Congrats ur almost there! EIC gang we outchea getting paid 💅

Code 571 means they lifted any previous hold on your return, and 846 is definitely your refund release date! February 14th should be when it hits your account (or within 1-2 business days). The transcript is way more reliable than WMR - I've seen people get their money while WMR still shows "processing" for weeks. You're in the home stretch! 🎉

Just wanted to add one important thing - if your dependent kid has any investment income (like a custodial account or savings interest), the rules get more complicated. If they have both earned income (W2) AND investment income over $1,150, you might have to deal with the "kiddie tax" where some of their investment income is taxed at YOUR tax rate.

If your daughter is in college, don't forget to look into education credits when you file your taxes! Even though her W2 goes on her return, you can claim the American Opportunity Credit or Lifetime Learning Credit on YOUR return if you're claiming her as a dependent and paying her tuition. That's worth up to $2,500 depending on your situation!

Has anyone used both TurboTax and H&R Block software to check how they handle this specific situation? I tried calculating this in TurboTax and it seemed to reduce my SEP contribution limit by my K1 losses, which sounds wrong based on what everyone is saying here.

Just wanted to add some real-world validation to this thread. I'm a CPA and see this exact situation frequently with clients who have multiple business entities. The advice given here is correct - your K1 partnership loss does NOT reduce your Schedule C income for SEP IRA contribution purposes. The key distinction is that SEP IRAs are employer-sponsored retirement plans, even when you're self-employed. Your sole proprietorship acts as both employer and employee, allowing you to make contributions based on that specific business's net earnings. The partnership is a separate legal entity that would need its own retirement plan structure. I always tell clients to think of each business entity as having its own "retirement bucket." Your Schedule C business has one bucket, your partnership has another (which typically can't contribute to your individual SEP anyway), and any W-2 employment would have yet another bucket. So yes, use the full $12,400 from your sole proprietorship as your SEP contribution basis. Just remember the actual contribution limit is slightly less than 20% due to the self-employment tax adjustment - closer to 18.587% of your net Schedule C profit.

I went through this exact same situation last year with my rental property HVAC replacement! The 27.5 year depreciation schedule definitely feels disconnected from reality when you know these systems typically last 12-15 years. What helped me was understanding that you have options when the old system is removed. You can elect to "dispose" of the remaining undepreciated basis of the old HVAC system, which allows you to deduct that remaining value in the year of replacement rather than continuing to depreciate something that no longer exists. For your $9,800 replacement, make sure you keep detailed records of the removal and installation. The IRS requires documentation that the old system was actually removed/disposed of to claim the remaining depreciation as a loss. Also, consider whether any portion of the work might qualify as repairs under the safe harbor election for small taxpayers (if your average annual gross receipts are $27M or less). Things like ductwork cleaning or minor component replacements might be immediately deductible rather than depreciable. The key is proper documentation and potentially working with a tax professional who understands rental property depreciation rules. The initial investment in good advice can save you thousands over the depreciation period.

Just wanted to share my experience since I dealt with this exact situation last month. I also inherited a rental property with an aging HVAC system that needed replacement. The most important thing I learned is that you absolutely want to make the partial disposition election for the old system when you replace it. This lets you write off whatever depreciation is left on the old HVAC immediately instead of continuing to depreciate a system that's sitting in a landfill somewhere. For your situation with a system installed around 2012, you'll likely have a decent amount of undepreciated basis left that you can deduct. My tax preparer calculated that I saved about $1,800 in taxes the first year just from properly handling the disposal of the old system. One tip that saved me money: ask your HVAC contractor to break out the removal/disposal costs separately on their invoice. Those costs can often be deducted immediately rather than added to the depreciable basis of the new system. The 27.5 year schedule is definitely frustrating given real-world equipment lifespans, but at least the partial disposition rules help make it more reasonable when you have to replace things early. Document everything and definitely consider getting professional help for this one - the tax savings usually justify the cost of good advice.

Has anyone tried handling this through tax software? I had a similar 1099-R situation last year and TurboTax kept wanting to tax the distribution even though it shouldn't have been taxable.

I went through almost the exact same situation last year with a 1099-R Code E from my 401k plan. The IRS sent me a notice saying I owed taxes on what was clearly a return of my after-tax contributions. What worked for me was calling my 401k plan administrator first to get written documentation that these were indeed excess after-tax contributions being returned. They provided a letter explaining the distribution and confirming that Box 5 represented my cost basis (money I'd already paid taxes on). I then sent this documentation to the IRS along with a letter explaining that this was a non-taxable return of basis. The key is being very clear that Box 1 and Box 5 being equal means the entire amount represents already-taxed contributions. It took about 8 weeks, but the IRS eventually agreed and removed the tax liability. Don't panic - this is definitely a common misunderstanding on their automated system's part. Just make sure you have good documentation from your plan administrator to back up your position.