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The IRS is such a joke fr fr... They expect us to pay on time but take 10 years to send refunds š¤”
Have you tried checking your account transcript instead of just the return transcript? Sometimes the account transcript shows processing activity even when the return transcript is blank. Also, if you filed in February and verified ID in March, you're definitely within the timeframe where it could still be processing normally - the IRS is still working through returns from that period. Don't panic yet!
Has anyone used turbotax self-employed for their subcontractor taxes? wondering if its worth the money or if i should just hire an accountant instead for my first year. nervous about missing deductions but also don't want to spend a fortune on an accountant if the software is good enough.
I've used TurboTax Self-Employed for the past 3 years as a subcontractor. It's actually pretty decent and asks you all the right questions about vehicle expenses, tools, etc. I'd recommend using it your first year to learn what deductions are available, then decide if you want an accountant later. Just set aside 2-3 hours to go through it carefully and have all your receipts organized beforehand.
Great question! As someone who's been through this exact situation, I can confirm that both your vehicle and tools are definitely deductible as business expenses when you're self-employed. For the $18,000 vehicle, you'll want to keep detailed records of your business vs personal use. Since you mentioned 90% business use, that's excellent for maximizing your deduction. The key is choosing between standard mileage (currently 65.5 cents per mile) or actual expenses - whichever gives you more. With a newer vehicle, actual expenses including depreciation might be better initially. For your $2,500 in tools, you're in luck! Most of these will likely qualify for immediate deduction under the Section 179 election, which allows you to write off the full cost in the year of purchase rather than depreciating over time. This is especially helpful when you're starting out and want to reduce your tax burden right away. My advice: open a separate business bank account immediately and use a business credit card for all work purchases. This makes tracking expenses so much easier come tax time. Also consider using a mileage tracking app from day one - you'll thank yourself later when you have detailed records instead of trying to reconstruct your driving patterns. The investment in good record-keeping from the start will save you headaches and potentially thousands in missed deductions!
This is really encouraging to hear! I had a similar situation last year with the 570 and 768 codes after moving from PATH to processing. The 570 hold lasted exactly 19 days in my case, and then I saw the 571 code appear on my transcript indicating the hold was released. My refund was deposited 5 days after that. Since you mentioned amending paperwork earlier, the 570 could definitely be related to that - they sometimes need to verify amended information even after initial processing. The good news is that without a 971 code, they're not requesting anything additional from you. Just keep monitoring your transcript weekly, and you should see movement soon!
Thanks for sharing your experience! It's really helpful to hear specific timelines from someone who went through the same thing. 19 days for the 570 hold and then 5 days for the actual refund deposit gives me a good idea of what to expect. I'm definitely going to keep checking my transcript weekly like you suggested. Did you notice any other changes on your transcript during those 19 days, or did it stay pretty static until the 571 code appeared?
I'm going through something very similar right now! My WMR just switched from PATH to processing yesterday, and I also have the 570 and 768 codes on my transcript. It's reassuring to see others have experienced this exact combination. From what I've been reading, the 570 code with EIC (768) seems pretty standard during the PATH Act verification period. I'm hoping mine resolves as quickly as some of the experiences shared here. Has anyone noticed if the day of the week matters for when transcript updates occur? I've heard they typically update on certain days, but I'm not sure if that's accurate.
Yes, transcript updates typically happen on specific days based on your cycle code! Most people see updates on Thursdays or Fridays, but it depends on your individual processing cycle. You can find your cycle code on your account transcript - it's usually a 4-digit number that indicates when your account gets reviewed. Weekly cycles end in 01-04 and get updated weekly, while daily cycles end in 05 and can update more frequently. Since you just moved from PATH to processing yesterday, you're probably looking at seeing your next update within the next week or two. The timing really does seem to follow a pattern once you understand your cycle!
Has anyone used TurboTax to handle this Form 8959 stuff? Does it calculate everything automatically or do I need to figure out the Additional Medicare Tax manually? I'm getting really confused with all these extra forms.
TurboTax handles Form 8959 calculations automatically. As long as you enter all your W-2s and 1099s correctly, it'll determine if you need this form and fill it out for you. It's actually one of the easier things to deal with in tax software because it's just a straight calculation based on your income.
I went through this exact same situation last year and it was so confusing at first! The Additional Medicare Tax is basically a "luxury tax" on higher earners - it's 0.9% on income above $250k for married filing jointly. What probably happened is you and your spouse's combined wages crossed that $250k threshold, but your employers didn't withhold enough because they only look at individual wages (they start withholding the extra 0.9% when someone individually makes over $200k). So you end up owing it at tax time. The $1,350 on line 24 that flows to line 25c is legit - you do have to pay it. But for next year, you can avoid the surprise by either having extra tax withheld from your paychecks or making quarterly estimated payments. I had my employer withhold an extra $100 per paycheck and it covered it perfectly this year. Don't stress about it - it's just part of the tax code for higher income households. The IRS Publication 15 has more details if you want to dive deeper into how it's calculated.
This is such a helpful explanation! I'm actually in a similar boat - my husband and I just crossed the $250k threshold for the first time this year and I had no idea this Additional Medicare Tax even existed. It's good to know it's normal and not some kind of penalty or mistake on our return. The idea about having extra withholding is really smart. Did you just tell your payroll department to withhold an extra $100 per pay period, or did you have to fill out a specific form? I want to make sure I get this set up correctly so we don't get hit with a big surprise again next year.
Freya Collins
One thing not mentioned yet is the collateral estoppel effect of Tax Court decisions. Even if you somehow found a way to get into district court, the court would likely hold that you're estopped from relitigating issues already decided in Tax Court. I learned this the hard way. Lost in Tax Court on some investment losses, then tried filing a refund claim based on a slightly different legal theory, thinking I could get to district court that way. Ended up wasting thousands on attorney fees just to be told I was blocked by the prior decision.
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LongPeri
ā¢Does collateral estoppel apply to different tax years though? Like if the Tax Court ruled on my 2022 taxes, could I take a similar issue for my 2023 taxes to district court instead?
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Freya Collins
ā¢Great question. Collateral estoppel generally doesn't prevent you from litigating a similar issue for a different tax year in a different court. Each tax year is considered a separate cause of action. However, if the exact same legal issue was decided in the prior case, the legal conclusion (not the factual findings) might still have precedential effect. But if there are different facts or if the law has changed, you could potentially get a different result in district court for the new tax year.
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Oscar O'Neil
Wait I'm confused... is it actually better to pay the tax and file for a refund so you can go straight to district court instead of tax court? I have a case where IRS disallowed some charitable contributions (about $13k in deductions) and I'm trying to figure out the best court to take this to.
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Sara Hellquiem
ā¢Yes! This is exactly what my tax attorney advised. Pay first, then file for refund so you can go to district court. The judges there apparently are more taxpayer-friendly than Tax Court judges who deal with IRS cases all day. Tax Court supposedly sides with IRS like 80% of the time.
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Carmen Vega
ā¢@Sara Hellquiem That 80% statistic sounds high - do you have a source for that? I ve'heard mixed things about which court is better for taxpayers. For charitable contributions specifically, you might want to consider that Tax Court judges see these cases frequently and understand the documentation requirements better. District court judges handle all kinds of cases and might not be as familiar with the nuances of charitable deduction rules. Also remember that if you pay first to go to district court, you re'out that money upfront could (be substantial depending on your tax bill and) there s'no guarantee you ll'win the refund case. In Tax Court, you can litigate without paying first. For a $13k deduction dispute, the financial impact of paying upfront might be worth considering in your strategy.
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