Does anyone know if replacing just the condenser unit of an HVAC system counts as a capital improvement or a repair? I had to replace just that part last year on my rental and wasn't sure how to classify it for depreciation purposes.

The key thing to remember is that depreciation recapture isn't necessarily a bad thing - it's just the IRS collecting on the tax benefit you already received. When you took those depreciation deductions on your HVAC system over the past 3 years, you reduced your taxable income each year. Now when you sell, you'll pay tax on that depreciation at a maximum rate of 25% (which is often lower than your regular income tax rate). Here's a simple way to think about it: Let's say you've claimed $2,000 in depreciation on that HVAC system so far. When you sell, you'll owe recapture tax on that $2,000 at up to 25%. But you got to deduct that $2,000 from your income in previous years, possibly at a higher tax rate. Plus, you got the time value of having that tax savings earlier. For calculating your potential liability, you'll need to know exactly how much depreciation you've claimed on the HVAC system (and any other capital improvements). Your tax software or records should show this. The recapture amount will be taxed as ordinary income up to 25%.

One thing I'd add that hasn't been mentioned yet - make sure you understand the timing of when you can claim these deductions. Since this is new construction, you'll typically claim the medical expense deductions in the tax year when the house is completed and you move in, not when you pay for construction draws throughout the building process. Also, if you're financing the construction, only the actual out-of-pocket costs for the medical modifications count toward your medical expense deduction - you can't deduct the portion that's financed until you actually pay it. This caught me off guard when we built our accessible home. Keep a separate ledger tracking just the medical-related accessibility costs as construction progresses. It'll make tax time much easier and help if you ever need to provide documentation to the IRS. Having everything organized from the start is way better than trying to sort through months of construction invoices later!

One additional resource that might help - the National MS Society actually has a tax guide specifically for people with MS that covers home modifications and new construction. I used it when we were dealing with similar questions for my sister's accessible home build. They break down exactly what documentation you need from your neurologist and how to work with contractors to get the cost breakdowns the IRS wants to see. The guide also has sample letters you can use to request the medical necessity documentation from your doctor. You can find it on their website under resources for financial assistance. It's much more detailed than the general IRS publications when it comes to MS-specific accommodations. Since you mentioned your MS has progressed to needing these accommodations, having MS-specific guidance really helped us understand which features were most likely to qualify and how to present them properly on the tax return. Good luck with your build! It's so worth it to have a home that truly works for your needs.

Don't make the mistake I did last year! I bought all new appliances and just assumed they qualified, but didn't keep the proper documentation. My tax preparer said I needed the Manufacturer's Certification Statement proving they meet the energy requirements, but I had thrown everything away. Ended up not being able to claim anything. 😭

This is exactly the kind of situation where it's worth doing some research before assuming you'll get tax benefits. I learned this the hard way when I bought a new HVAC system thinking I'd get huge credits, but ended up only qualifying for a fraction of what I expected. The key thing to understand is that the current federal energy credits are very specific about what qualifies. Most standard kitchen appliances (even Energy Star ones) don't make the cut anymore. The credits now focus mainly on heating/cooling equipment like heat pumps, water heaters, and home insulation improvements. If you still have your receipts and documentation, I'd suggest checking if any of your purchases were heat pump technology (like a heat pump dryer or water heater). Those are more likely to qualify. Also, definitely look into your state and local utility programs - sometimes those can be more generous than federal credits for regular appliances. Keep all your paperwork including energy efficiency ratings and model numbers. Even if they don't qualify for federal credits, you might find rebate programs you weren't aware of!

Just a heads-up to everyone waiting on ERTC checks - be prepared for potential delays beyond the 4-6 weeks mentioned in the letter. Our small business got our processing letters in January, but the actual checks didn't arrive until mid-March (about 9 weeks later). The IRS is still working through a huge backlog of these claims.

I can share some insight from our experience with ERTC refunds last year. We filed 941-X forms for 4 quarters and were in a similar situation wondering about the refundable vs non-refundable portions. The key thing to understand is that once you've already paid your employment taxes for those quarters (which you have since these are from 2020-2021), the IRS treats the entire ERTC amount as an overpayment refund. So yes, you should receive both the refundable and non-refundable portions in your checks. However, I'd echo what others have said about the timeline - don't count on exactly 4-6 weeks. Ours took about 8 weeks to arrive, and they came as separate checks for different quarters rather than one lump sum. Also make sure your mailing address is current with the IRS because these are paper checks, not direct deposits. One tip: when the checks do arrive, verify the amounts against what you claimed on your 941-X forms. We had one quarter where they made a calculation error that we had to call about (which was its own adventure trying to reach them). But overall, the process worked as expected once we understood that both portions would be refunded.

mine took 6 months to unfreeze last year. hang in there!

I feel your pain! I had a similar situation with my 2021 return - code 810 freeze that lasted forever. The zero AGI showing on your transcript is definitely a red flag that might be triggering additional reviews. Have you checked if all your W-2s and 1099s were properly reported? Sometimes mismatched income info can cause these extended freezes. Also try calling the practitioner priority line early morning (7am) - I had better luck getting through that way. Keep us posted on any updates!