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PRO TIP: your transcript will tell you way more than WMR. Go pull those if you can access them
thats why i started using taxr.ai - it reads them for you and explains everything in plain english
I feel your pain! Been in the exact same situation - filed in late January as Head of Household and got stuck with that same "delayed beyond normal timeframe" message for what felt like forever. The worst part is how vague they are about timelines. From my experience, the Head of Household status does seem to trigger extra reviews more often. They want to make sure you actually qualify (supporting a qualifying person, paying more than half the household costs, etc.). I ended up having to wait about 8 weeks total before it finally moved to "Refund Approved" and then got deposited within a few days after that. The key thing is that once you see that delay message, you're basically in a manual review queue. No amount of checking the app will speed it up unfortunately. I know it's frustrating but try to check maybe once a week instead of daily - it'll save your sanity and your phone battery! š Hang in there, it will eventually process!
Thanks for sharing your experience! 8 weeks sounds about right from what I've been hearing from others. I'm probably around week 6-7 now so hopefully getting close. The Head of Household review makes total sense - I do qualify but I can see why they'd want to double check since it affects the tax brackets and standard deduction amounts. Really appreciate the advice about checking less frequently, my poor phone has been through it with all my obsessive refreshing! š
Has anyone used TurboTax for handling home office additions? I'm worried it won't handle the complex depreciation schedules correctly. Does the business version cover this stuff or should I pay for a CPA this year?
I used TurboTax Self-Employed for my home office addition last year and it worked fine for the basic depreciation, but I found it lacking for some of the nuanced questions about partial year use and mixed-use spaces. I ended up consulting with a CPA for an hour just to double-check everything. Money well spent, she found several deductions TurboTax missed.
One thing to consider that hasn't been mentioned yet - if you're planning to use the space 100% for business as you stated, make sure you understand the "exclusive use" test. The IRS is pretty strict about this - it means ONLY business use, no personal activities whatsoever in that space. I learned this the hard way when my accountant told me that even having my kids do homework in my home office occasionally could disqualify the entire deduction. You might want to think about the layout and access to ensure you can truly maintain exclusive business use. Also, since you mentioned this is to avoid buying a bigger house - document that business necessity thoroughly. Keep records showing how your current business operations are constrained by lack of space, client meeting needs, etc. This helps establish the business purpose if the IRS ever questions the addition. The $135k investment sounds substantial, but if properly structured, the tax benefits over time plus avoiding a house purchase could make it very worthwhile. Just make sure you get professional guidance before breaking ground to avoid any costly mistakes in how you set things up.
Great point about the exclusive use test! I'm curious - does having a separate entrance to the office space help strengthen the case for exclusive business use? We're considering adding an external door to the planned addition so clients can enter directly without going through the main house. Would this help with IRS documentation or is it more about how the space is actually used day-to-day? Also, when you mention documenting business necessity, should we be keeping records of lost business opportunities due to space constraints? I've had to turn down some client meetings because our current setup isn't professional enough, but I'm not sure what kind of documentation would be most convincing to the IRS.
I went through this exact situation with my own kids last year. Your accountant is absolutely right - when it's your own children, the IRS considers them employees rather than independent contractors, regardless of the type of work. The key thing to understand is that this actually works out better for you tax-wise. Since you're a partnership LLC with both parents as partners, wages paid to your kids under 18 are exempt from FICA taxes (Social Security and Medicare). That's a 15.3% savings right there. For the payroll setup, you don't necessarily need a big payroll company. I handled it myself using basic payroll software and just filed the quarterly reports manually. The amounts you're talking about ($600-800 each) are pretty manageable to process yourself. Make sure you document everything properly - have them fill out timesheets, take photos of the actual work being done, and keep records showing this is legitimate compensation for real work. The IRS looks closely at family businesses to make sure parents aren't just shifting income to kids to avoid taxes. Also check if your state requires work permits for minors - some do, even when working for parents. Better to be over-compliant than face issues later.
This is really helpful, thank you! I'm new to this whole situation and honestly feeling overwhelmed by all the requirements. When you say you handled the payroll yourself, did you use any specific software? I'm worried about making mistakes with the tax calculations and filings, especially since this involves my kids. Also, do you know if there's a minimum amount that triggers reporting requirements? I want to make sure I'm not creating unnecessary paperwork for such small amounts.
@ec376b7e0a35 I used QuickBooks Self-Employed initially, then switched to their Simple Start plan when I realized I needed proper payroll features. It walks you through everything step by step and handles the tax calculations automatically. For reporting requirements, any wages you pay are subject to income tax withholding and reporting regardless of amount. Even though your kids probably won't owe any taxes due to the standard deduction, you still need to issue W-2s at year end and file the appropriate quarterly forms (941, etc.). The good news is that with amounts under $1000 per child, the actual paperwork burden is pretty light. Just make sure you're withholding federal income tax appropriately - you can use the IRS withholding tables or let the payroll software calculate it. Keep it simple and document everything well, and you'll be fine!
I went through this exact situation last year with my photography business! Your accountant is definitely correct - even though it feels weird since you'd normally 1099 other models, the family relationship changes everything from a tax perspective. The IRS has specific rules about family members working in the business. Since these are your children and you'd be directing their work, they can't meet the "independence" test required for contractor status. But honestly, the employee route works out better financially anyway. One thing that really helped me was reaching out to a local small business development center (SBDC). They often have free consultations and helped me understand exactly what documentation I needed to keep. They also pointed me to some simpler payroll solutions that don't require expensive monthly fees for occasional payments. For the amounts you're talking about, you might also consider just doing quarterly payments rather than setting up ongoing payroll. You'd still treat them as employees and issue W-2s, but it's less administrative burden than monthly payroll for such small amounts. Just make sure to document the actual work being performed - keep records of photo sessions, time spent, and what they actually did. The IRS wants to see this is legitimate work, not just income shifting to your kids.
This is such great advice! I'm dealing with the same situation and had no idea about SBDCs offering free consultations for this kind of thing. Do you remember what specific documentation they recommended keeping beyond just time sheets and photos? Also, when you mention quarterly payments instead of ongoing payroll, how did you handle the tax withholding calculations? I'm worried about getting that part wrong since it's for my own kids.
Something nobody mentioned yet - since you have a regular W2 job, you could increase your withholding there to cover the taxes from your self-employment income. Just submit a new W-4 to your employer and put the additional amount you want withheld on line 4(c). This way you don't have to mess with quarterly estimated payments, and as long as you withhold enough through your W2 job, you won't face underpayment penalties. It's what I do with my teaching job to cover taxes for my tutoring side gig.
This is brilliant and so much easier than tracking quarterly payments! Do you have any formula for figuring out how much extra to withhold? Like is it just 30% of whatever you make from 1099 work or something?
A rough rule of thumb is to set aside about 25-30% of your 1099 income for taxes (this covers both income tax and self-employment tax). So if you made $12,400 in freelance income, you'd want to withhold an extra $3,100-$3,700 from your W2 job throughout the year. But it really depends on your tax bracket. Since you're making $68K from your W2 job, you're probably in the 22% federal bracket, so you'd owe about 22% income tax plus 15.3% self-employment tax on your freelance income. That's roughly 37% total, but you can deduct half the SE tax and any business expenses, so 30% is usually a safe estimate. The IRS has a withholding calculator on their website that can help you get a more precise number based on your specific situation. Just plug in your W2 income, expected 1099 income, and any deductions you plan to take.
Great question about the W2/1099 combo! I went through this exact same situation a few years ago and learned some hard lessons. A couple additional points that might help: First, don't panic too much about the underpayment penalty - it's usually not as scary as it sounds. The IRS charges interest on what you owe, but if this is your first year with significant 1099 income, the penalty might be relatively small compared to the stress you're feeling about it. Second, make sure you're tracking ALL your business expenses throughout the year, not just the obvious ones. Things like mileage to client meetings, business meals (50% deductible), professional development courses, and even bank fees for your business account can add up. I use a simple spreadsheet to log everything monthly. Also, consider opening a separate checking account for your freelance income and expenses - it makes record keeping so much easier and looks more professional if you ever get audited. Even if it's just a free account, having that separation between personal and business finances will save you headaches later. One last tip: start putting 25-30% of each freelance payment into a separate savings account immediately when you get paid. That way you're not scrambling to find tax money later, and if you end up owing less than expected, it's like getting a bonus!
This is such helpful advice, especially about the separate savings account! I just started freelancing this year and have been putting everything into my regular checking account. Question though - when you say 25-30%, is that before or after business expenses? Like if I make $1000 on a project but spend $200 on software and supplies, do I set aside 25-30% of the full $1000 or just the $800 profit?
Connor Byrne
I went through this exact situation last month as a first-time H&R Block customer! My timeline was pretty similar to what others have shared - got IRS acceptance in about 26 hours, and the refund advance approval came through about 6 hours after that. What really helped me was making sure I had all my homeowner documents (mortgage interest, property taxes) uploaded clearly from the start. The Tax Pro Review definitely seems worth it for the peace of mind and potentially faster processing. One tip: I set up text notifications in addition to email because I got the approval text about 3 hours before the email arrived. The waiting is stressful but it sounds like you've done everything right! Keep us posted on how it goes.
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Anastasia Sokolov
ā¢Thanks for sharing your timeline, that's really encouraging! I'm curious - when you mention setting up text notifications, did you do that through H&R Block's website or their mobile app? I'm also a homeowner and made sure to upload all my mortgage documents properly, but I'm wondering if there are any other notification settings I should enable to get updates as quickly as possible. The waiting really is nerve-wracking when you're counting on that advance!
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Connor Gallagher
I'm also going through this process right now as a first-time H&R Block customer! Filed with Tax Pro Review on Thursday and still waiting for IRS acceptance. Reading through everyone's experiences here is really reassuring - it sounds like the 24-48 hour window is pretty accurate. I'm a homeowner too and made sure to have all my mortgage interest statements and property tax documents properly organized before filing. My expected refund is around $3,200, so based on what Louisa mentioned about the median being $2,847, I'm cautiously optimistic about the advance approval. Has anyone noticed if filing earlier in the week (like Monday/Tuesday) versus later affects processing times? I'm wondering if I should have waited until Monday to avoid any weekend delays, but I was eager to get the ball rolling. Thanks for all the detailed timelines everyone - this community is so helpful!
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