i messed this up last year and got audited!!! make sure ur using cash accounting not accrual. sounds like u want cash method so u can deduct when u pay not when u get the stuff. my tax guy says most of us freelancers use cash method anyway its easier

This is a great question that trips up a lot of freelancers! Since you're filing Schedule C as an independent contractor, you're almost certainly using the cash method of accounting (unless you specifically elected accrual method with the IRS, which is rare for freelancers). With cash method accounting, you deduct business expenses in the tax year you actually make the payment, not when you receive the goods or services. So in your case, if you take the equipment home this weekend but don't pay until January/February 2025, you would claim this $2,800 deduction on your 2025 tax return. Just make sure to keep detailed records of: - The purchase agreement showing the buy-now-pay-later terms - When you actually received the equipment - All payment receipts when you start making payments in 2025 This timing strategy is perfectly legitimate and sounds like it aligns well with your tax planning goals. The key is being consistent with your accounting method and having good documentation to support the timing of your payments.

Your probably gonna see it next week or the week after. 05 usually means everything else is straight and their just finishing up. Unless you got other codes that need to clear first

Congrats on getting the 05 cycle! That's definitely progress. From what I've seen in this community, most people with 05 cycles see their 846 code within 2-3 weeks, but it really depends on if you have any other issues on your account. Check your transcript Friday mornings since that's when the weekly updates typically post. Fingers crossed you see that 846 soon! 🤞

Just FYI, since your income is so low, you might not even be required to file taxes at all. But you should definitely still file because if you had ANY taxes withheld from your paychecks you'll get all of that back as a refund since you won't owe any taxes. Look at your W-2 form in box 2 - if there's any amount there, that's money you'll get back!

Be careful with claiming the standard deduction if anyone can claim you as a dependent! If your parents are claiming you on their taxes, the rules are different. Are you a dependent on someone else's return?

Oh my gosh, I'm dealing with this RIGHT NOW and it's SO frustrating!!! 😤 My DDD was yesterday (2/25) and nothing in my account! Called Tax Act and they basically said "wait 1-5 business days after your DDD" which feels like FOREVER when you're counting on that money! I wish I had just paid the stupid fees upfront instead of trying to save a few bucks. Now I'm checking my account every hour like a crazy person. Never doing this again!

I went through this exact situation two years ago and learned some helpful tricks! While you're waiting for your refund to come through the Tax Act processing, here are a few things that might help: 1. Set up account alerts with your bank so you get notified the moment any deposit hits (saves you from constantly checking) 2. Tax Act usually sends an email when they release funds to your account - watch for that confirmation 3. The processing typically happens during business hours, so don't expect weekend movement For future reference, some tax prep companies offer a "pay with refund" option that's faster than the traditional refund transfer. TurboTax and FreeTaxUSA both have versions that cut the delay down to about 1 day instead of 2-3. The good news is that once it's in the system, the money will definitely come through. It's just the waiting that's brutal when you need those funds! Hang in there - you should see movement by early next week given your 2/26 DDD.

Thanks for bringing up this complex interaction between Form 8978 and AMT calculations. I've seen this exact scenario several times this year and it's definitely confusing at first glance. What you're experiencing is correct - the software is properly applying the tax law. The Form 8978 adjustment creates a credit that reduces your regular tax liability, but AMT is calculated independently using its own set of rules on Form 6251. When the regular tax (after the 8978 credit) falls below the AMT liability, the AMT kicks in as intended. One thing to double-check: make sure your client doesn't have any AMT credits from prior years that could offset this current AMT liability. Also, if this is a significant ongoing issue for your client, you might want to explore estimated payment strategies for next year to avoid underpayment penalties, since the AMT calculation might not be captured in their usual payment routine. The interaction between partnership audit adjustments and AMT has been a real headache since the centralized partnership audit regime was implemented. At least now the IRS instructions are starting to acknowledge these scenarios more clearly.

This is a great discussion on a really tricky area of tax law. I've been dealing with these Form 8978/AMT interactions more frequently lately and wanted to add a few practical tips that have helped me: First, when explaining this to clients, I find it helpful to frame it as the AMT serving as a "safety net" that prevents their total tax from going too low, even with legitimate credits. The Form 8978 credit still provides value - it's just capped by the AMT floor. Second, for planning purposes, I've started including a note in my client files when they receive partnership K-1s to flag potential future AMT issues if there are audit adjustments. This helps set expectations early. One thing I haven't seen mentioned yet is the timing aspect - if your client is facing a large AMT liability due to the 8978 adjustment, make sure to review their estimated payment requirements for the current year. The AMT can create unexpected underpayment scenarios since most clients don't factor it into their quarterly estimates. Also, if anyone is dealing with multi-year adjustments (where the 8978 affects multiple tax years), the AMT interactions can get even more complex. In those cases, I've found it's worth running scenarios for each affected year to see if there are any planning opportunities around the timing of when to file the adjusted returns.