word of mouth after people heard about my VITA volunteer work. The best part about starting with VITA is you get supervised experience with real returns, so you learn to handle different situations safely. Plus, the training is always current with the latest tax law changes, unlike some of those course videos that might be outdated. Just focusing on tax prep without bookkeeping is completely fine - that's exactly what I do. The seasonal nature actually makes it perfect for a side hustle since you're not tied down year-round. My advice: skip the expensive courses and go the legitimate route through IRS resources. You'll save over $800 and get better, more current training.

Has anyone used TurboTax for reporting rental property sales? I'm in a similar situation and wondering if it handles depreciation recapture correctly or if I need to go to a professional.

One thing I haven't seen mentioned yet is the Net Investment Income Tax (NIIT). Since you're married filing jointly with income around $83k, adding the $255k capital gain will likely push you over the $250k threshold for NIIT. This means you'll owe an additional 3.8% tax on the investment income portion that exceeds the threshold. So in addition to the regular capital gains tax and depreciation recapture we've discussed, you'd be looking at roughly 3.8% on about $88k of the gain (the amount over $250k threshold), which is another $3,340 or so. Also, don't forget about state taxes if you're in a state that taxes capital gains. This can add significantly to your total tax bill depending on where you live. Make sure you're setting aside enough money - between federal capital gains, depreciation recapture, NIIT, and potential state taxes, you could be looking at a substantially higher tax bill than just the federal calculations alone.

Just want to add another consideration that came up when my family was dealing with this exact situation - the state you're in can make a huge difference in the tax implications. Some states don't have capital gains taxes, while others can add a significant burden on top of federal taxes. We're in California, and the state capital gains tax would have added another 13.3% to our tax bill if we had done the $1 sale route. That alone was enough to make the revocable trust approach even more attractive for us. Also, something I learned from our estate attorney is that the $1 sale can actually complicate things if your parents ever need to qualify for veterans benefits or other income-based programs later. Since they technically "sold" an asset for below market value, it can be viewed as an improper transfer for benefits purposes. The more I researched it, the more the $1 sale seemed like a solution that creates more problems than it solves, at least in our family's situation. The stepped-up basis at inheritance really is a powerful tax benefit that's hard to replicate with lifetime transfers.

After reading through all these responses, I'm really grateful for everyone sharing their experiences. This is clearly a much more complex situation than I initially realized, and the tax implications are significant. The consensus seems pretty clear that the $1 sale approach could end up costing us a lot more in taxes than we'd save, especially with the loss of stepped-up basis at inheritance. The examples people shared - like potentially owing capital gains on $365k or losing $120k in tax benefits - are eye-opening. I'm particularly interested in the revocable living trust option that a few people mentioned. It sounds like it gives us the control and flexibility we want while preserving the tax advantages. The idea that my parents could maintain full control during their lifetime but I'd still get the stepped-up basis benefit seems like the best of both worlds. I think our next step is going to be consulting with an estate planning attorney who can run the numbers for our specific situation and explain the trust option in more detail. Based on what everyone has shared, the upfront legal costs seem minimal compared to the potential tax savings. Thanks again for all the detailed responses - this community has been incredibly helpful in understanding what we're really looking at here.

I'm currently going through this exact same situation! I noticed the 970 code appeared on my transcript about 10 days ago with absolutely no other information, and like many of you, I immediately started panicking about what it meant for my refund. Reading through all of these experiences has been incredibly reassuring - it's clear that getting just the 970 code alone is much more common than I thought, and most people seem to get resolution within 3-4 weeks. I was especially helpful to see the variety of reasons people got the code (education credits, identity verification, random reviews, etc.) because it shows that it's usually routine verification rather than a serious problem. I've been guilty of checking my transcript way too often (sometimes multiple times per day!), but based on everyone's advice here, I'm going to limit myself to checking once a week and just wait for the letter to arrive. It sounds like that's really the key - waiting for the IRS to tell you specifically what they need rather than trying to guess from the codes. Thanks to everyone who shared their timelines and outcomes - it really helps reduce the anxiety of not knowing what's happening with your refund!

I just wanted to add my experience to this thread since I went through the exact same thing about 4 months ago. The 970 code appeared on my transcript all by itself, and I was convinced something was seriously wrong with my return. After about 3 weeks of checking my transcript daily (which I don't recommend - it just increases the anxiety!), I received a letter asking me to verify some information about the Child and Dependent Care Credit I had claimed. Turns out they just wanted to confirm my daycare provider's information and the amounts I paid. I was able to respond to their request entirely online through the IRS website, and my refund was released exactly 7 days later. The whole process from when the 970 code first appeared to getting my refund took about 5 weeks total. What I learned from the experience is that the 970 code by itself really is just the beginning of their review process - it doesn't mean there's necessarily anything wrong. The specific reason for the review usually becomes clear when you get that follow-up letter. Try to be patient (easier said than done, I know!) and don't let it stress you out too much. Based on everything I've read here and my own experience, the vast majority of these situations resolve smoothly once you provide whatever information they're looking for.

Your friend definitely needs to take responsibility here instead of blaming the broker. The 5500-EZ is a plan administrator duty, which for solo 401(k)s means the business owner (your friend) is responsible. Here's what your friend should do immediately: 1. Stop wasting time being angry at the broker 2. Determine exactly which years he missed filing (any year his plan assets exceeded $250k on Dec 31) 3. Use the IRS Delinquent Filer Voluntary Compliance Program (DFVCP) to self-report and get reduced penalties 4. File all missing 5500-EZ forms ASAP The voluntary compliance program can reduce penalties from $250/day (max $150k per form) down to as little as $750 per late form for solo plans. But this only works if he acts before the IRS discovers the missing filings. This is a pretty common mistake for people who don't realize the filing requirement kicks in automatically when assets hit the threshold. Better to fix it now than wait for IRS notices!

Your friend is completely off base blaming his broker. As a solo 401(k) owner, he IS the plan administrator and is 100% responsible for filing the 5500-EZ when his account balance exceeds $250k at year-end. This is basic retirement plan compliance - brokers manage investments, not tax filings. The fact that he's been avoiding this responsibility for multiple years makes it even worse. He needs to immediately use the IRS Delinquent Filer Voluntary Compliance Program to self-report before they catch him. The penalties can be astronomical - up to $250 per day per missed form, capped at $150k each. Tell your friend to stop playing the blame game and start taking action. Every day he delays makes this more expensive. The voluntary compliance program can reduce penalties to as little as $750 per late form, but only if he acts before the IRS finds the missing filings first.