Does anyone know if other tax software handles this Section 121 exclusion for former primary residences better than FreeTaxUSA? I have a similar situation but haven't started my taxes yet.

I went through this exact same situation last year with FreeTaxUSA and it was definitely tricky to navigate. After trying several approaches, I found that Mei Zhang's workaround actually works well, but I'd add one important tip: make sure to print out and review your final forms before filing. When I used the "Sale of Home" section with my adjusted basis (original price minus depreciation taken), FreeTaxUSA correctly generated both Schedule D for the capital gain eligible for Section 121 exclusion and Form 4797 for the depreciation recapture. The key is being very careful with your basis calculation. I also recommend keeping detailed records of all the depreciation you claimed during the rental period - you'll need this for the recapture calculation. The IRS requires you to recapture depreciation even if you didn't claim it, so make sure you're accounting for all allowable depreciation during the rental years. One last thing - if your gain after the Section 121 exclusion is substantial, consider whether you need to make estimated tax payments since the depreciation recapture is taxed at 25% rather than the lower capital gains rates.

Did you file with a tax preparer? Sometimes they adjust the final refund amount and don't tell you

Also check if you're using the right SSN and filing status - those have to match exactly what's on your return. And make sure you're not confusing your refund amount with what you owe or your total tax. The tool is super picky about getting all three fields perfect.

Just want to emphasize what others have said - this is definitely something to address right away! I went through a similar situation last year where I had no federal withholding due to an error on my W-4, and it cost me big time at tax season. Even with your $5,500 dependent claim (which sounds reasonable for two kids under 17), you should still see a federal tax line on your paystub. It might show $0, but the line should be there. If it's completely missing, that's a red flag. Here's what I'd recommend doing immediately: 1. Look at your pay stub again and check for any line that might say "FIT," "Fed Tax," "Federal W/H," or similar - sometimes the labeling isn't obvious 2. Contact your HR/payroll department and ask them to verify your W-4 was processed correctly 3. If needed, submit a corrected W-4 form The good news is that with two young kids, you'll likely qualify for substantial Child Tax Credits that could offset much of your tax liability. But it's still better to have some federal tax withheld throughout the year rather than potentially owing a large lump sum. You can always adjust your withholding again if too much is being taken out once you get it sorted. Don't wait on this - the sooner you fix it, the less you'll potentially owe come tax time!

I've been following this thread closely because I'm actually a tax preparer and see this exact issue come up frequently during tax season. What you're describing - having Social Security and Medicare taxes withheld but no federal income tax - is definitely not normal for a W-2 employee. Here's what's most likely happening: When you filled out your W-4 and claimed $5,500 for your dependents, that amount should have been entered in Step 3 of the form (Child Tax Credit). However, if this was processed incorrectly or if you accidentally marked "Exempt" in Step 4(c), it would explain why no federal tax is being withheld. Even with legitimate zero withholding due to your dependent claims, you should still see a federal tax line on your paystub showing $0.00. The complete absence of this line usually indicates a processing error. My advice: Contact HR immediately with your most recent paystub and ask them to show you exactly what W-4 information they have in their system. With two kids under 17, you'll get $4,000 in Child Tax Credits, but depending on your income level, you might still owe additional taxes beyond what the credits cover. Don't wait - the longer this goes unfixed, the bigger potential tax bill you're looking at next April!

Just to add to what others have said - I work as a tax preparer and see this situation a lot with gig economy workers. The key thing to understand is that in Canada, ALL income is taxable regardless of source or amount. There's no "minimum threshold" before you have to report it. For FeetFinder specifically, this would definitely be considered self-employment income since you're providing a service/product for payment. You'll report it on Form T2125 as part of your personal tax return. One thing people often miss is that you can deduct legitimate business expenses against this income - things like photography equipment, props, a portion of your internet/phone bills, and yes, even personal grooming expenses if they're directly related to your business. Just make sure to keep all receipts and that the expenses are reasonable. Also, don't forget about CPP contributions - you'll need to pay both the employee and employer portions on your self-employment income, which can be a surprise for first-time self-employed folks. Plan to set aside about 25-30% of your earnings for taxes and CPP.

Just wanted to add a practical tip that's helped me a lot - open a separate bank account specifically for your side hustle income and expenses. This makes tracking everything SO much easier at tax time. I deposit all my platform earnings into this dedicated account and use it to pay for any business-related expenses. At the end of the year, I just need to look at one account statement instead of trying to sort through all my personal transactions to find the business ones. Also, consider using a simple spreadsheet or app to track your monthly earnings and expenses as you go. I learned this the hard way after my first year when I had to dig through hundreds of screenshots and receipts trying to piece everything together. Now I just spend 10 minutes each month updating my records and tax time is a breeze! The key is setting up good systems from the start rather than trying to organize everything retroactively.

One additional tip that might help others in this situation - if you're still within the 60-day window and haven't redeposited yet, consider doing a direct trustee-to-trustee transfer instead of a personal rollover if possible. What I mean is, if you still have the distributed funds and can work with your IRA custodian, sometimes they can facilitate putting the money back as a direct transfer rather than you personally depositing it. This can sometimes avoid confusion with the 1099-R/5498 reporting altogether. Obviously this doesn't help @Aaliyah Jackson since she already completed her rollover (and did it correctly!), but for anyone else reading this thread who finds themselves in a similar situation, it's worth asking your financial institution about this option. Some custodians are more flexible about this than others. That said, the personal rollover route that Aaliyah took is perfectly valid and very common. The key is just making sure to properly report it as everyone has explained - report the 1099-R but indicate it was rolled over so it doesn't get taxed.

This is such a valuable discussion! I've been lurking here trying to figure out my own IRA rollover situation, and this thread answered literally every question I had. One thing I want to emphasize for anyone else dealing with this - don't panic when you see that 1099-R! I almost had a heart attack when I got mine showing a huge distribution that I thought I'd have to pay taxes on. But as everyone here has confirmed, the key is just making sure you properly indicate the rollover when filing. For what it's worth, I used TaxSlayer (another tax software option) and it handled the rollover situation really well. When I entered my 1099-R information, it specifically asked "Was any portion of this distribution rolled over to another retirement account?" I answered yes, entered the rollover amount, and the software immediately zeroed out the taxable portion. The bottom line is that all the major tax software programs can handle this situation - you just have to make sure you don't skip over the rollover questions when entering your 1099-R. Keep both your 1099-R and 5498 as documentation, and you should be all set. Thanks to everyone who shared their experiences and expertise here. This community is incredibly helpful during tax season!