This is a great discussion! I'm dealing with a similar situation but with a twist - I converted my rental property to mixed-use about 3 years ago and just realized I may have been handling the depreciation incorrectly this whole time. I've been continuing to depreciate the personal-use portion on Schedule E at a reduced percentage rather than removing it entirely. After reading this thread, I'm realizing I should have stopped depreciating that portion completely when I moved in. Should I file amended returns for the past 3 years to correct this? Or is there a way to adjust going forward without having to amend? I'm worried about triggering an audit by filing multiple amended returns, but I also don't want to compound the error by continuing with the wrong method. Has anyone else had to correct depreciation mistakes like this after the fact?

I've been following this thread closely as I'm dealing with a similar mixed-use conversion situation. One thing I want to emphasize that hasn't been mentioned enough is the importance of getting a professional appraisal at the time of conversion. When I converted part of my rental property to personal use, my CPA strongly recommended getting an official appraisal to establish the fair market value of each portion at the conversion date. This documentation became crucial for calculating the proper basis adjustments and will be essential when I eventually sell. The appraisal cost me about $500, but it's already saved me potential headaches. The appraiser was able to break down the value by floor/section, which made the allocation between business and personal use much cleaner for tax purposes. Without this documentation, I would have been making educated guesses that could easily be challenged in an audit. For anyone dealing with these conversions, I'd highly recommend budgeting for a professional appraisal. It's a small cost compared to the potential tax implications of getting the basis calculations wrong.

Just to add on to what others have said - the 2025 W4 doesn't even have allowances anymore like the old form did. It's structured completely differently now. You need to fill out the multiple jobs worksheet if you have more than one job, or the deductions worksheet if you have a lot of deductions. The form is actually easier to use now but claiming exempt still has the same requirements - you need to have had NO tax liability last year and expect NONE this year. At $68k, you definitely don't qualify.

Hey Miguel! I was in almost the exact same situation as you - making around $70k, getting huge refunds, and wanting more money in my paychecks. Definitely don't claim exempt though - that's only for people who literally owe zero taxes, which definitely isn't the case at your income level. What worked for me was using the IRS Tax Withholding Estimator (it's free on irs.gov) to figure out exactly how to fill out my W4. Since you're single with no kids and just have student loans, it should be pretty straightforward. You'll probably want to claim the standard deduction and maybe add your student loan interest deduction if you pay interest on those loans. The key is using Step 4 on the W4 - you can reduce your withholding there without going all the way to exempt. I ended up putting about $2,000 in the deductions section (Step 4b) which increased my take-home by about $150 per paycheck. Still got a small refund of around $400 instead of the $3,000+ I was getting before. Just be conservative with your first attempt - you can always adjust it again if needed!

Just to add another perspective - I've been freelancing for about 8 years and have dealt with a few large cash payments over the years. The key thing that's helped me is treating cash payments exactly the same as any other business transaction from a documentation standpoint. I always create a proper invoice beforehand (even for cash transactions), have the client sign a simple receipt when they hand over the cash, and take a photo of both the signed receipt and the cash before heading to the bank. It might seem like overkill, but it's saved me from headaches during tax season. One more tip - consider asking your client why they specifically need to pay in cash. Sometimes there are legitimate reasons (like they're liquidating assets or closing an account), but it's worth understanding the situation fully. This context can also be helpful if anyone asks questions about the transaction later.

I actually went through something very similar about 6 months ago with a consulting client who needed to pay me $12k in cash due to some banking issues on their end. Here's what I learned from the experience: First, definitely don't stress too much about the CTR filing - it's completely routine for the bank and not something that should cause you problems as long as you're honest about the source of funds. When I went to make my deposit, I brought a copy of my invoice, a simple handwritten receipt I had the client sign, and my ID. The whole process took maybe 15 minutes. One thing I'd strongly recommend is depositing the full amount at once rather than trying to break it up. As others mentioned, structuring deposits to avoid the reporting threshold is illegal even if your money is completely legitimate. Also, make sure you're prepared for your quarterly estimated tax payments if you haven't been making them already. A lump sum this size might push you into underpayment territory if you're not careful with the timing. I ended up owing a small penalty because I didn't adjust my estimated payments quickly enough after the cash deposit. The bank teller did ask a few basic questions about where the money came from, but having the invoice and receipt made it a non-issue. They were actually pretty helpful in explaining the CTR process and confirming I had everything I needed for my records.

I actually work for a tax preparation service and deal with these situations fairly often. One thing that hasn't been mentioned yet - if you're calling about a refund that was supposed to go to the closed account, the IRS will likely need to issue what they call a "manual refund check" along with the indemnity letter. This can add a few extra weeks to the process, so just be prepared for that timeline. Also, when you call, mention right away that you need an indemnity letter for a closed bank account - this helps them route you to the right department faster. The representatives are actually pretty helpful once you get to the right person. Don't let the horror stories scare you too much!

Just wanted to share my recent experience since I went through this exact process last week! Called the IRS main number (1-800-829-1040) and when prompted, selected option 1 for refund inquiries, then option 3 for direct deposit issues. Got connected to someone who knew exactly what I needed when I mentioned "indemnity letter for closed bank account." The rep was actually super helpful and walked me through everything. They took down my bank info, asked about the account closure reason, and confirmed my mailing address. Got my confirmation number on the spot and they said to expect the letter in 10-15 business days. Total call time was about 35 minutes including hold. Way less intimidating than I expected! Pro tip: have your last tax return handy because they might ask you to verify some details from it.

Thanks everyone for all the helpful responses! Based on what you've all shared, I think I figured out what happened. The DoorDash income definitely explains a big chunk of it - I had no idea about self-employment tax being so much higher. Plus looking at my W-2, I only had about $2,800 withheld for federal taxes from my main job, which seems low based on what Gabriel mentioned. I'm going to double-check my FreeTaxUSA entries to make sure I didn't miss anything, but it sounds like this might just be the reality of having mixed W-2 and 1099 income without planning ahead. Lesson learned for next year - I'll either set aside money quarterly or adjust my W-4 to have more withheld from my regular job to cover the gig work taxes. Really appreciate everyone taking the time to explain this stuff. Tax season is so confusing when you're just starting out!

Great thread everyone! As someone who's been through this exact situation, I wanted to add that FreeTaxUSA actually has a really helpful "Why do I owe?" feature that breaks down exactly where your tax liability is coming from. If you go back into your return, there should be a summary page that shows the breakdown between regular income tax and self-employment tax. Also, for anyone doing gig work going forward - consider opening a separate savings account and automatically transferring 25-30% of your gig earnings into it throughout the year. That way you're not hit with a surprise tax bill. I learned this the hard way after owing $1,800 my first year doing Uber on top of my regular job! The IRS also has a safe harbor rule - if you pay at least 100% of last year's tax liability through withholding and estimated payments, you won't owe penalties even if you end up owing more at filing time. Something to keep in mind for planning next year.