Bit of a related question - has anyone successfully deducted home office expenses for their payment app income? I use a dedicated room in my apartment exclusively for the graphic design work that I get paid for through Venmo, but I'm not sure if it's worth the hassle or if it increases audit risk.

As someone who dealt with this exact situation last year, I want to emphasize something that might not be obvious - make sure you're distinguishing between gross receipts and actual taxable income when you report on Schedule C. For example, if you received $9,500 through payment apps but $1,200 of that was reimbursements from clients for materials you purchased for their projects, you'd only report $8,300 as gross receipts (assuming you're also deducting those material costs as business expenses). Also, don't forget about quarterly estimated tax payments for next year if your side gig income continues. Since payment apps don't withhold taxes like employers do, you might owe penalties if you end up owing more than $1,000 when you file. The IRS expects you to pay as you go, not just at year-end. One more tip: If you're using TurboTax, when you get to the Schedule C section, it will ask about your business code. For graphic design work, you'll want to use NAICS code 541430 (Graphic Design Services). This helps ensure your return is processed correctly and your deductions align with what the IRS expects for your type of business.

I'm going through almost the exact same thing right now! Filed my Form 5329 about 7 weeks ago for a missed RMD (also due to advisor issues - mine moved firms and the transition got messy). Got that same frustratingly vague acknowledgment letter that tells you absolutely nothing useful. Reading through all these responses is actually making me feel much better about the situation. It sounds like this is just how the IRS operates with Form 5329 submissions - they send the generic "we got it" letter first, then take their sweet time processing everything before sending any kind of final resolution. The timeline everyone's mentioning (8-12 weeks) seems pretty consistent across different people's experiences. I'm trying to be patient but it's hard when you're wondering if you're going to get hit with additional penalties or complications. At least I know I'm not the only one dealing with this kind of confusing communication from the IRS!

I've been following this thread closely because I'm dealing with a very similar situation - missed RMD due to a communication breakdown with my financial institution, filed Form 5329 with penalty payment about 5 weeks ago, and got that same maddeningly vague acknowledgment letter. What I'm finding really valuable here is seeing the consistent timeline everyone is reporting (8-12 weeks) and hearing that paying the penalty upfront along with an explanation letter generally leads to successful resolution. It's also reassuring to know that these generic acknowledgment letters are completely normal and don't indicate any problems with your submission. One thing I wanted to add for anyone else reading this - I learned that it's worth keeping detailed records of everything during this process. I'm maintaining a simple log with dates of when I submitted the form, when I received the acknowledgment letter, when my check was cashed, etc. If I do need to call the IRS later or if any issues arise, having all those details readily available will make the conversation much more productive. Thanks to everyone who shared their experiences here - it's really helping reduce the anxiety of waiting for the IRS to finish processing everything!

This thread has been incredibly informative! I'm a single parent dealing with my first child heading to college, and the whole 529/tax credit landscape is completely new to me. My daughter got accepted to UMass Lowell and they have a $340 orientation fee that's mandatory for all incoming freshmen. After reading through everyone's experiences, I'm leaning heavily toward using the orientation fee for the American Opportunity Tax Credit rather than a 529 withdrawal. The math really does seem clear - potentially getting $340 worth of tax credit value versus maybe $85-100 in tax savings from the 529 route. I have one question though that I didn't see addressed: as a single parent, my income fluctuates quite a bit year to year due to freelance work. Is there any risk in planning for the AOTC approach if I'm not 100% certain I'll qualify for the full credit? Should I have a backup plan in case my 2025 income ends up being higher than expected and phases out some of the credit? Also planning to call UMass Lowell tomorrow for that documentation letter - sounds like that's become the gold standard approach from this thread!

Great question! I just dealt with this exact situation last year when my son started at UMass Boston. Their orientation fee was $385 and I was similarly confused about whether it qualified for 529 withdrawals. After doing extensive research and calling both the university and my 529 plan administrator, I can confirm that mandatory orientation fees absolutely qualify as 529 expenses. The IRS considers them "required fees" as long as they're charged by an eligible educational institution and necessary for enrollment. However, after reading through all the excellent advice in this thread, I realize I probably should have used the fee toward the American Opportunity Tax Credit instead! The math that several people laid out is really compelling - getting close to full credit value back versus the modest tax savings from a 529 withdrawal. For your $375 UMass fee, I'd recommend following the strategy that Esteban, Maya, and others outlined: use it toward the AOTC if you qualify for the full credit, and save your 529 funds for room and board expenses where you can't get other tax benefits. Just make sure to get that documentation letter from UMass confirming the fee is mandatory - it makes everything much cleaner for tax filing. The timing advice from Chloe about taking withdrawals in the same calendar year is spot on too. Keep good records of when you pay versus when you take any 529 distributions!

I've been dealing with the same Drake Tax limitation for 1120-POL returns. After reading through all these suggestions, I'm leaning toward trying Tax 990 for the cost-effectiveness since I only have a few returns to file. The $65 per return pricing seems reasonable compared to investing in a full software suite. Has anyone compared the actual form completion time between Tax 990 and TaxAct Professional for 1120-POL? I'm curious if the simpler interface of Tax 990 might actually be faster for straightforward political organization returns, or if TaxAct's more robust features make it worth the extra cost for efficiency. Also wondering if any of these platforms handle the required disclosures for 527 organizations automatically, or if that's something we still need to track manually regardless of software choice.

I've been preparing 1120-POL returns for about 5 years now and wanted to add another perspective. While the software recommendations here are solid, don't overlook the importance of having good political organization expertise regardless of which platform you choose. One thing I've learned is that many of the compliance issues with 1120-POL returns aren't necessarily software problems - they're classification and reporting judgment calls that require understanding the nuances between political activities, exempt functions, and investment income. I've seen preparers get into trouble because they relied too heavily on software defaults without understanding the underlying requirements. That said, for your immediate need with just two returns, I'd echo the Tax 990 recommendation. The $65/return is reasonable and their customer support actually understands political organization issues, which isn't always the case with the broader tax software providers. Just make sure you're comfortable with the political/non-political expense segregation requirements before diving in, regardless of which software you choose.

Clear your browser cache and cookies. Fixed it for me!

I had this exact same issue last week! What finally worked for me was making sure I was using the EXACT refund amount from line 35a on my 1040 form, not any estimated amount. Also double-check that you're using "Single" vs "Head of Household" - that trips people up sometimes. The system is definitely glitchy right now but hang in there!