Has anyone used TurboTax to file with Real Estate Professional Status? I'm not sure if it handles this situation correctly and I don't want to mess it up.

Based on your numbers, you're unfortunately just short of qualifying for Real Estate Professional Status right now. With 850 hours on real estate activities, you easily meet the 750+ hour requirement. However, the "more than half your working time" test is where you fall short - your 1,500 consulting hours plus 850 real estate hours means real estate is only about 36% of your total working time. A few potential strategies to consider: 1. Could you reduce your consulting to part-time (maybe 20-25 hours/week) while maintaining income through higher rates? 2. Are there additional real estate activities you're not tracking? Time spent researching markets, attending real estate education courses, or networking with other investors all count toward your hours. 3. Consider whether some of your current activities could be reclassified - for example, time spent learning about tax strategies for rental properties counts as real estate professional time. The good news is you're not that far off. If you could shift the balance to where real estate represents 51%+ of your working time, you'd qualify and could deduct that $18,500 loss against your consulting income. Given the potential tax savings, it might be worth running the numbers to see if reducing consulting hours could actually increase your after-tax income overall.

One mistake I see a lot - make sure your properties actually qualify as short-term rentals for tax purposes. Its not just about being on Airbnb. The average stay needs to be less than 7 days, and you need to be providing substantial services (similar to hotels). Also remember that material participation for each property is determined separately unless you make a grouping election. If your spending 600 hours combined across all properties, but only 150 on one of them, that specific property might not qualify as active without proper grouping.

Great question about the 7-day average and substantial services! The IRS looks at several factors to determine if you're providing "substantial services" similar to a hotel: - Daily housekeeping or frequent cleaning (you've got this covered) - Providing linens, towels, and toiletries (check) - Concierge-type services like local recommendations, booking activities - Maintenance and repair services - Guest communication and problem resolution Based on what you mentioned (linens, toiletries, coffee, cleaning between guests), you're likely meeting the substantial services test. The key is that these services are provided for the convenience of the occupant, not just basic property maintenance. For the material participation piece that Laura mentioned - you're absolutely right about the grouping election. With 600-700 total hours across multiple properties, Ethan should definitely consider making an election to group his rental activities together. This allows him to meet the material participation test for the entire grouped activity rather than each property individually. The election needs to be made by filing a statement with your tax return, and once made, it's generally binding for future years unless there's a material change in circumstances.

Has anyone actually been audited when using personal cards for business? All this advice sounds good in theory but I'm wondering about real experiences.

I've been using a personal card for my freelance business expenses for over two years now, and I can confirm what others have said - the IRS really doesn't care about the card type. During my recent interaction with a tax professional, they emphasized that the key is maintaining clear separation in your accounting records. What I've found helpful is using a dedicated personal card ONLY for business expenses, even though it's technically a personal card. This makes reconciliation much easier in QuickBooks and gives you a clear paper trail. I also keep a simple spreadsheet with business purpose notes for each transaction, which takes maybe 5 minutes per week but gives me peace of mind. The audit risk doesn't increase just because you're using a personal card - it increases if your expense patterns look unusual for your industry or if you can't properly document business purposes. As long as you're disciplined about record-keeping and only deducting legitimate business expenses, you should be fine regardless of card type.

I'm a nurse and see this issue come up with patients all the time. The rule I always tell them is: if you prepaid for a SPECIFIC procedure with a set date and service, it's deductible when paid. If you put money into a general account or prepaid without knowing exactly what services you'd get, you have to wait until you actually get the service. Also make sure the medical expense is actually deductible. Remember you can only deduct the amount that exceeds 7.5% of your AGI, and only if you itemize deductions instead of taking the standard deduction.

One thing nobody's mentioned - make sure you keep REALLY good documentation. I went through an audit for medical expenses and they wanted to see proof of when I paid AND when I received services. Save everything - receipts, appointment confirmations, insurance EOBs, etc. The IRS is being super picky about medical deductions lately.

Had this exact issue. Called IRS after 4 weeks. They confirmed check was actually mailed. Started payment trace. Check arrived next day. Sometimes system updates before physical mailing occurs. Be patient. Almost there. Keep checking informed delivery.

Has anyone else noticed that the IRS seems to say checks are "mailed" before they actually hand them over to USPS? My refund was supposedly mailed on February 24th but didn't arrive until March 18th! I checked informed delivery every single day and was getting so anxious. Should I call them to ask what's happening? What if it got lost? How long should I wait before panicking?