This is a great question that trips up a lot of people! The SALT deduction cap is one of the most confusing parts of the current tax code. Just to add some context to the excellent explanations already given - the reason you're seeing such a dramatic difference between 2024 and 2025 is likely because: 1. You mentioned buying a house in late 2024, so 2025 is your first full year of property tax payments 2. Property taxes can easily be $15k-25k+ annually depending on your location and home value 3. Combined with state income taxes, this quickly pushes you over the $10k cap One thing to keep in mind is that this SALT cap is currently set to expire after 2025, so it may not be a permanent limitation. However, nothing is guaranteed until Congress acts. Also, make sure you're not double-counting any property taxes that might have been prorated at closing - those should only be deducted once, in the year you actually paid them to the tax authority (not necessarily when they were due).

One thing that might help clarify the SALT situation is understanding that the $10,000 cap is per tax return, not per person. So if you're single, you get $10,000. If you're married filing jointly, you still only get $10,000 total (not $10,000 each). This is why some married couples consider filing separately - each spouse could potentially claim up to $10,000 in SALT deductions on their separate returns. Also, since you mentioned using FreeTax USA, make sure you're looking at the right forms. Your total SALT taxes paid will show up on the detailed worksheets, but only up to $10,000 will actually flow through to your Schedule A as a deduction. The software should clearly show both numbers - what you paid versus what you can deduct. Given that you bought a house in late 2024, you're probably going to be dealing with this cap for the foreseeable future. It might be worth tracking your quarterly estimated state tax payments and property tax payments throughout the year so you can plan ahead for next year's filing.

I'm going through this exact same situation right now! Filed my Form 2553 about 8 weeks ago and haven't heard anything back yet. My tax preparer keeps asking me about the status because we need to know how to handle my quarterly payments. Based on what everyone's saying here, it sounds like I'm still within the normal timeframe, but the uncertainty is really stressful when you're trying to make important financial decisions. I think I'm going to try calling the IRS using that Claimyr service that @Jamal Anderson and @QuantumQuest mentioned - sitting on hold for hours just isn't feasible with my work schedule. Has anyone else had experience with their accountant or tax preparer during this waiting period? I'm wondering if there's a standard way CPAs handle the interim period before the CP261 Notice arrives.

I just wanted to share my recent experience since I was in almost the exact same situation as you! Filed my Form 2553 in early February and was getting really anxious around the 8-week mark because my business banker was asking for confirmation of my S corp status for a credit line application. I ended up calling the IRS directly (took about 3 hours of waiting, but I got through eventually). The representative was actually very helpful - she confirmed that my Form 2553 had been processed and approved, gave me the effective date (which matched what I had requested), and mentioned that the CP261 Notice had been mailed out just a few days prior. Sure enough, the notice arrived about a week later. One thing the IRS agent mentioned that might be helpful for your situation with estimated taxes - she said that as long as you filed Form 2553 in good faith and within the proper timeframe, you can generally proceed with S corp tax treatment even before receiving the official confirmation, as long as you're prepared to make adjustments if anything unexpected comes up. Obviously check with your accountant about this, but it gave me peace of mind to know that the IRS recognizes there's often a gap between filing and receiving confirmation. Hope this helps ease some of your anxiety!

I know exactly how you're feeling - that "Notice issued" status can be really nerve-wracking when you're already waiting months for your refund! The good news is that it typically just means the IRS is sending you paperwork about your return, not that there's anything seriously wrong. Since you mentioned claiming EIC, this is super common - they do extra reviews on those claims every year. I went through something similar last tax season and it turned out to be just a simple verification request. The notice will usually arrive within 5-10 business days and will tell you exactly what they need. Try not to stress too much until you see what it actually says - most of the time these notices are way more routine than we initially fear they'll be!

I totally understand the panic when you see "Notice issued" - I had the same reaction when it showed up on my transcript last year! The good news is that 99% of the time it's nothing to lose sleep over. Since you mentioned claiming EIC, this is actually super routine - the IRS does additional verification on those claims as a standard practice. In my case, it turned out to be a CP12 notice for a small math correction that actually increased my refund by $8! The notice should arrive in your mailbox within the next week or so and will spell out exactly what's happening. Until then, try to stay calm - "Notice issued" just means your return is actively being processed rather than sitting in limbo, which is actually progress! Keep us updated when you get the notice! 🤞

17 Does anyone know if the FreeTaxUSA Deluxe package includes state filing too? Or do you have to pay extra for state returns even with Deluxe? TurboTax always gets me with those extra fees!

I switched from TurboTax to FreeTaxUSA last year and can share my experience with their audit protection. The $7.99 Deluxe package does include "Audit Assist" but it's important to understand what you're getting - it's more like having a knowledgeable guide rather than someone who will handle everything for you. When I got a notice from the IRS about a discrepancy (turned out to be their error), FreeTaxUSA's support walked me through exactly what documents to gather and how to respond. They provided templates and reviewed my response letter before I sent it. While they don't represent you directly to the IRS, their guidance was thorough and gave me confidence in handling the situation. The key difference from TurboTax's audit defense is that you're still doing the legwork - but honestly, for most audit situations, that's perfectly adequate. Plus at $8 vs TurboTax's much higher fees, it's hard to beat the value. Just make sure you understand you'll be the one communicating with the IRS, not FreeTaxUSA.

This message means the IRS has approved your refund but there's a debt that needs to be paid first - could be child support, state taxes, student loans, or other federal debts. The Bureau of Fiscal Service will automatically deduct what you owe from your refund and send you the remainder (if any). You'll receive a notice in the mail explaining exactly what was taken and the contact info for the agency you owed. The "Where's My Refund" tool will update with your final refund amount after the offset is processed. If you're not sure what debt this could be, you can call the Treasury Offset Program at 1-800-304-3107 to find out which agency is claiming the debt.

Just went through this exact same thing last month! The message means your refund is approved but they're going to take money out for a debt before sending you what's left. In my case it was an old student loan default I forgot about. The Bureau of Fiscal Service handles all the offsets and they'll mail you a detailed notice within a few weeks explaining exactly what was taken and how much. Don't stress too much - you'll still get whatever's left after they deduct the debt. The "Where's My Refund" tool will update with your final amount once everything is processed. If you need to know what the debt is right away, definitely call that Treasury Offset Program number someone mentioned above.