I've been through this exact situation and can share some hard-learned lessons! When my husband and I were in different states (me in Florida, him in Pennsylvania), I made several mistakes that cost us both time and money. The biggest issue I encountered was not keeping detailed enough records of my move date and income sources. Make sure you document EXACTLY when you moved to Arizona and started earning income there. The states are very particular about this - even a few days difference in your residency period can affect your tax allocation. One thing that really caught me off guard was how Colorado handles retirement account distributions. If you have any 401k withdrawals, pension income, or IRA distributions, Colorado has specific rules about how to allocate those between your resident and non-resident periods. Arizona handles these differently, so you really need to understand both states' approaches. Another gotcha: don't forget about any Colorado state tax refund you might have received in 2023. If you got a Colorado refund for 2022 taxes after you moved to Arizona, that refund might be taxable income in Arizona! Most people miss this completely. My advice would be to gather ALL your documents first, create a detailed timeline of your move, and then decide whether to tackle it yourself with specialized software or hire a professional. The complexity really depends on how many different income sources you have and whether you have any Colorado-specific deductions or credits that need to be allocated. Good luck with your filing!

I've been helping people with multi-state tax situations for years, and your Colorado/Arizona split residency case is definitely manageable once you understand the key principles. Here's what you need to focus on: **Documentation is critical:** Keep records of your exact move date, first day of work in Arizona, and any income earned in each state. Both states will want to see clear evidence of when you became/stopped being a resident. **Income allocation basics:** Each state typically wants income earned while you were a resident, plus any state-source income. For joint investment income with your wife, you'll generally allocate based on your residency period (so if you lived in Colorado for 7 months, roughly 58% of joint investment income goes to Colorado). **Watch out for these common mistakes:** - Not claiming credit for taxes paid to the other state (prevents double taxation) - Missing state-specific deductions that only apply during your resident period - Incorrectly handling moving expenses or job-related costs **Software reality:** Most consumer tax software really struggles with this. You'll either need specialized software, separate filing sessions for each state, or professional help. Given the complexity and potential for costly errors, I'd honestly recommend getting professional help for your first year in this situation. A CPA who specializes in multi-state taxation will typically save you more than their fee through proper allocations and credits you might miss. Once you have a template from the first year, subsequent years become much more straightforward!

Don't forget you'll need to file Form 4562 for depreciation and amortization. If you're using software like TurboTax or HR Block they'll walk you through it, but if you're doing it yourself make sure you include this form.

Great discussion here! One thing I'd add is that for the documentation piece, you might want to consider using your Apple Watch's own data to support your business use claim. The Activity and Screen Time features can show when you're actively using business apps vs personal ones. Also, if you're using it for client meetings and calls, your calendar integration and call logs can provide solid evidence of business use patterns. This kind of built-in data tracking might be more defensible than manual logs if you ever face an audit. Just make sure to screenshot or export this data regularly since it doesn't store indefinitely. Having multiple forms of documentation (usage logs, calendar data, business app activity) creates a stronger case for your claimed percentage.

I'm also dealing with a CP05A letter right now and this thread has been absolutely invaluable! I received mine about 4 weeks ago after filing in February and going through the identity verification process. My transcript shows the same pattern everyone is describing - 570 code followed by multiple 971 codes. What's been most helpful from reading everyone's experiences is understanding that this is unfortunately a common issue right now, not something unique to my situation. I was starting to panic thinking I'd made some major error on my return! The inconsistent information from different IRS agents seems to be universal - I've gotten three different explanations for my delay as well. I'm definitely implementing the strategies shared here: keeping detailed call logs, calling early morning (8-9 AM seems to be the sweet spot), requesting to speak with a Tax Examining Technician specifically, and asking for case notes to be read aloud. I'm also going to reorganize my documentation with a detailed spreadsheet matching each receipt to specific expense lines before sending my response. The waiting is incredibly stressful, especially when you're trying to manage business cash flow, but it's reassuring to see that persistence and the right approach do eventually lead to resolution. Thank you all for sharing your experiences and creating such a supportive community around this frustrating process!

I'm currently going through my first CP05A experience and this thread has been absolutely incredible for understanding what I'm dealing with! I received my letter about 2 weeks ago after filing in early February. Like everyone else, my transcript shows the 570 code with 971 codes following it. What's been most overwhelming is not knowing what to expect or how long this might take. Reading all of your detailed experiences has given me such a clearer picture of the process and concrete steps I can take. I had no idea I could request case notes, ask for Tax Examining Technicians specifically, or that timing my calls for early morning might make a difference. I'm a freelance graphic designer and this delayed refund is definitely impacting my ability to upgrade some essential software and equipment I need for client projects. The uncertainty around timing makes it really hard to plan business expenses. Based on all the great advice here, I'm planning to call tomorrow morning around 8:30 AM and try some of these strategies. I'm also going to reorganize all my documentation with a detailed spreadsheet before sending anything else to them. The tip about including a point-by-point cover letter explaining each document is something I definitely missed in my initial response. Thank you all for being so generous with sharing your experiences and strategies. It's made this stressful situation feel much more manageable knowing there are specific actions I can take rather than just waiting helplessly!

Has anyone actually been audited over donation timing like this? I'm wondering how strict the IRS really is about this December/January thing. They can't possibly check every donation date, right?

I work in tax preparation and see this exact scenario all the time. The consensus here is correct - for ACH transfers initiated on December 31st, what matters is whether you could cancel the transaction after submitting it. Most banks don't allow you to cancel ACH transfers once they're submitted, which means you "made" the donation in 2024 even though it processed in January. However, I'd recommend keeping documentation of both the initiation date (December 31) AND the processing date (January) in case you're ever questioned. Bank screenshots showing the pending transaction on December 31st would be ideal proof that you surrendered control of the funds in 2024. For your $2,300 in donations, this documentation becomes especially important since it's a significant amount. The IRS does spot-check charitable deductions, and having clear proof of timing will save you headaches if they ever ask questions.

Thanks for sharing your audit experience! This is really helpful for those of us in similar situations. Just to clarify - when you say you kept records showing both spouses used it as primary residence, what specific documentation did the IRS want to see during the audit? I'm asking because my husband owned our home for 8 years before we married, and we've been living there together for 3 years since. I want to make sure I'm keeping the right paperwork in case we get audited when we eventually sell. Did they ask for things like utility bills in both names, voter registration, or something more specific?

This is such a common situation and it sounds like you're on the right track! I went through something very similar when my wife and I sold our home last year. She had owned it for 6 years before we got married, and we lived there together for 4 years after marriage before selling. The key thing to remember is that for married couples filing jointly, the IRS allows you to combine your ownership and use periods. Since your husband owned and used the home for 10+ years before marriage, and you've both lived there for 2+ years since marriage, you easily meet both the ownership test (at least one spouse owned for 2+ years) and the use test (both spouses used as primary residence for 2+ years). Being added to the deed through your trust doesn't reset anything - the IRS counts ownership from your husband's original purchase date. We qualified for the full $500,000 exclusion without any issues. Just make sure you have good documentation of both of you living there as your primary residence during those 2 years post-marriage, in case you ever need to prove it later.