I've been dealing with IRS transcript codes for years and can confirm that -$1,910.00 with code 291 is definitely money coming TO you! 🎉 The negative sign on IRS transcripts means it's a credit to your account - I know it's confusing because it's backwards from normal accounting. Code 291 "Reduced or removed prior tax assessed" means they reviewed your return (likely triggered by your October amended return) and found you were overcharged originally. The refund freeze from March has probably been holding things up, but once that releases you should see an 846 code appear on your transcript - that's the actual refund issuance code. Check every Friday morning for updates since that's when they typically post changes. Based on what others have shared here, expect 4-6 weeks from seeing 291 to getting 846, then 1-2 weeks for the money to hit your account. You're definitely getting that $1,910 - just need patience with IRS processing times! 💰

Just went through this same exact situation a few months ago and was totally panicking too! That -$1,910.00 with code 291 is actually AMAZING news for you! 🎉 The negative sign means it's money coming TO you, not something you owe. I know it seems completely backwards but that's just how the IRS does their accounting on transcripts. Code 291 "Reduced or removed prior tax assessed" basically means they reviewed your return (probably because of that amended return from October) and realized they overcharged you on taxes originally. So they're correcting it in your favor! The refund freeze from March is likely what's been holding everything up, but once that releases you should see an 846 code appear - that's the golden ticket that means they're actually cutting you a check. Based on everyone's experiences in this thread, I'd definitely recommend checking your transcript every Friday morning since that's when they typically post updates. From what I've seen, it usually takes about 4-6 weeks from seeing the 291 to getting the 846 refund code, then another 1-2 weeks for the money to actually hit your account. You're definitely getting that $1,910 - just gotta be patient with the IRS bureaucracy! The waiting is the hardest part but you're in good shape. Keep us posted when you see that 846 code! 💰

Check your tax transcript. Online. Might show what the original issue was. Could give you clues. Worth a look. Faster than waiting.

Ana, I understand your concern about receiving Notice 1462! As others have mentioned, this notice is essentially the IRS saying "we received your response and are working on it." Since you mentioned being recently retired, I'm curious - do you recall what the original notice was about? Given that you're dealing with new retirement income sources like pension and Social Security, the original issue might have been related to income reporting discrepancies. The good news is that Notice 1462 means they're actively reviewing your case, not that there's a new problem. Since you're so well-organized with your tax documents (love the color-coded folders!), you're already ahead of the game. I'd recommend checking your online IRS account or requesting a tax transcript as Kendrick suggested - this might give you more insight into what triggered the original notice. The waiting period can be nerve-wracking, but try not to stress. The IRS is just extremely backlogged right now. Keep doing what you're doing with your tax preparer, and you should be fine!

This thread has been absolutely invaluable! I'm currently in year 3 of renting out my former primary residence and have been dreading the eventual sale because I wasn't sure how all the tax implications would work out. Reading through everyone's experiences, I realize I may have made some mistakes early on - I don't think I've been claiming all the depreciation I should have, and now I'm learning I'll still owe recapture tax on the "allowable" amount even if I didn't claim it. That's a hard lesson! The point about the non-qualified use period calculations really hit home. I lived in my house for 12 years before converting to rental, so I should still qualify for at least a partial Section 121 exclusion when I sell. But I had no idea about having to allocate gains between qualified and non-qualified periods. I'm definitely going to look into some of the tools mentioned here like taxr.ai to help me figure out my exact situation, and probably bite the bullet on consulting with a tax professional. The potential tax savings from proper planning clearly outweigh the consultation costs. One question for the group - for those who did get professional appraisals at conversion, did you use the same appraiser you might use when selling, or is any licensed appraiser sufficient for IRS documentation purposes?

This is such a comprehensive discussion! I'm just getting started with researching this topic since I'm planning to relocate for work next year and convert my current home to a rental. One thing I'm curious about that I haven't seen mentioned - how do you handle the transition if you have an existing mortgage? Do you need to notify your lender when you convert from primary residence to rental property? I've heard some mortgages have occupancy requirements, but I'm not sure how strictly that's enforced or what the process is for converting. Also, for those who mentioned using property management companies, how did you factor the management fees into your decision? I'm trying to run the numbers on whether the rental income will be worth it after accounting for management fees, maintenance costs, and the eventual tax implications when I sell. The advice about getting a professional appraisal at conversion and consulting with both tax and legal professionals is definitely noted. This thread has made it clear that proper planning upfront can save a lot of headaches and money down the road!

FYI - Make sure you're aware of the pro-rata rule if you have existing Traditional IRA balances!! This seems to be missed often. If you have any pre-tax money in ANY traditional IRA (including SEP or SIMPLE IRAs), you can't just convert your new non-deductible contribution tax-free. It gets prorated across all your IRA balances.

Just to add some clarity from my experience - I was in a similar situation last year and successfully completed a 2024 backdoor Roth in early 2025. The key is understanding that you have two separate deadlines: 1) You can make your 2024 non-deductible traditional IRA contribution until April 15, 2025, and 2) The conversion can happen anytime after that (it will just be reported on your 2025 taxes). The Vanguard rep was mixing up the deadlines. While it's true that many people prefer to keep both steps in the same calendar year for simpler record-keeping, it's absolutely not required. You're still well within the window to make your 2024 contribution and then convert it. Just make sure to properly document everything on Form 8606 for both tax years. One tip: If you do have existing pre-tax IRA money, consider the reverse rollover strategy mentioned by others to avoid pro-rata complications. And yes, plan for that 7-day Vanguard holding period if you're using them!

Everyone's talking about the tax benefits of S Corps, but nobody mentioned the asset protection angle! As someone who got sued in my construction business, this matters. With an LLC, if you're a single-member, the courts in many states treat it as less separation between you and the business. With an S Corp, you have stronger liability protection in many jurisdictions because the corporate structure is more clearly defined and respected by courts. Also, for QBI purposes, remember that certain construction specialties may count as "specified service businesses" which phase out QBI benefits at higher income levels. Worth checking if your specific estimating work falls under that category!

Great thread everyone! I'm actually an enrolled agent who works with a lot of small construction businesses, and I wanted to add a few practical considerations that might help with your decision: First, timing matters for the S Corp election. If you decide to go this route, you generally need to file Form 2553 within 2 months and 15 days of the beginning of the tax year you want it to be effective. Miss this deadline and you're stuck waiting until the following year (unless you qualify for late election relief). Second, regarding the QBI deduction - construction estimating should definitely qualify as a non-specified service business, so you won't face the income limitations that hit lawyers, consultants, etc. The 20% QBI deduction will apply to your business profits regardless of whether you're an LLC or S Corp, though the calculation base differs slightly. For your projected $120k income, an S Corp could save you roughly $3,825 in self-employment taxes (assuming a $75k reasonable salary). However, factor in the additional compliance costs - payroll service ($1,200-2,000/year), additional accounting fees ($800-1,500), and potentially state filing fees. One often overlooked benefit: S Corps make it much easier to bring on partners or investors later if your business grows. LLCs can get messy with multiple owners from a tax perspective. My recommendation? Run the numbers with your CPA using your actual financials, not hypotheticals. Every situation is unique, and the "break-even" point varies based on your specific circumstances and state tax situation.