Don't forget about state taxes too! Depending on your state, they might handle depreciation recapture and passive losses differently than the IRS. I live in California and was shocked to find out they have different rules for this situation. Anyone else have experience with state-specific handling?

For the official IRS guidance you're looking for, check out Publication 925 (Passive Activity and At-Risk Rules) - specifically pages 6-7 which cover the disposition of passive activities. This explains exactly how your $125K in carried forward passive losses become fully deductible when you sell the rental property. Also look at Publication 544 (Sales and Other Dispositions of Assets) which covers the depreciation recapture rules. The key point is that Internal Revenue Code Section 469(g) allows all suspended passive losses to be deducted in the year you completely dispose of your interest in the passive activity. You're right that they're separate calculations - you'll pay up to 25% on the $132K depreciation recapture, but you'll also get to deduct the full $125K in passive losses against your other income. So while you have about $7K in "economic profit," your tax situation will be quite different due to how these items are treated separately on your return. Make sure your tax preparer understands this - I've seen many get confused about how the passive loss suspension rules work upon full disposition of a rental property.

Has anyone mentioned the possibility of the Educational Assistance Program under Section 127? If your university sets up their tuition remission as a proper Section 127 plan, the first $5,250 per year can be excluded from your income. I work at a different university, and our HR specifically structured our tuition benefits this way. So instead of having the full amount added to my W-2, only the amount over $5,250 gets reported as taxable income. Might be worth specifically asking your HR if they have a Section 127 Educational Assistance Program in place!

This is such a comprehensive discussion! As someone who just went through a similar situation with my Master's program, I want to add one more consideration that saved me significant money. If you're planning to itemize deductions anyway (which you might with the work-related education expenses), don't forget about the potential to deduct other job-related expenses like professional development conferences, certifications, or even a portion of your home office if you do university work from home. Also, since you mentioned getting vague answers from HR, I'd suggest requesting a meeting specifically with your benefits administrator rather than general HR. In my experience, they're much more knowledgeable about the tax implications of tuition benefits. Ask them specifically about: 1. Whether they use Section 127 (as Sean mentioned) 2. The exact timing of when tuition benefits get reported on your W-2 3. If they provide any standardized documentation for tax purposes The timing aspect is crucial because if the benefit gets reported in a different tax year than when you actually take the courses, it could affect your deduction strategy. Some universities report the benefit when courses start, others when they pay the tuition bill. One last tip: start keeping detailed records NOW, even before you enroll. Document every conversation with HR, save all emails, and keep a log of how your current job duties relate to the Ed.D coursework you're planning to take.

I'm in a very similar situation with multiple part-time jobs and was making the same mistake of just filling out Step 1 and Step 5 on all my W-4s. Reading through these responses has been incredibly helpful! One thing I'm still confused about - when you check the box in Step 2(c) for multiple jobs, does that automatically increase the withholding rate, or do you still need to calculate additional amounts for Step 4(c)? I have two part-time jobs that vary between 15-25 hours each per week, so my income is pretty unpredictable. Would it be safer to just have them withhold an extra $50-100 per paycheck from my primary job to make sure I don't owe anything? I'd rather get a refund than be surprised with a big tax bill. Also, @Khalid Howes - definitely update that W-4 for job A as soon as possible! Even a couple months of under-withholding can add up, especially if your hours have been inconsistent.

I just want to echo what everyone else is saying - definitely update that W-4 for job A right away! I made the same mistake when I first started working multiple jobs and it cost me about $800 in unexpected taxes. Here's what I wish someone had told me earlier: when you have multiple jobs with unpredictable hours like yours, it's actually better to over-withhold than under-withhold. The IRS doesn't care if you get a big refund, but they definitely care if you owe money and can't pay it. For your situation, I'd recommend: - Job B (your main 30-hour job): Complete the full W-4 with Step 2(c) checked for multiple jobs - Jobs A, C, and D: Just Steps 1 and 5, plus check Step 2(c) for multiple jobs - Consider adding $25-50 extra withholding per paycheck in Step 4(c) on job B since your hours are so variable The extra withholding acts like a safety net. With four different jobs and unpredictable schedules, your total income could end up higher than you expect, which would push you into a higher tax bracket. Better to be safe and get money back than scramble to pay a tax bill next April! You can always adjust your W-4s throughout the year if you find you're withholding too much. Don't stress too much about getting it perfect - just get it reasonably close and err on the side of caution.

Has anyone used TurboTax Self-Employed for their prop trading taxes? I'm trying to decide if I should use that or hire an accountant.

I went through this exact situation last year when I started prop trading! A few key things I learned the hard way: 1. You'll definitely want to find a CPA who understands trading - it's worth the extra cost. Regular tax preparers often don't grasp the nuances of trader expenses and quarterly payments. 2. Start tracking EVERYTHING now - trading software subscriptions, home office space, computer equipment, even books and courses related to trading. The deductions can really add up. 3. For quarterly payments, I use the safe harbor rule (paying 100% of last year's tax liability divided by 4). It's simpler than trying to estimate variable trading income. 4. One thing that caught me off guard - you might need to pay both sides of Social Security/Medicare tax (15.3% total) on your net prop trading profits since you're self-employed. 5. Consider opening a separate business checking account for all your trading-related expenses. Makes record keeping much cleaner come tax time. The learning curve is steep but manageable once you get the systems in place. Don't stress too much - just start documenting everything and find that specialized accountant!

Looking at your transcript, you're actually in pretty good shape! The processing date of March 10th is when your amendment will be fully processed, not when you have to wait until. That second 971 code with "202212" is likely just a system notation - I wouldn't worry about it unless you get a notice. Your account balance of -$8,832 is promising - that negative balance typically indicates what you'll receive as a refund. The $1,300 credit (code 766) is probably just one component of your total refund. Since you're on the daily processing cycle (which is faster than weekly), and your amendment was accepted 2/8, you're looking at roughly 8-12 weeks total processing time. So expect your refund somewhere between early April to early May. Keep checking for code 846 - that's when your refund is officially issued and should hit your account within 3-5 business days after that. The EIC (code 768) is a good sign too - that's additional refundable credit that will be included in your final refund amount. Just be patient, your amendment is moving through the system normally!

Just went through something very similar! My amended return was accepted on 1/15 and I just got my refund last week (took about 10 weeks total). Your transcript looks really good - that -$8,832 account balance is almost certainly going to be your refund amount when everything processes through. A few things that helped me during the wait: - Check your transcript weekly for updates (I used the IRS website) - That 971 code about "wrong identifying number" is usually just a system note, not something to worry about - The March 10th processing date means that's when they'll finish working on it, not when you have to wait until Your daily processing cycle is definitely better than weekly - mine was weekly and still came through in reasonable time. The EIC (code 768) will add to your refund too. Based on my experience, you're probably looking at getting your money sometime in April, maybe early May at the latest. Just keep watching for code 846 (refund issued) and then you'll know it's on the way! The waiting is the worst part but your amendment is clearly progressing normally through the system.