Has anyone actually claimed this credit as a non-owner and gone through an audit successfully? I'm in a similar situation with my parents' property and getting conflicting info from different tax preparers.

I went through this exact situation two years ago when I installed a heat pump at my grandmother's house where I was living. The key thing that helped me was getting everything documented upfront - I made sure all the invoices were in my name, kept utility bills showing I lived there, and got a letter from my grandmother confirming I was responsible for the improvements. One thing I'd add to the great advice already given - consider having a written agreement with your in-laws about the improvements you're making. Even something informal can help establish that you're genuinely responsible for these costs as part of your living arrangement, not just doing them a favor. This could be helpful if the IRS ever asks questions about why a non-owner is claiming the credit. The 30% credit is substantial, so it's definitely worth pursuing if you meet the requirements. Just make sure you understand which components of your HVAC system qualify - the heat pump itself definitely does, but things like ductwork modifications might not.

Just a warning about the "keep it under $600 per platform" strategy - the rules are changing! The 1099-K reporting threshold was supposed to drop to $600 across all platforms last year, then got delayed, but it's likely coming soon. Also, the IRS can look at patterns. If they see you're conveniently just under reporting thresholds on multiple platforms, that could trigger questions. Better to just report everything properly and take advantage of all legitimate deductions. Honestly with your situation of low income this year and higher next year, you might even WANT to recognize more income this year while you're in a lower tax bracket!

Great thread everyone! As someone who went through a similar situation last year, I wanted to add a few thoughts that might help. The advice about recognizing income this year while you're in a lower bracket is spot on - that's exactly what I wish I had done. I ended up deferring a lot of sales and got hit harder tax-wise the following year when my regular income kicked in. One thing I learned the hard way: even if you're selling personal items at a loss (which is common with clothes), you still need to be able to reasonably document your original cost basis. I started taking photos of similar items online to show typical retail prices for the brands/styles I was selling. It's not perfect, but it helps establish that you're not just making up numbers. Also, don't forget about state taxes! Some states have different thresholds and requirements than federal, so make sure you're considering both levels. The suggestion about using a dedicated credit card for selling expenses is golden - makes tracking so much easier at tax time. I use a simple spreadsheet too, but having that card statement as backup is really helpful. Good luck with your sales! Sounds like you're being smart about planning ahead.

The Michigan Treasury is so behind rn its not even funny. Their still processing stuff from January smh

I feel your pain! Filed mine paper on Feb 5th and still waiting too. Called the Michigan Treasury helpline yesterday and they said they're running about 8-10 weeks behind on paper returns due to staffing issues. The automated system won't even show your return until they physically scan it into their system, which could be weeks from when they receive it. Hang in there - at least we'll get our refunds eventually!

A lower refund usually means you had more money in your paychecks throughout the year. Check your final pay stubs from both years and compare the net pay. Bet you'll find you were bringing home more per check this year! A refund is just you getting your own money back that you overpaid, it's not free money from the government lol

I had almost the exact same thing happen to me! Expected around $2,000 and only got $750. After digging through everything, I found a few key things that changed between last year and this year: 1. My employer switched payroll companies mid-year and the new one used slightly different withholding calculations - even though my W-4 stayed the same, they were withholding about $15 less per paycheck. 2. I had a small amount of freelance income this year ($800) that I reported on a 1099, which pushed me just over a threshold for one of the tax credits I was getting last year. 3. The big one - last year I was still getting some pandemic-related tax benefits that expired. I didn't realize how much those were helping my refund until they were gone. My advice is to pull out last year's tax return and compare it line by line with this year's. Look especially at your credits section and any COVID-related items from last year. Also check if your employer changed anything about payroll - sometimes they don't announce small changes to withholding procedures. It's frustrating but you probably didn't actually pay more in taxes, you just got more money throughout the year in your paychecks instead of at refund time!

Accountant here - this kind of "left hand doesn't know what the right hand is doing" situation happens all the time with the IRS, especially with ITIN processing. Here's what you need to know: 1. The CP565 (approval) followed by tax return processing is what matters here 2. The CP567 was almost certainly generated by an automated system that didn't check if an approval had already been issued 3. The fact that your refund was processed using the ITIN is concrete proof that the ITIN is valid in the IRS system For peace of mind, I would recommend keeping all documentation (both notices) indefinitely. Also, when you file next year, include a copy of the CP565 approval notice with your return. One additional step you might consider: request an "Account Transcript" through the IRS website for the tax year in question. This will show the ITIN being used successfully for processing and serve as additional documentation that everything is fine.

I just wanted to add that when you file next year, you might want to attach a cover letter explaining the situation along with copies of both the CP565 and CP567, plus a printout of your transcript showing the return was processed successfully. This creates a paper trail that will help if anyone questions the ITIN validity in the future. Also, keep in mind that ITINs expire if not used on a tax return for three consecutive years. So make sure to use it consistently, even if you're filing separate returns in some years. I've seen this exact issue at least 5 times with clients - contradiction between approval and rejection. In every case, when the return was processed with the ITIN, that trumped any rejection notice. The IRS systems just don't communicate well between departments.