


Ask the community...
Don't forget about the annual gift tax exclusion too! It's currently $17,000 per recipient per donor (2023 amount, will be adjusted for inflation). So you and your spouse could each give $17k to each of your kids/grandkids each year without touching your lifetime exemption at all. For a family with several children and grandchildren, this can add up to substantial wealth transfer over time.
Is the annual exclusion in addition to the lifetime amount? And does it make sense to use the annual exclusion first before dipping into the lifetime amount for larger gifts?
Yes, the annual exclusion is completely separate from your lifetime exemption. You can give up to the annual limit ($17,000 per recipient in 2023) each year without filing a gift tax return or using any of your lifetime exemption. It absolutely makes sense to use the annual exclusion every year before making larger gifts that would use your lifetime exemption. Think of the annual exclusion as "use it or lose it" - if you don't use it in a given year, that opportunity is gone. Many wealthy families make a practice of giving the maximum annual amount to each family member every year as part of their estate planning strategy.
Make sure you're also considering state-level estate taxes! Not all states follow federal exemption amounts. I live in a state with a much lower estate tax threshold, and didn't realize I needed separate planning for state vs federal.
Which states have their own estate or gift taxes? I thought most followed the federal rules.
Currently 12 states plus DC have their own estate taxes with lower exemption thresholds than federal: Connecticut, Hawaii, Illinois, Maine, Maryland, Massachusetts, Minnesota, New York, Oregon, Rhode Island, Vermont, and Washington. The exemptions range from $1 million (Oregon) to $12.9 million (Connecticut). Some states like New York have a "cliff" effect where if you exceed the threshold by even a small amount, you lose the entire exemption. Additionally, only Connecticut and Minnesota have state-level gift taxes that mirror their estate tax exemptions. It's definitely worth checking your state's specific rules!
Had the exact same issue with Error 6000 last month! What finally worked for me was calling the Taxpayer Advocate Service at 1-877-777-4778. They're separate from regular IRS customer service and can actually escalate account restrictions. Takes about 2-3 weeks but they resolved mine without needing an office visit. Definitely worth trying before making that 2 hour drive!
Has anyone used TaxAct or FreeTaxUSA for reporting sublease income? TurboTax seems to be giving conflicting advice but I'm wondering if other tax software handles this situation better? I only sublet my place for about 2 months while I was away for work.
I used FreeTaxUSA last year for a similar situation. It worked well because it let me file Schedule C easily. You just need to categorize your activity as "rental services" or something similar, not as rental property. I found their interview process more flexible than TurboTax for situations that don't fit the standard boxes.
I went through this exact same situation last year with Airbnb hosting in my rented apartment. The confusion between Schedule E vs Schedule C is really common because most tax software assumes you own property when you're earning rental income. What helped me was understanding that Schedule E is specifically for "passive" rental income from property you own, while Schedule C is for "active" business income - which is what subleasing really is since you're actively providing housing services. One tip that saved me money: keep detailed records of everything during your sublease period. Beyond just rent and utilities, you can deduct things like extra cleaning supplies, any furnishings you bought specifically for the sublet, advertising costs if you used Airbnb/Craigslist, and even a portion of your internet bill if your subletter used WiFi. Also, that $150 fee you paid to your landlord for permission? That's definitely a deductible business expense since it was necessary to conduct your subletting activity. Make sure to include that on your Schedule C.
This is really helpful! I'm new to this whole situation and didn't realize there were so many deductible expenses beyond just rent. Quick question - when you say "advertising costs" for Airbnb, do you mean the service fees that Airbnb charges hosts? Or are you talking about something else like promoting your listing? Also, how do you calculate the internet portion? Is it just based on the same percentage you use for rent (like the room size calculation) or is there a different way to figure that out?
Has anyone actually gotten their refund after going through all this identity theft mess? I filed my 14039 almost 7 months ago and still nothing. The identity theft PIN came after 4 months but no movement on my refund.
I got mine after 9 months last year. It was a nightmare but the money did eventually come through with interest. The key for me was getting someone on the phone around the 6-month mark who could verify it was still in process and hadn't been lost or forgotten.
That's somewhat reassuring, thanks. 9 months is ridiculous but at least you got interest on it. Did you have to do anything special to keep the case moving, or did it just resolve on its own after you confirmed it was still in process?
I'm going through this exact same situation right now - filed my 14039 about 8 weeks ago after getting the duplicate e-file rejection. The waiting and uncertainty is absolutely maddening! One thing that's helped me manage the stress is setting up alerts on my IRS account online (if you can access it) and checking the "Where's My Refund" tool weekly, even though it probably won't show updates for identity theft cases. I also started keeping a detailed log of every call attempt, reference numbers, and any correspondence - it makes me feel like I'm doing something productive while waiting. @Isabella Silva - have you tried reaching out to your local Taxpayer Advocate Service office? They can sometimes help expedite cases that have been stuck in the system for an unreasonable amount of time. The 10-week mark might be worth giving them a call, especially since you're experiencing financial hardship waiting for your refund. Hang in there - from everything I've read here, it sounds like persistence pays off eventually, even though the timeline is frustratingly long.
StarSailor
Anyone know if the standard mileage rate is still 65.5 cents per mile for 2025? I'm tryng to estimate my deductions for next year.
0 coins
Connor O'Brien
β’The IRS hasn't announced the 2025 rate yet. They usually do it in December of the previous year. But based on how gas prices have been, I'd expect it to be around 67-70 cents per mile.
0 coins
Malik Johnson
Great question! I've been in a similar situation with my rental properties. The key principle is that you can only deduct the actual miles you drove, not multiply them by the number of properties visited. For your 15-mile round trip to work on both units, you should allocate those miles between the properties rather than claiming the full amount for each. Since you spent 2 hours at Unit A and 1 hour at Unit B, a reasonable allocation would be 10 miles to Unit A (2/3 of the trip) and 5 miles to Unit B (1/3 of the trip). This allocation method is defensible because it's based on the actual time spent at each property. You could also do a 50/50 split if the work was roughly equal in importance. The IRS cares more about having a reasonable, consistent method than the exact formula you use. Make sure to document your allocation method and keep good records showing the date, purpose of the trip, properties visited, and how you divided the mileage. This will help if you're ever questioned about your deductions. Whatever you do, don't claim the full 15 miles on both Schedule E forms - that would definitely be improper double-counting that could trigger problems with the IRS.
0 coins