This is exactly why divorce and taxes get so complicated! Your friends' accountant is being smart about timing. Here's the key issue: while married filing jointly, they can exclude up to $500k in capital gains from their primary residence. But once divorced, they each get their own $250k exclusion. The tricky part is the "use test" - both spouses need to have used the home as their primary residence for 2 of the last 5 years before the sale. If one moves out during divorce proceedings and they sell while still married, they might lose the full $500k exclusion if the moved-out spouse doesn't meet the use test. By waiting until after divorce and having proper language in the divorce decree (as others mentioned), they can ensure both qualify for their individual $250k exclusions. With $450k in gains, this covers them completely. Also consider: if their income drops after divorce (filing separately vs jointly), they might have better options for using those rental property losses. The passive activity loss rules at higher income levels can be brutal.

Another angle to consider - if they're selling multiple properties in the same year, they might want to look into a 1031 exchange for the rental properties instead of taking the losses all at once. Even though they're divorcing, they could potentially defer the capital gains on the rentals by exchanging into new investment properties. This could simplify the tax planning around the primary residence sale since they wouldn't be trying to coordinate the rental losses with the home sale timing. Plus, if one spouse wants to stay in real estate investing post-divorce, the 1031 could set them up better for the future. Of course, 1031 exchanges have their own complexity and strict timing requirements, but it might be worth discussing with their accountant as an alternative strategy. The key would be making sure the exchange is completed before the divorce is finalized so they can act as a unified entity for the exchange process.

This is such a helpful thread! I'm in a similar situation - I work as a nurse at a hospital (W-2) and then do private duty nursing (1099) at patients' homes. I've been driving between these locations for two years but never claimed the mileage because I wasn't sure if it was legitimate. Based on everything discussed here, it sounds like those miles between my hospital job and the private duty locations are definitely deductible on Schedule C. I'm kicking myself for missing out on thousands of dollars in deductions! Quick question though - if I sometimes go home between jobs to change clothes or grab equipment, does that break the "between work locations" rule? Or can I still deduct the total miles as long as the ultimate destination is another work location?

This thread has been incredibly helpful! I'm dealing with a similar situation but with a twist - I work remotely for my W-2 job (so technically my home is my work location for that), then drive to various client sites for my 1099 consulting work. Based on the discussion here, it sounds like the miles from my home office to client locations would be deductible since my home qualifies as my principal place of business for the W-2 work too. But I'm wondering if having TWO different types of work happening from the same home office complicates the deduction rules? Also wanted to say thanks to everyone who shared their experiences with the various tools and services. It's so frustrating when tax software gives you generic answers that don't account for these mixed employment situations. The detailed breakdown of what qualifies vs. what doesn't has been a real eye-opener!

im confused bout something - if im on a full-ride scholarship that pays tuition + housing + meal plan, do i need to report any of that as income??? cuz im also working part time on campus and using the 99 dependents thing!

Hey @GalacticGuru! Your employer giving you the "99 dependents" advice is unfortunately pretty common but not the correct approach. As others mentioned, you should use the "Exempt" checkbox on your W-4 instead if you qualify. Here's the key thing about your financial aid refund - you mentioned it was "substantial" which makes me think it might include money for living expenses beyond just tuition/fees. The IRS treats scholarship/grant money differently depending on what it covers: - Tuition, required fees, required books/supplies = NOT taxable - Room, board, personal expenses, transportation = IS taxable If your refund included money for housing or other living expenses, that portion would be taxable income and could affect your ability to claim exempt status. You'd need to add that taxable portion to your work income when determining if you'll owe taxes for the year. For FICA taxes on summer work - you're correct that students get an exemption, but only when working for the school where they're enrolled AND actively taking classes. Summer jobs at outside employers (like retail, restaurants, etc.) would still be subject to FICA taxes even if you're a student. I'd strongly recommend getting your specific situation reviewed since the combination of work income + potentially taxable financial aid could push you over the threshold where you'd actually owe taxes!

Just wanted to add my experience after reading through all these responses - I had the same upload errors for days and tried everything mentioned here. What finally worked for me was completely logging out of TurboTax, clearing all my browser data (not just cache, but cookies and stored data too), then logging back in. Apparently there was some corrupted session data that was causing the uploads to fail. After doing a fresh login, all my documents uploaded immediately without any errors. Might be worth trying this simple step before going the third-party route or waiting hours for support!

As an IRS employee, I want to clarify a few things about tax software issues that might be helpful. While I can't provide technical support for TurboTax specifically (since it's a third-party product), I can share some general guidance: 1. If you're having persistent technical issues with any tax software, you always have the option to file using Free File software available on IRS.gov, or file a paper return if needed. 2. The tax filing deadline can be extended if you file Form 4868, giving you until October 15th to file (though any taxes owed are still due by the original deadline). 3. When using any third-party tax preparation service or software, make sure to verify that all your information is accurately transferred. Double-check critical numbers like income amounts, withholdings, and deductions. 4. Be cautious about uploading sensitive documents to any online service - even legitimate ones. Always verify the security measures and data retention policies. The solutions others have shared here sound helpful for TurboTax-specific issues. Just remember that regardless of which software you use, you're ultimately responsible for the accuracy of your return. Keep copies of all your source documents for your records.

One critical aspect that hasn't been fully addressed is the impact on your Social Security benefits calculation. As a W-2 employee, your employer reports your wages to Social Security, which counts toward your future benefits. With K-1 income, you'll need to make sure your self-employment tax payments are properly credited to your Social Security record. I learned this the hard way when I discovered a gap in my earnings history after my first year as a partner. The IRS had processed my self-employment tax payments correctly, but there was a delay in how they were reflected in my Social Security statement. It's worth checking your Social Security earnings record annually (you can do this at ssa.gov) to ensure your self-employment income is being properly credited. Also, consider the timing of when partnership distributions occur versus when you owe taxes on the income. You might owe taxes on your share of partnership income even if the partnership hasn't distributed cash to you yet. This is called "phantom income" and can create cash flow challenges if you're not prepared for it. Make sure you understand your firm's distribution policy and how it aligns with your tax obligations. The partnership should provide you with estimated K-1 information early enough in the year to make accurate quarterly payments, but not all firms are great about this timing.

As someone who made this transition 5 years ago, I want to emphasize something that might get overlooked - the psychological adjustment to being "self-employed" for tax purposes. It's not just about the numbers, though those are crucial. The biggest mindset shift was realizing that I now had to think like a business owner when it came to taxes. Every expense became a potential deduction opportunity, but also a documentation responsibility. I started tracking mileage for client visits, keeping receipts for business meals, and maintaining detailed records of home office usage - things I never had to worry about as a W-2 employee. Also, don't underestimate the quarterly payment stress in your first year. Even with perfect calculations, there's something unsettling about writing large checks to the IRS every three months instead of having taxes automatically withheld. I recommend setting up automatic transfers to a dedicated tax savings account on the same day you receive distributions - treat it like a non-negotiable bill. One practical tip: ask your firm if they can provide monthly or quarterly income estimates rather than waiting until year-end for K-1 information. This makes quarterly payment calculations much more accurate and reduces the anxiety of guessing. The transition is absolutely doable, but it requires a more active approach to tax management than most people are used to. The upside is you'll understand your tax situation much better than you ever did as an employee!