This is such a helpful thread! I'm dealing with a similar situation but have an additional wrinkle - I refinanced my rental property through a cash-out refi and used some of the proceeds to pay off credit card debt that was originally used for property repairs from the previous year. How should I handle the allocation of refinancing costs in this case? Do I need to separate the costs based on the portion that was for the original loan balance versus the cash-out portion? And does it matter that the cash-out was used to pay off debt that was originally for property-related expenses? I paid about $3,800 in total closing costs on a $180K refinance where $135K paid off the existing mortgage and $45K was cash out. My accountant wasn't sure how to advise me on this, so I'm hoping someone here has dealt with a similar situation.

I've been through this exact situation with multiple rental properties over the years. Here's what I've learned from experience and working with my CPA: **The key principle**: Refinancing costs for rental properties are generally treated as loan costs that must be amortized over the life of the loan, NOT added to the property's cost basis. This is different from acquisition costs when you first purchase the property. **Costs that are typically amortized over the loan term:** - Loan origination fees - Points paid to the lender - Mortgage broker fees - Appraisal fees (since they're for the lender's benefit) - Credit report fees **Costs that may be added to basis:** - Recording fees for the deed - Title insurance (sometimes - depends on specifics) - Legal fees for title work **Important note**: Your $4,200 in refinancing costs will likely be mostly amortizable expenses rather than basis additions. For a 30-year loan, you'd deduct about $140 per year ($4,200 ÷ 30 years) on Schedule E. I'd recommend getting a professional review of your specific closing statement, as the treatment can vary based on exactly what each fee was for. The distinction matters significantly for your taxes both now and when you eventually sell the property.

Has anyone actually had their Schedule E audited for trying to claim unreimbursed partnership expenses despite the TCJA suspension? I've been claiming my home office on Schedule E anyway because my tax software lets me and I haven't had an issue for 2 years...

I went through this exact situation last year and ended up working with a tax professional to sort it out. Here's what I learned: The key issue is that under TCJA, unreimbursed partnership expenses are essentially not deductible on your personal return through 2025. However, there are several legitimate workarounds: 1. **Partnership Reimbursement Plan**: Have your partnership adopt an accountable plan to reimburse you for the home office expenses. The partnership deducts it, and you don't report the reimbursement as income. 2. **Guaranteed Payments**: As mentioned above, the partnership can make guaranteed payments to you for office space usage, which creates self-employment income that you can then deduct against on Schedule C. 3. **Partnership-Level Allocation**: Some partnerships can allocate these expenses at the entity level rather than having partners claim them individually. The guaranteed payment route worked best for me since it was straightforward to document and my partnership was small enough to easily amend our agreement. Yes, you pay SE tax on the guaranteed payments, but the home office deduction (using the simplified method) often more than offsets this. Whatever you do, don't just claim it on Schedule E without proper structure - the IRS computers will eventually catch up with returns claiming suspended deductions. Better to do it right from the start!

Ugh, I feel your pain! Just went through this exact same thing last month. Got my adjustment letter and was told 180 days too, but it actually only took about 7 weeks from when I got the letter. The 180 days seems to be their worst-case scenario they give everyone. Have you been able to check your transcripts online? That usually gives you a better idea of what's actually happening with your return. The waiting is definitely the most stressful part though - hang in there! 🤞

Ugh, I totally get your frustration! I'm dealing with the exact same thing right now - got my adjustment letter about 2 weeks ago and have been spiraling about the 180 day wait time. Reading through all these comments is actually making me feel so much better though! Sounds like most people are getting their refunds way sooner than 6 months. Definitely going to check out taxr.ai tonight after seeing all these success stories - seems like it could save me a lot of stress and sleepless nights wondering what's going on with my return. The IRS really needs to get better at communicating realistic timelines instead of just throwing out the maximum wait time and scaring everyone 😅

As someone who's dealt with similar classification issues, I'd strongly recommend documenting everything about this role before making a decision. Take screenshots of the job posting, save any emails about scheduling requirements, and keep records of their training materials and meeting attendance policies. This documentation becomes crucial if you ever need to challenge the classification later. The IRS looks at the totality of the working relationship, and having concrete evidence of their control over your work methods, schedule, and processes strengthens any potential misclassification claim. Also, consider asking them directly: "Given that you're scheduling my appointments, requiring specific training, and mandating meeting attendance, how do you justify 1099 classification under IRS guidelines?" Their response (or lack thereof) will tell you a lot about whether they're aware they're pushing legal boundaries. If you do take the position temporarily, make sure to set aside at least 25-30% of your income for taxes since you'll be paying both portions of Social Security and Medicare taxes plus regular income tax with no withholding.

This situation is unfortunately more common than it should be, especially in sales roles. You're absolutely right to be suspicious - what you've described clearly sounds like employee misclassification based on the IRS's control test. The fact that they control your schedule, require specific training, mandate meeting attendance, and dictate your work processes are all strong indicators that you should be classified as a W2 employee, not a 1099 contractor. True independent contractors have autonomy over how, when, and where they complete their work. Here's what I'd suggest before making your decision: 1. **Get everything in writing** - Ask for a detailed written description of the role, including all requirements, expectations, and commission structure. Vague promises about "performance-based" pay are huge red flags. 2. **Calculate the real cost** - As others have mentioned, you'll pay an additional 7.65% in self-employment taxes, plus lose unemployment insurance, workers' comp protection, and any benefits. Make sure any commission structure truly compensates for these additional costs. 3. **Consider it a temporary stepping stone** - If you need income immediately, you could take the role while actively job searching, but document everything and set aside 25-30% of earnings for taxes. 4. **Know your rights** - You can file Form SS-8 with the IRS to get an official determination on your worker classification, and there are protections against retaliation for questioning classification. The positive reviews might be from people who don't realize they're being shortchanged, or from the small percentage of top performers who can make the 1099 structure work in their favor through high earnings and expense deductions. Trust your instincts here - if it feels sketchy, it probably is.

One thing I'm not seeing mentioned here is the risk of continuing as a misclassified worker. My cousin was in this exact situation and didn't address it because she was afraid of losing her job. When she eventually left and filed for unemployment, she was denied because she had no employment history - just 1099 income. Also had zero credit toward Social Security and no worker's comp when she got injured on the job.

This is such an important issue that more people need to understand. I've seen this happen so many times in the beauty industry specifically - salon owners often misclassify assistants and junior stylists to avoid payroll costs, but it really hurts the workers in the long run. Your partner should definitely document everything right now - work schedules, payment records, any written instructions about dress code or procedures, texts about when to come in or take breaks. The more evidence she has showing that her boss controls how, when, and where she works, the stronger her case will be. One thing to consider is that many states have their own independent contractor tests that are even stricter than the federal IRS test. Some states use an "ABC test" where all three criteria must be met for someone to be considered an independent contractor. Given that your partner works set hours following someone else's rules, she'd likely fail most state tests too. The salon owner may genuinely not understand the law, but ignorance isn't a defense. Employee misclassification costs the government billions in lost tax revenue and denies workers basic protections. Your partner deserves to have proper employment status, access to unemployment benefits, and not have to pay double FICA taxes on income that should be treated as wages.