My friend tried deducting his real estate courses last year and got audited! The IRS disallowed the deduction because they said his education was preparing him for a "new trade or business" since he only owned one rental property at the time. Just be careful and document everything!!

The key distinction that tripped up your friend's situation is really important for everyone to understand. The IRS looks at whether you're already operating as a business versus preparing to enter a new business. With just one rental property, it can be harder to establish that you're already running a legitimate rental business operation. In your case with 2 duplexes over 3 years, you have a much stronger position to argue you're already in the rental business and the MBA courses are maintaining/improving existing skills. The fact that you're already paying taxes on rental income and have multiple properties helps establish this as an ongoing business activity. However, I'd still recommend being very conservative and only claiming the portions of courses that directly relate to your current landlord activities. Document how specific course modules connect to tasks you already perform - like tenant screening, property maintenance planning, financial analysis of your existing properties, etc. Avoid claiming anything that looks like it's preparing you for real estate development, commercial property acquisition, or other activities you're not currently doing.

Just want to warn everyone - be super careful about claiming ESA expenses. My friend tried deducting her emotional support cat expenses last year and got audited. The IRS made her pay back all the deductions plus penalties. Unless your situation clearly qualifies under the service animal rules, it's probably not worth the risk.

Thanks for sharing this question - it's one that comes up a lot and the answers here are really helpful. I went through something similar with my therapy dog last year. Just to add another perspective: even if you can't deduct the ESA expenses directly, don't forget that you can still deduct your therapy sessions and any other mental health treatment costs (assuming you itemize and meet the 7.5% AGI threshold). The therapy that led to your ESA prescription is definitely a legitimate medical expense. Also, keep really detailed records of everything - receipts, vet bills, your therapist's documentation, etc. Even if you don't claim the ESA expenses this year, tax laws can change, and having good documentation ready is always smart. The IRS appreciates thorough record-keeping if you ever do get questioned about any medical deductions. Hope Milo continues to help with your anxiety and depression - ESAs can make such a difference even if the tax benefits aren't there!

Thanks everyone for the helpful responses! This clears up my confusion. I was hoping the IP PIN would simplify things but sounds like I need to be prepared for both. Really appreciate the detailed explanations - makes sense that they serve different security purposes even though it's frustrating to deal with multiple layers.

Just to add some clarity from someone who's been through this multiple times - the IP PIN is basically your "password" to file, while identity verification is like showing your driver's license. Even with the PIN, if the IRS system flags something unusual about your return (could be income changes, new deductions, etc.), they'll still ask you to verify. It's annoying but it's actually protecting you from having someone else successfully file a fraudulent return even if they somehow got your PIN. The good news is once you verify successfully, it usually gets easier in future years.

Another option you could consider is FreeTaxUSA. I've used it for years with my self-employment income. They charge nothing for federal filing (even with Schedule C) and only $15 for state. Saved me a ton compared to TurboTax's $160+ pricing.

I do taxes for several barbers and I'll tell you what I tell them - if you're getting a 1099-NEC, you NEED the self-employed version of whatever tax software you choose. Here's why: 1) You have to file Schedule C to report your income properly 2) You're missing out on THOUSANDS in deductions if you don't track business expenses 3) You have self-employment tax to calculate (extra 15.3% on your profits) Most barbers I work with can deduct: - Chair rental - Supplies (clippers, scissors, products) - Continuing education - Uniforms/work clothes - Business percentage of phone - Mileage if you travel between locations Don't cheap out on the software and miss these deductions!

Does anyone use TurboTax Self-Employed for this stuff? I'm trying to figure out where to even put these meal expenses when I file. Last year was my first IC job and I completely missed tracking meals because I didn't know they could be deductible.

Great question! As someone who's been doing IC delivery work for about 2 years now, I can share what I've learned about meal deductions. The key thing to remember is that your meals need to have a clear business purpose beyond just "I was hungry." For delivery drivers, meals can be deductible when they're necessary to maintain your delivery schedule or efficiency. For example, if you're in the middle of a busy delivery block and need to grab something quick to keep going without losing income, that's typically deductible at 50%. What I do is keep a simple log on my phone noting: - Date and time of meal - Location where purchased - Amount spent - Brief business reason (like "grabbed lunch during 4-hour delivery block to maintain schedule") The IRS isn't looking to deny reasonable meal expenses - they just want to see that it was truly connected to your business activities rather than just your normal personal eating. Keep good records and you should be fine! One more tip: if you do multi-app delivery (DoorDash, Uber Eats, etc.), those meals during active delivery periods are usually your strongest deductions since you're clearly "on the clock.