Has anyone here used TaxAct for partnership returns? Their software is cheaper than the bigger names but I'm not sure if it handles all the schedules properly.

Just wanted to share my experience since I was in a similar situation last year with a small LLC partnership. You're absolutely right that the IRS website can be confusing! The key thing that helped me was realizing that Form 1065 is basically a "package deal" - all those schedules (B-1, B-2, and the K-1s) are considered part of the main return and go to the same address. Think of it like sending a book with multiple chapters rather than separate documents. One tip that saved me stress: if you're getting close to the deadline, definitely consider e-filing instead of mailing. The confirmation is instant, and you don't have to worry about postal delays or whether the IRS actually received your package. Most basic tax software can handle a simple 50/50 partnership return like yours. Also, make sure you keep copies of everything for your records, especially those K-1s since you'll both need them for your personal tax returns. Good luck with the filing!

Does anyone know if excess deferrals affect my ability to contribute to an IRA? I'm close to the income limits for deductible contributions and wonder if correcting excess 401k deferrals changes my AGI calculation?

This is such a helpful thread! I'm dealing with a similar situation but with a twist - I changed jobs mid-year and my new employer's payroll system didn't account for contributions I'd already made at my previous job. By the time I realized what was happening, I was already over the limit by about $3,000. One thing I learned the hard way is that you need to be proactive about tracking this yourself when you have multiple employers in the same tax year. HR departments don't communicate with each other, so it's entirely on you to monitor your total contributions across all plans. I wish I had known about these tools mentioned earlier - would have saved me a lot of stress and paperwork! For anyone in a similar boat, definitely don't wait to address excess deferrals. The sooner you catch it and request the distribution, the better off you'll be come tax time.

I know everyone's talking about the tax deduction part but don't forget about the BUSINESS side of this decision! If you wait till 2025 to buy equipment, you're delaying your ability to create content NOW that could be building your audience. My fitness channel grew for almost a year before I made my first dollar from coaching. That pre-revenue content was crucial for establishing credibility. Sometimes the business investment makes sense even if the tax deduction timing isn't perfect!

Great question! I'm in a similar boat with my consulting side hustle. One thing to consider is setting up your business entity (LLC or sole proprietorship) now even if you're not actively coaching yet. This can help establish that "business start date" for tax purposes. Also, document EVERYTHING - your business plan, market research, content creation timeline, etc. The IRS loves to see that you have a genuine profit motive and aren't just trying to write off personal gym equipment. If you can show you're seriously preparing to launch a legitimate business, purchasing equipment in advance becomes much more defensible. I'd also suggest talking to a tax professional about whether it makes sense to elect Section 179 expensing vs. regular depreciation for your equipment purchases. Depending on your total income from all sources, one approach might be significantly better than the other.

Just want to add a small tip from my experience last year. When paper filing with Form 8839, make absolutely sure you sign and date the physical return! The #1 reason paper returns get delayed (according to the IRS agent I spoke with) is missing signatures. Sounds obvious but apparently happens all the time. Also, send it certified mail with tracking. The peace of mind is worth the extra few dollars, especially when you're counting on a big refund.

Update: Thanks everyone for the helpful advice! We ended up paper filing our return with Form 8839 and all the supporting documentation. We sent it certified mail as suggested and included a detailed cover letter explaining our situation. I'm still disappointed we couldn't e-File, but at least now I understand why. The IRS really should update their systems to handle these special forms electronically. Seems crazy that in 2025 we're still dealing with paper returns for something as common as adoption!

Ugh, these tax rules for students are so confusing! I had a similar issue with my postdoc "salary" which they insisted on calling a "fellowship" for some reason. Ended up having to refile taxes after getting bad advice. Whatever you do, make sure your roommate keeps documentation of everything in case there's an audit later.

This is such a helpful thread! I'm dealing with a similar situation as a new grad student. One thing I'd add is that your roommate should also check if her university has a tax office or financial aid office that can help clarify how her specific stipend should be classified. My school's financial aid office was actually really helpful in explaining which parts of my funding package counted as earned income vs. unearned income. They see this question all the time and often have examples of how similar stipends have been treated by the IRS in the past. Also, if she does end up needing to withdraw the excess contribution, make sure she requests to withdraw the "excess contribution plus earnings" specifically - the IRA provider will calculate exactly how much earnings are attributable to that excess amount. Don't just guess at the number or withdraw a round amount, because that could create additional tax complications. Good luck to your roommate! The fact that she's addressing this now instead of ignoring it shows she's being really responsible about fixing the situation.