This is such a helpful thread! I'm dealing with a similar situation but with a twist - we lived in our house for 2 years, then moved out and rented it for 1.5 years, then moved BACK in for another year before converting it to a rental again for the past 2 years. From what I'm reading here, it sounds like only that first rental period (the 1.5 years before we moved back) would count as "non-qualified use" since it happened before our final period of primary residence use. The recent 2-year rental period after we moved out for good wouldn't count against the exemption. Does that sound right? This Publication 523 stuff is so confusing with all the back-and-forth living situations. I'm wondering if I should try one of those services mentioned here to get a proper analysis before I make any assumptions about my tax liability.

I'm a tax professional and want to clarify something important that's been mentioned but might get lost in all the discussion - you absolutely need to keep detailed records of your occupancy periods and rental periods. The IRS can and will ask for proof if they audit this exemption. Beyond just utility bills and lease agreements, consider keeping: property tax records showing homestead exemptions during primary residence periods, insurance changes from homeowner's to landlord policies, any correspondence with property management companies, bank statements showing rental income deposits, and maintenance records that distinguish between personal use improvements versus rental property expenses. Also, while everyone's focused on the non-qualified use rules (which are correctly explained here), don't forget about mixed-use periods. If you ever lived in part of the property while renting out another part (like a basement apartment), those calculations get even more complex and you'll want professional help. The Publication 523 confusion is real - I deal with CPAs who misunderstand these rules regularly. When in doubt, get a professional opinion before you file, especially if your gain is substantial. An audit on a six-figure gain exclusion is not something you want to wing.

One important thing to consider that I haven't seen mentioned - as a W-2 employee, you get certain legal protections that 1099 contractors don't have. This includes workers' compensation if you're injured on the job, unemployment benefits if they let you go, and protection under labor laws. As a 1099, you're essentially running your own business, which means you need to handle your own liability insurance and you won't qualify for unemployment if the relationship ends. This is a big consideration beyond just the tax implications.

Great question! I went through this exact decision last year when I started doing real estate work. Here's what I learned: The math really depends on your total business expenses. As a 1099, yes you'll pay the full 15.3% self-employment tax, but you can deduct SO much more - mileage (huge for real estate!), home office, phone, internet, marketing materials, continuing education, even meals with clients. One thing that helped me decide: I calculated my expected annual income and business expenses, then ran the numbers both ways. For me, the deductions saved more than the extra 7.65% in self-employment tax cost me. But also consider the non-tax factors - as others mentioned, you lose unemployment protection and workers comp as a 1099. However, you gain flexibility in how you work and when you work, which is valuable in real estate where you might need to show properties at odd hours. My advice: start tracking ALL your potential business expenses now (even before you decide) for a month or two. That will give you real numbers to work with instead of guessing. If your monthly business expenses are significant, 1099 is probably better. If they're minimal, W-2 might be the safer choice. Either way, definitely consult with a tax professional who understands real estate before making the switch!

I had my verification appointment on February 12, 2024, and my refund was deposited on March 8, 2024 - exactly 25 days later. My transcript updated on March 1 showing the release of the verification hold. I brought my driver's license, passport, social security card, W-2, last year's tax return, and a utility bill. The agent said I was overprepared but that it made the process smoother. Check your transcript on April 15 and April 22 - those should be key update dates based on your Monday appointment timing.

The timeline really varies, but here's what I've learned from going through this process twice. After my verification appointment, it took about 3 weeks for my transcript to update with code 971/571 showing the identity hold was released. Then another 2 weeks for the actual refund to hit my account - so 5 weeks total. Key things that helped speed mine up: - Brought original documents (not copies) - Had my AGI from last year memorized - Asked the agent to notate my file that verification was successful The 9-week timeframe is their maximum, but most people I know got theirs between 3-6 weeks. Keep checking your transcript on Wednesdays - that's when most updates happen. And don't stress if WMR still shows "processing" - it's notoriously slow to update after verification appointments. Good luck with your appointment Monday! The plumbing gods will hopefully smile upon your refund timing 🔧

Just to add my 2 cents - I think the Treasury EIN is actually 72-0000000 for interest payments, not 94-1111111. I had this same issue last year and that's what I used for the payer ID.

I went through this exact same situation two years ago and can confirm the information Lucas provided is correct. For IRS refund interest 1099-INT forms, you should use: - Payer: United States Treasury - EIN: 94-1111111 - Address: You can use either the Ogden, UT or Kansas City, MO service center address I actually called the IRS when I lost mine and after waiting on hold for 2+ hours, the agent confirmed these are the standard payer details they use. She also mentioned that as long as you report the correct interest amount and use the proper Treasury EIN, your return will process normally since they have the matching records on their end. One tip - make sure to keep a digital copy or photo of important tax docs like this in the future! I now scan everything to cloud storage right when it arrives. Good luck with your filing!

As a small business owner who's been through this exact situation, I'd recommend getting really clear on your record-keeping system first before deciding between direct vs indirect categorization. For your F-150 that's 100% business use, the key is consistency. If you're billing clients for travel time or including vehicle costs in your job estimates, then fuel and maintenance tied to specific jobs would be direct costs. Otherwise, treat them as indirect overhead expenses - both are fully deductible either way. Since you mentioned you already track mileage, consider using a simple app like Everlance or TripLog to automatically categorize your trips by job site. This creates the documentation trail you'll need if the IRS ever comes knocking. I learned this the hard way when I got selected for review and had to reconstruct months of driving records. One more tip: if you're doing the actual expenses method (which sounds like it might work better for you given construction vehicle wear and tear), keep a dedicated business credit card just for truck expenses. Makes tax prep so much easier when everything's in one place.

I'm new to running my own business and this whole thread has been incredibly helpful! I've been stressing about vehicle expense categorization for months. One question I haven't seen addressed - what about when you use your work truck for multiple purposes in the same trip? Like if I drive to pick up materials at Home Depot, then swing by a job site to drop them off, then grab lunch on the way back to the office? How do you handle tracking something like that? Also, for those using apps like MileIQ or TripLog, do they integrate well with QuickBooks? I'm trying to streamline my bookkeeping process and don't want to end up manually entering everything twice. Thanks to everyone who's shared their experiences here - definitely saving this thread for future reference!