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I know this is a little different from the original question, but I wanted to add that you should also check if your son qualifies for the Premium Tax Credit if he purchased his insurance through the Marketplace. This could be MORE valuable than the self-employed health insurance deduction in some cases, but you have to choose one or the other. Definitely run the numbers both ways - sometimes the PTC is better, especially for lower income levels. But if his 1099 income is substantial, the self-employed health insurance deduction might be better since it reduces both income tax AND self-employment tax.
Thank you for this suggestion! I didn't even think about the Premium Tax Credit. He did purchase his insurance through the Marketplace. Would we need to use Form 8962 to figure this out? And is there an easy way to compare which would be more beneficial?
Yes, you'll need Form 8962 to calculate the Premium Tax Credit. The easiest way to compare is to calculate your taxes both ways - once with the self-employed health insurance deduction and once with the PTC. Most tax software can help you with this comparison. The PTC is generally more beneficial for lower income levels (especially below 400% of the federal poverty level), while the self-employed health insurance deduction tends to be better for higher incomes since it reduces both income tax and self-employment tax. For someone with mixed income like your son, it really depends on his specific numbers, so calculating both scenarios is the best approach.
One thing nobody mentioned - if your son is under 27, could you possibly cover him under YOUR health insurance instead? Might be cheaper than what he's paying, and then this whole deduction issue becomes moot. Just a thought!
This is actually a great point. Many people forget that the ACA allows children to stay on parents' health insurance until age 26. Could save a lot of money and tax complexity!
That's a really smart suggestion! Even if he's already 26 or older, it might be worth checking if your employer offers dependent coverage up to a certain age - some plans extend beyond the ACA minimum. Also, if he's a full-time student, some plans allow coverage even longer. The savings could be significant, especially since $3,800 annually is pretty reasonable for individual coverage but might be much less expensive as a dependent on a family plan.
I messed up my rental condo depreciation last year using the town's weird assessment numbers. My accountant caught it before filing and said the 0.4% land allocation I calculated would absolutely trigger an audit. She helped me get the correct numbers from our condo docs (it was actually 16%). One thing nobody mentioned - with condos you're depreciating the interior structure plus your percentage interest in common elements, but NOT the land. That's why the allocation is so important. My accountant said this is one of the most common errors for first-time landlords with condos.
Thanks for mentioning this! Would you mind sharing what your accountant charged to help with rental property tax prep? I'm trying to decide if I should hire someone or just use tax software.
This is exactly the kind of situation where getting professional help upfront saves you headaches later. I made similar mistakes with my first rental property and learned the hard way that municipal assessments are often completely unreliable for depreciation purposes. Your 0.35% land allocation is definitely a red flag. Even for condos, anything under 10% typically raises eyebrows. The IRS expects reasonable allocations, and yours is so far outside normal ranges that it could trigger automatic review. Here's what I'd recommend based on my experience: 1) Check your original purchase documents - sometimes the land/building split is mentioned in the settlement statement or appraisal 2) Contact your condo association for official documentation of the land allocation percentage 3) If neither yields results, use a conservative 15-20% allocation and document your reasoning Remember, you're not just depreciating your unit - you're also depreciating your proportional share of common areas (hallways, lobby, etc.) but excluding the land value. Using $720k as your basis is correct regardless of current value. Better to be slightly conservative with your depreciation than to deal with an audit over unrealistic numbers!
This is really helpful advice! I'm dealing with a similar situation on my first rental property and didn't realize how important getting the right documentation would be. Quick question - when you mention checking the original purchase documents, should I be looking at the HUD-1 settlement statement specifically, or are there other documents from closing that might have this information? My closing was a bit of a blur and I'm not sure what paperwork might be relevant for the land allocation.
My sister dealt with this exact situation! Her husband was in the Philippines while she was in the US with their son. The IRS actually flagged her return for review when she filed as Head of Household because they had record of her marriage from the I-130 petition. She had to provide extra documentation showing she qualified as "considered unmarried" for tax purposes. Just something to be aware of!
What kind of documentation did she need to provide? I'm in a similar situation and getting worried about potential audits.
She had to provide proof that she lived apart from her spouse for the last 6 months of the tax year (lease agreements, utility bills in her name only), documentation showing she paid more than half the household expenses (bank statements, receipts), and proof of her child's residence with her (school records, medical records). She also included a copy of the I-130 petition and evidence that her husband had no US income. The key was showing she met all the "considered unmarried" requirements despite being legally married. It took about 3 months to resolve, but she ultimately got approval for HOH status.
This is such a stressful situation, but you're definitely not alone in dealing with this confusion! Based on what you've described, you have a few paths forward: Since your husband is living abroad and you're supporting your daughter, you might actually qualify for Head of Household if you can demonstrate that you're "considered unmarried" for tax purposes. This requires living apart from your spouse for the last 6 months of the tax year and paying more than half the costs of maintaining your home. However, given the complexity with the I-130 petition and potential IRS scrutiny (as others have mentioned), Married Filing Separately might be the safer route to avoid any flags or requests for additional documentation. For the address issue with your husband's country not using postal codes - you can write "Foreign" in the ZIP code field or use "00000" as many tax software programs require something in that field. Definitely amend last year's return from Single to the correct status. The IRS is pretty understanding about honest mistakes, especially in complex immigration situations like yours. Have you considered consulting with a tax professional who specializes in international tax situations? They might be able to run the numbers both ways (HOH vs MFS) to see which gives you the better outcome while minimizing audit risk. Hang in there - tax season is stressful enough without immigration complications!
This is really helpful advice! I'm actually in a somewhat similar boat - married to someone abroad but been living separately for over a year now with my kid. I never thought about the "considered unmarried" status before reading this thread. One thing I'm curious about - you mentioned that MFS might be safer to avoid IRS scrutiny, but wouldn't that mean missing out on potentially better tax benefits from HOH status? I'm trying to weigh the risk vs reward here. Has anyone actually had problems with the IRS when legitimately qualifying for HOH with a spouse abroad? Also, the tip about using "Foreign" or "00000" for the postal code is super practical - I was stressing about that exact detail!
If your return was accepted but now says "we may need more information," check if you claimed any of these credits, as they often trigger additional review: - Earned Income Tax Credit - Child Tax Credit - American Opportunity Credit - Premium Tax Credit (for health insurance) My return was held up last year because of EITC verification. Took almost 8 weeks total but eventually processed without me needing to do anything.
I work for a tax prep company, and EITC claims are getting extra scrutiny this year. The IRS is definitely taking longer on refunds involving credits. We're seeing average wait times of 5-6 weeks for returns with credits compared to 2-3 weeks for simpler returns.
I'm going through almost the exact same situation! Filed through FreeTaxUSA about 5 weeks ago, got the initial acceptance, then that dreaded "we may need more information" message appeared. Haven't received any mail yet either. Reading through these comments has been incredibly helpful - I had no idea about the identity verification delays when switching from a professional preparer to self-filing. That's probably exactly what's happening since we used H&R Block last year. The 21-30 day processing time Brandon mentioned gives me some peace of mind that we're still within normal range, even if it feels like forever when you're counting on that refund. Going to check out that Treasury Offset Program number Axel mentioned just to rule out any debt issues, and might try the taxr.ai tool if we don't hear anything in another week or two. Thanks everyone for sharing your experiences - makes me feel a lot less alone in this waiting game!
William Rivera
Anyone know if the 2025 tax law changes will affect this at all? I heard some suspended deductions are coming back.
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Emily Sanjay
โขYou're right! The current law has the TCJA provisions sunsetting after 2025, which means miscellaneous itemized deductions subject to the 2% AGI floor are scheduled to return in 2026. If that happens, employees might once again be able to deduct unreimbursed employee business expenses, including certain legal fees related to their employment. Of course, Congress could always extend the current rules or make other changes before then, so it's something to keep an eye on as we get closer to that date.
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NebulaNomad
I went through something very similar last year and ended up working with a tax attorney who specializes in employment-related legal expenses. One thing that really helped my case was documenting exactly how the harassment was impacting my work performance and income potential. The key distinction the attorney explained is whether the legal fees were incurred to protect your ability to earn income versus just for personal protection. In my case, I had to show that the restraining order was necessary to maintain my employment and earning capacity, not just for general safety. We ended up being able to deduct about 60% of the legal fees on my California return by arguing they were directly related to income production. The documentation was crucial - I had emails showing how the harassment was affecting my work, performance reviews that mentioned the impact, and even some lost client interactions due to the situation. Worth noting that California's rules are more favorable than federal right now, so definitely explore both angles if you're in CA. The investment in getting proper tax advice paid for itself in my case.
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