This is such a helpful thread! I'm dealing with a similar situation but with a twist - we lived in our house for 2 years, then moved out and rented it for 1.5 years, then moved BACK in for another year before converting it to a rental again for the past 2 years. From what I'm reading here, it sounds like only that first rental period (the 1.5 years before we moved back) would count as "non-qualified use" since it happened before our final period of primary residence use. The recent 2-year rental period after we moved out for good wouldn't count against the exemption. Does that sound right? This Publication 523 stuff is so confusing with all the back-and-forth living situations. I'm wondering if I should try one of those services mentioned here to get a proper analysis before I make any assumptions about my tax liability.

I'm a tax professional and want to clarify something important that's been mentioned but might get lost in all the discussion - you absolutely need to keep detailed records of your occupancy periods and rental periods. The IRS can and will ask for proof if they audit this exemption. Beyond just utility bills and lease agreements, consider keeping: property tax records showing homestead exemptions during primary residence periods, insurance changes from homeowner's to landlord policies, any correspondence with property management companies, bank statements showing rental income deposits, and maintenance records that distinguish between personal use improvements versus rental property expenses. Also, while everyone's focused on the non-qualified use rules (which are correctly explained here), don't forget about mixed-use periods. If you ever lived in part of the property while renting out another part (like a basement apartment), those calculations get even more complex and you'll want professional help. The Publication 523 confusion is real - I deal with CPAs who misunderstand these rules regularly. When in doubt, get a professional opinion before you file, especially if your gain is substantial. An audit on a six-figure gain exclusion is not something you want to wing.

One important thing to consider that I haven't seen mentioned - as a W-2 employee, you get certain legal protections that 1099 contractors don't have. This includes workers' compensation if you're injured on the job, unemployment benefits if they let you go, and protection under labor laws. As a 1099, you're essentially running your own business, which means you need to handle your own liability insurance and you won't qualify for unemployment if the relationship ends. This is a big consideration beyond just the tax implications.

Great question! I went through this exact decision last year when I started doing real estate work. Here's what I learned: The math really depends on your total business expenses. As a 1099, yes you'll pay the full 15.3% self-employment tax, but you can deduct SO much more - mileage (huge for real estate!), home office, phone, internet, marketing materials, continuing education, even meals with clients. One thing that helped me decide: I calculated my expected annual income and business expenses, then ran the numbers both ways. For me, the deductions saved more than the extra 7.65% in self-employment tax cost me. But also consider the non-tax factors - as others mentioned, you lose unemployment protection and workers comp as a 1099. However, you gain flexibility in how you work and when you work, which is valuable in real estate where you might need to show properties at odd hours. My advice: start tracking ALL your potential business expenses now (even before you decide) for a month or two. That will give you real numbers to work with instead of guessing. If your monthly business expenses are significant, 1099 is probably better. If they're minimal, W-2 might be the safer choice. Either way, definitely consult with a tax professional who understands real estate before making the switch!

I had my verification appointment on February 12, 2024, and my refund was deposited on March 8, 2024 - exactly 25 days later. My transcript updated on March 1 showing the release of the verification hold. I brought my driver's license, passport, social security card, W-2, last year's tax return, and a utility bill. The agent said I was overprepared but that it made the process smoother. Check your transcript on April 15 and April 22 - those should be key update dates based on your Monday appointment timing.

The timeline really varies, but here's what I've learned from going through this process twice. After my verification appointment, it took about 3 weeks for my transcript to update with code 971/571 showing the identity hold was released. Then another 2 weeks for the actual refund to hit my account - so 5 weeks total. Key things that helped speed mine up: - Brought original documents (not copies) - Had my AGI from last year memorized - Asked the agent to notate my file that verification was successful The 9-week timeframe is their maximum, but most people I know got theirs between 3-6 weeks. Keep checking your transcript on Wednesdays - that's when most updates happen. And don't stress if WMR still shows "processing" - it's notoriously slow to update after verification appointments. Good luck with your appointment Monday! The plumbing gods will hopefully smile upon your refund timing 🔧

Accountant here. Many employers mess up state withholding after employee relocations. The W2C may take months - I've seen them take until August or September in some cases! If you're getting a refund, file now and amend later. If you'd owe money, definitely file an extension and wait for the W2C. The April deadline is about PAYING not filing - as long as you pay what you owe, the extension to file is automatic and penalty-free.

I'm dealing with almost the exact same situation right now! Moved from Massachusetts to Florida in late 2023, and my employer kept withholding MA state taxes for months after I relocated. The frustrating part is that Massachusetts has a 5% flat rate while Florida has no state income tax, so I've been massively overpaying. Based on what everyone's shared here, I think I'm going to go ahead and file my return as-is this week. The math works out that I'll get a substantial refund just from the federal side, and then when I finally get my W2C (whenever that happens), the Massachusetts refund will just be a nice bonus later in the year. Has anyone had experience with Massachusetts specifically for this type of amendment? I know some states are more complicated than others when it comes to part-year resident returns and corrected withholding.

Just to add another perspective - I'm a convenience store owner who deals with lots of cash. Form 8300 is really meant for large cash transactions that might be suspicious. The IRS and FinCEN are looking for potential money laundering, not legitimate small business income. For your freelance work, what matters more is: 1. Keeping good records (which you're doing with your spreadsheet) 2. Reporting all income on your tax return (Schedule C) 3. Making estimated tax payments (which you're also doing) The Form 8300 requirement is really aimed at detecting large cash transactions like someone buying a car with $15k in cash, not multiple small legitimate transactions from different people.

WARNING: One thing nobody has mentioned yet is that even if Form 8300 doesn't apply, banks are still required to file Suspicious Activity Reports if they think you're depositing cash in a way that seems designed to avoid reporting requirements. If you deposit $9,999 in cash, that looks very suspicious. Even making regular cash deposits that seem timed specifically to stay under $10k could potentially raise flags. I'd recommend being very transparent with your bank about the source of your cash income. Maybe even talk to a bank manager to explain your business so they understand why you're making regular cash deposits.