Don't forget to keep copies of EVERYTHING you send them! I made the mistake of sending my only copies of some receipts, and then the IRS said they never got them. Now I make at least 2 copies of everything before sending. Also include your case number or tax ID number on EVERY page you send. Sometimes the pages get separated in their processing centers.

Just wanted to add something that helped me when I was in a similar situation - check if there's a "Notice Number" or "Letter ID" on your IRS letter (usually something like "Letter 525-C" or "Notice CP2000"). This number is crucial to include in your response and on your envelope. I also recommend writing "Response to [Notice Number]" clearly on the outside of your envelope along with your SSN or Individual Taxpayer Identification Number. This helps their mail processing center route your response to the correct department faster. And definitely agree with everyone saying to use certified mail with return receipt! I learned this lesson after my first response supposedly got "lost" in their system. The extra $6-8 for certified mail is nothing compared to the potential penalties and interest if they claim they never received your response. One last tip - respond as soon as possible but don't rush so much that you make mistakes. The IRS typically gives you 30 days to respond, but responding earlier shows good faith and gives you a buffer in case there are any issues with delivery.

Those tax advances are basically legal loan sharking anyway. The fees are ridiculous when u do the math on the APR

Sorry to hear about your Credit Karma card closure! Have you considered just waiting for your actual refund instead of getting an advance? The IRS is processing returns pretty quickly this year - usually 21 days or less for e-filed returns. Those advance fees can really add up and eat into your refund. If you absolutely need cash now, maybe look into other options like asking family/friends or see if your bank offers any short-term solutions?

As a teacher myself dealing with similar loan situations, I wanted to add something important that might help with your long-term planning. While you're right to keep the Parent Plus loans in your dad's name to preserve forgiveness options, make sure you're also maximizing your own federal loan benefits. Since your income-based payments are currently $0, you're still getting credit toward Public Service Loan Forgiveness (PSLF) if you're working for a qualifying employer. Those $0 payments count as qualifying payments! Make sure you're submitting your annual employment certification forms to track your progress. Also, depending on your teaching situation, you might qualify for Teacher Loan Forgiveness after 5 years of service, which could forgive up to $17,500 of your federal loans. This is separate from PSLF and could be worth pursuing even if your current payments are $0. Just wanted to make sure you're aware of all your options since the Parent Plus situation is already locked in terms of tax benefits!

Just wanted to add one more consideration that might help with your overall strategy. Since you're a teacher and dealing with both Parent Plus loans and your own federal loans, you might want to look into whether your school district offers any loan repayment assistance programs. Some districts have started offering loan repayment benefits as recruitment/retention tools, especially in high-need areas or subject areas. Even if they can't help with the Parent Plus loans directly (since those aren't in your name), any assistance with your own loans could free up money in your budget to help with the Parent Plus payments. Also, if you're not already, make sure you're taking advantage of the Educator Expense Deduction on your own taxes. You can deduct up to $300 for classroom supplies and materials you purchase with your own money. It's not huge, but every little bit helps when you're juggling multiple loan payments! The tax situation with Parent Plus loans is frustrating, but at least you're being strategic about keeping your forgiveness options open. That's really smart long-term thinking.

Wait I'm still confused. If I have $50k in regular income and $200k in long term capital gains, does that mean my regular income gets taxed at the rates for someone making $250k? Or does it get taxed at the rates for someone making $50k?

This is such a common source of confusion! I went through the exact same thing when I first started investing. The key insight that helped me was thinking of it like two separate "buckets" - your ordinary income bucket and your capital gains bucket. Your $13k in wages gets taxed exactly like it would if that was your only income - it doesn't matter that you have $125k in capital gains sitting alongside it. The capital gains are in their own separate calculation. But here's the part that trips people up: while your ordinary income doesn't get pushed into higher brackets by capital gains, your TOTAL income ($138k) does determine what rate you pay on those capital gains. So you'd likely pay 15% on your long-term gains, but your $13k in wages would still be taxed at the regular income rates for someone making $13k. Think of it as your ordinary income "filling up" the tax brackets first, then your capital gains get stacked on top using their own separate rate table. The IRS basically runs two parallel calculations and adds them together.

This is such a helpful thread! I'm actually in a similar situation but with a twist - I'm considering forming an LLC for my vending machine business instead of staying as a sole proprietor. Has anyone here made that transition and can speak to the tax implications? From what I've researched, an LLC can elect to be taxed as a sole proprietorship (disregarded entity), S-corp, or C-corp. I'm wondering if the S-corp election might save on self-employment taxes once the business gets to a certain profit level, since you only pay SE tax on reasonable salary rather than all profits. Also curious about the liability protection aspect - with machines in multiple locations, I'm a bit worried about potential slip-and-fall incidents or other liability issues. Would love to hear from anyone who's navigated these decisions for their vending business!

This is such a comprehensive discussion! As someone who's been running a small vending operation for about 18 months now, I wanted to add a few practical tips that might help: **Record-keeping tip**: I use a simple binder system where I keep receipts organized by month, plus a basic spreadsheet tracking revenue by location. Makes tax time much smoother than trying to reconstruct everything from memory. **Location agreements**: Make sure you get written agreements with your locations, even if it's just a simple one-page document. This helps establish the legitimacy of your business and makes those location fee deductions much cleaner if you ever get audited. **Seasonal considerations**: Don't forget that vending revenue can be seasonal - my machines do much better in summer months. This affects your estimated tax calculations, so consider using the annualized income method mentioned earlier if your quarterly income varies significantly. **Insurance**: While we're talking about LLCs and liability, don't overlook getting proper business insurance. It's relatively inexpensive for vending operations and adds another layer of protection beyond just the corporate structure. One last thing - if you're handy with basic repairs, keep receipts for small parts and tools. Things like coin mechanisms, bill validators, and even basic cleaning supplies are all legitimate business expenses that can add up over the year. Best of luck with your business! You're definitely on the right track asking these questions upfront.