Has anyone used H&R Block instead of TurboTax for rental property home offices? I've had similar problems and wondering if switching software would help.

I had this exact same issue with TurboTax last year! The key thing to understand is that rental property management expenses go on Schedule E as "other expenses," not through the traditional home office deduction process. Here's what worked for me: Calculate the percentage of your home used exclusively for rental management (office square footage ÷ total home square footage). Then take that percentage and apply it to eligible home expenses like utilities, insurance, mortgage interest, property taxes, repairs, and depreciation. In TurboTax, go to your rental property section, scroll down to "Other Expenses" and manually enter each allocated expense with clear descriptions like "Home office utilities - 15% of total" or "Home office insurance - 15% of total." Don't use the regular home office deduction wizard at all - it's designed for Schedule C self-employment income, not rental properties. This approach keeps everything properly allocated on Schedule E without double-reporting income. Make sure to keep detailed records showing the space is used exclusively for rental management activities, including photos and a log of business activities conducted there.

Have you checked your IRS transcript online? Sometimes it shows processing steps that WMR doesn't reveal. The combination of self-employment and credits often triggers what the IRS lovingly calls "additional review" (their euphemism for "we're going to take our sweet time"). 😂

Been in this exact situation for the past month! Filed February 10th with 1099-NEC income, CTC, and EIC. Finally got my refund deposited yesterday (March 6th) - so about 24 days total. My transcript updated with codes 846 and 571 about a week before the actual deposit hit my account. The waiting is absolutely brutal, especially when you're getting daily "any updates?" questions from family. What helped my sanity was checking my transcript instead of WMR - at least the transcript gives you SOME indication of movement even when WMR is stuck on that useless first bar. Hang in there - seems like most self-employed filers with these credits are hitting the 3-4 week mark this year. Your refund is coming! 🤞

Quick tip for everyone confused about Form 4562 - there's a worksheet in the instructions called the "Maximum Deduction Worksheet" that walks you through this calculation step by step. Saved me a ton of headaches. Also, remember that for 2024/2025, there's a $1,220,000 limit on section 179 property, and the deduction starts phasing out when you place more than $3,050,000 of section 179 property in service. Just FYI in case anyone has much larger purchases.

The order of operations is crucial here, and I think there's been some great clarification in this thread. Just to summarize for Rita's specific situation: Your business income for section 179 purposes is calculated as: $27,000 (gross income) - $10,500 (other business expenses, with meals at 50%) = approximately $16,500-17,000 depending on how much of that $10,500 was meals. Since your desired section 179 deduction of $18,500 exceeds this business income threshold, you can only deduct up to your business income amount this year. The excess carries forward to next year as a section 179 carryover (not a credit). One thing to double-check: make sure all your "other expenses" are legitimate business deductions. Sometimes reclassifying certain items or splitting purchases between section 179 and regular deductions can optimize your total tax benefit. The IRS is pretty strict about the business income limitation - it's designed to prevent section 179 from creating losses that offset other income.

Has anyone tried using inventory management software for tracking this stuff? I'm in a similar situation and trying to figure out if I should invest in some software to make this easier. Currently just using spreadsheets but it's getting messy with all these rebates and credits.

This is exactly the kind of situation that trips up a lot of small business owners! I went through something very similar with my own reselling business last year. One thing that really helped me was creating a simple tracking system where I log three things for each item: 1) actual purchase price, 2) rebate received (and when), and 3) how that rebate was used. This way I can clearly see the cost basis for each item regardless of how it was paid for. For your $25 item example, I'd record the COGS as $25 when sold, then track the $25 rebate credit separately until it's used. When you use that credit to buy another item, that new item gets its own cost basis (which might be $0 out-of-pocket but still has value for tax purposes). The key insight for me was realizing that rebates don't reduce the cost of the original item - they're essentially prepayment for future purchases. Once I started thinking about it that way, the accounting became much clearer. Keep detailed records of everything and you should be fine!

Dont forget about the qualified business income deduction (QBI) on Section 199A! If your reporting income on Schedule C you might qualify for this extra 20% deduction even if you have expenses that offset most of the income. Could actually work in ur favor!!!!

This is a really helpful thread! I'm dealing with a similar situation where I got a 1099-NEC for what should have been expense reimbursements. Based on all the advice here, it sounds like Schedule C is the way to go to offset the income with the actual expenses. One question though - when reporting the expenses on Schedule C, do I need to follow the specific IRS categories (like separating meals at 50% deductible vs. full transportation costs), or since these were direct reimbursements can I just list them as "Other expenses" with a description? I want to make sure I'm not overcomplicating this but also want to be completely accurate in case of any questions later. Also really appreciate the suggestions about taxr.ai and Claimyr - it's reassuring to know there are resources available when you need specific guidance on these tricky situations!