As a tax professional who's seen this exact scenario play out many times, I want to echo what others have said - your instincts are absolutely correct here. UPEs should be reported on Schedule E, and your CPA's refusal to provide clear documentation supporting his Schedule C position is a major red flag. What's particularly troubling is his claim that Schedule E reporting creates "immediate scrutiny." This is simply not supported by any IRS guidance or data. If anything, the mismatch between K-1 partnership items and Schedule C business expenses is more likely to trigger questions during processing. I'd recommend giving your CPA one final opportunity to provide written IRS authority supporting his position. Ask specifically for the regulation, revenue ruling, or other official guidance that says UPEs should go on Schedule C instead of Schedule E. When he inevitably can't provide this (because it doesn't exist), you'll have your answer about whether to continue working with him. Your concerns about signing a return that contradicts IRS instructions are completely valid. Don't let anyone pressure you into filing something you're not comfortable with - especially when multiple professionals here have confirmed your understanding is correct.

As someone who's been through partnership tax issues myself, I completely understand your frustration with this situation. What's most concerning to me is not just the technical disagreement, but your CPA's unwillingness to engage in a professional discussion about it. I've read through all the responses here, and the consensus from multiple tax professionals - including a former IRS revenue agent - is crystal clear: UPEs should be reported on Schedule E according to IRS instructions. Your instincts about this are absolutely correct. What really stands out is that your CPA is making claims about "immediate scrutiny" and "red flags" without being able to provide any actual IRS guidance to support these assertions. Any legitimate tax position should be backed by regulations, revenue rulings, or other official guidance. The fact that he's "flat-out refused" to consider the technically correct approach is deeply troubling. I'd suggest giving him one final opportunity to provide written documentation from the IRS that supports putting UPEs on Schedule C. When he can't (because it doesn't exist), you'll know it's time to find a new CPA who prioritizes compliance with IRS instructions over their own unsubstantiated theories about audit risk. Don't compromise on filing a return you're not comfortable with. Your concerns about following IRS instructions are completely valid, and you deserve a tax preparer who will work with you rather than dismissing your legitimate questions.

I'm currently going through this exact situation too! My refund showed as sent on WMR 5 days ago but nothing has appeared in my account. I'm pretty confident I entered my banking info correctly, but after reading all these experiences, I'm starting to think maybe I made a small error somewhere. It's actually really reassuring to see how common this is and that the IRS has an established process for handling rejected deposits. I'm going to give it the full week for my bank to either process or reject it, then start checking my transcript for those rejection codes everyone mentioned. Already verified my mailing address is current just in case a paper check needs to be issued. This community has been incredibly helpful - I was starting to panic but now I feel much more confident this will get resolved automatically. Has anyone noticed if credit unions handle these rejected deposits differently than traditional banks?

I'm going through the exact same thing right now! My refund was sent 4 days ago according to WMR, but my bank says they haven't received anything. I initially panicked and thought something terrible had happened, but reading through all these experiences has been such a huge relief. It sounds like this is way more common than any of us realized, and the IRS actually has a pretty streamlined process for handling these situations. I'm going to wait the full 5-7 business days for the potential bank rejection, then check my transcript for those codes everyone keeps mentioning. Already double-checked that my mailing address is current in my IRS online account just in case a paper check gets issued. It's amazing how this community has turned my anxiety into confidence that this will get resolved! Has anyone here had their bank proactively reach out when they reject a government deposit, or do they usually just silently bounce it back to the IRS?

From what our community has gathered over the years, the IRS follows a fairly predictable pattern for simple returns without refundable credits: 1. File in first week of season (Jan 22-29, 2024) 2. Processing completes within 2-3 weeks 3. Major deposit batch hits around Feb 14-15 4. Subsequent batches follow weekly For returns with EITC/ACTC, the PATH Act delays processing until mid-February, with deposits typically starting February 27th this year. Your mileage may vary, but these patterns have been consistent across multiple tax seasons.

This is incredibly helpful analysis! I filed on January 26th with a simple return (no EITC/ACTC) and have been wondering about timing. Based on what everyone's sharing, it sounds like the February 14-15 batch is pretty reliable for early filers. I'm curious though - has anyone noticed if the IRS processes returns differently based on which software you used to file? I used TurboTax this year but used FreeTaxUSA last year, and I'm wondering if that affects processing speed at all. Also, for those tracking transcripts, what's the best time of day to check for updates? I've been checking randomly throughout the day but it sounds like there might be optimal times.

Something nobody has mentioned yet - check if your divorce decree has any specific language about tax benefits! Mine says we alternate years for claiming our child as a dependent, but it's completely silent on filing status. My lawyer confirmed that HOH status is determined by IRS rules regardless of what our agreement says about the dependent exemption. Even in years when my ex gets to claim our son as a dependent, I can still file HOH if he lived with me more than half the time. These are separate issues! Just make sure you're not violating your court order while also following IRS rules.

I went through this exact situation two years ago and here's what I learned: the IRS absolutely goes by actual physical custody, not what's written in your divorce decree. Since your daughter lived with you 7-8 months (65% of overnights), you clearly meet the "more than half the year" test for Head of Household. The key thing is documentation. I kept a simple calendar marking every night my son stayed with me, plus I saved all the texts from my ex asking me to take extra days when she traveled. School pickup/dropoff records were also helpful since they showed which parent was handling daily responsibilities. Don't stress about TurboTax putting you as HOH - the software is just following IRS rules based on the facts you entered. The important thing is that you can back up those facts if questioned. Keep records of who paid for what (sounds like you're covering most expenses anyway) and document those extra overnights when your ex travels. One tip: if you're worried about conflicting returns with your ex, consider having a conversation about it now rather than dealing with potential IRS letters later. Sometimes parents don't realize that custody agreements and tax filing status are separate issues.

I had the exact same experience when I switched from TurboTax to FreeTaxUSA two years ago! It's definitely frustrating not having the automatic carryover for that first year, but you're absolutely right that the cost savings make it worthwhile. One thing that helped me was keeping my TurboTax account active (but not paying for filing) just so I could reference my previous year's return when needed. You can still view your old returns there even if you don't file new ones. The manual entry process gets much faster once you're familiar with FreeTaxUSA's interface. I actually prefer their straightforward approach now compared to TurboTax's constant upselling and flashy distractions. And like others mentioned, next year you'll have the automatic data carryover working properly since you'll be filing through FreeTaxUSA this time. Stick with it - the learning curve is worth it for the money you'll save!

I'm going through this exact same situation right now! Just switched from TurboTax to FreeTaxUSA and was confused about why my 2023 test data wasn't showing up in the comparison sections. Reading through these responses, it makes total sense that FreeTaxUSA only carries forward data from returns that were actually filed through their system. It's actually pretty logical when you think about it - they can't assume test data is accurate or complete. I'm planning to take the spreadsheet approach that Anastasia suggested to track my own year-over-year changes this time around. And definitely going to make sure I actually file through FreeTaxUSA this year so I'll have the automatic carryover working for 2025 taxes. The cost savings alone make this minor inconvenience totally worth it. Thanks everyone for sharing your experiences - really helpful to know I'm not the only one who went through this transition confusion!