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This is really helpful information! I'm new to this community but definitely not new to tax procrastination unfortunately. I'm one of those people who somehow let 2024 slip by without filing, and now I'm scrambling with this shutdown deadline looming. I have a question about timing that I haven't seen addressed yet - if I do manage to get my return prepared and e-filed through a tax professional before Thursday's shutdown, how long should I expect to wait for processing? Is there any advantage to filing right before the shutdown versus filing early in a normal year, or does it all just sit in the same queue? Also, I'm seeing some conflicting information online about whether certain tax software companies have already shut down their e-filing for individual returns. Does anyone have a current list of which services are still accepting e-filed returns this week versus which ones have already closed for the year? The penalty information shared by the tax professionals here is definitely motivating me to stop dragging my feet. Better late than never, but also better this week than in January if I can manage it!
Welcome to the community! Great question about timing - if you manage to e-file before Thursday's shutdown, your return will actually process pretty normally. The IRS continues processing e-filed returns that were submitted before the shutdown, so you'd likely see your refund or confirmation within the usual 1-3 weeks rather than having to wait until January. Regarding software availability, you're right that it's a mixed bag right now. From what I've seen, most of the major DIY platforms like TurboTax, H&R Block online, and FreeTaxUSA have already closed their e-filing for individual returns as mentioned in the original post. However, tax professionals using commercial software like Drake, Lacerte, or ProSeries can typically e-file right up until the IRS system shutdown on Thursday. So if you want to e-file this week, your best bet is definitely going through a tax professional rather than trying to do it yourself online. The window is really narrow now, but if you can get an appointment in the next couple of days, you'll avoid both the paper filing delays and the January rush when everyone's trying to file at once. Good luck getting it sorted out before the deadline!
This is such a great breakdown of the shutdown timeline! I had no idea the e-filing system would be down for almost two months. I'm definitely one of those people who's been putting off my 2024 return, and this post is the wake-up call I needed. I'm in a situation where I moved states mid-year and changed jobs, so my tax situation is more complicated than usual. Based on what everyone's saying about the rush before shutdown, I'm thinking my best bet might be to get everything organized this week but wait for January to file with a professional when they're less rushed and can give my complex situation proper attention. One thing I'm curious about - for those who have been through this shutdown period before, does the IRS typically stick to their projected reopening timeline, or do they sometimes extend the maintenance period? I'm trying to plan when to expect my refund if I wait until January to file. Thanks for all the detailed advice from the tax professionals here - this community is incredibly helpful for navigating these timing issues!
Welcome to the community! Your approach sounds really smart given your complex situation with the state move and job change. Those multi-state returns can be tricky, and you're absolutely right that waiting for January when tax pros have more time to focus on the details is probably the better choice. Regarding the IRS timeline, they're usually pretty reliable about sticking to their reopening schedule. In my experience following this community over the past few years, they typically announce the exact opening date in early January and stick to it. Last year they reopened on January 23rd as projected. The IRS is generally better at meeting their technology deadlines than they used to be, especially after all the criticism they got for delays in previous years. One tip for your multi-state situation - start gathering your documents now and maybe even reach out to a few tax preparers to get on their January schedule. With a job change and state move, you'll want someone who's experienced with those situations, and the good ones book up fast once W-2s start arriving in mailboxes. Having everything organized ahead of time will make the process much smoother when filing season officially opens!
Does anyone know if tax software like TurboTax handles Section 1245 property sales correctly? I'm in a similar situation as the original poster but with about $31,000 of equipment I depreciated around $16,000 and need to sell for maybe $9,000-ish.
TurboTax does handle it, but it's not super intuitive. When you enter the sale of business assets, it will ask for your original purchase price, total depreciation taken, and sale price. It calculates everything correctly behind the scenes, but I found the questions somewhat confusing. I had to call their support line to make sure I was entering everything right for my equipment sale last year. If your situation is straightforward like you described, it should work fine though.
Just to add another perspective here - I went through this exact scenario last year with some manufacturing equipment. The key thing that helped me understand it was thinking about depreciation recapture as only applying to the "gain" portion of a sale. In your case, you have an adjusted basis of $13,500 ($27,000 original cost minus $13,500 depreciation taken). Since you're selling for $6,700, which is below your adjusted basis, there's literally no gain to recapture. The $6,800 difference ($13,500 - $6,700) becomes an ordinary business loss that you can deduct. Your buddy might be thinking of situations where people sell equipment for more than the depreciated value but less than the original purchase price. That's when you get into partial recapture scenarios. But in a straight loss situation like yours, no recapture applies. Make sure you keep all your depreciation schedules and purchase records handy when you file - you'll need them to properly complete Form 4797 for the asset sale.
This is really helpful! I'm new to dealing with business equipment sales and depreciation, so I appreciate the clear explanation about how the adjusted basis calculation works. One question - when you mention keeping depreciation schedules and purchase records for Form 4797, do you need to attach copies of these documents to your tax return, or just have them available in case of an audit? I want to make sure I'm organizing everything correctly for when I eventually need to sell some of my business assets. Also, is there a specific way the ordinary business loss from the equipment sale gets reported on the business tax return, or does it just flow through as part of the Form 4797 calculations?
I made the EXACT same mistake last year! My reccomendation is to stop make estamated payments immediately if your wireholding will already cover everythibg. Then I'd suggest changing your W-4 to have ZERO taxes taken out for the rest of the year if possible! This is totally legla if you've already met your tax obligation thru withholding + estimated tax payments. I did this last July and had way biger paychecks for the second half of the year which was nice but still ended up with a $8k refund which sucks. Don't try to generate extra income or capital gains to "use up" the credits - that makes no financial sense!
Be careful with changing to zero withholding - you need to make sure you meet one of the safe harbor provisions first. Either 90% of current year tax or 100% of last year's tax (110% if you're a higher earner). If you've already paid enough through Q1+Q2 estimated payments plus year-to-date withholding to cover that, then yes, you can go to zero for the rest of the year.
I've been through this exact scenario and it's frustrating to realize you're giving the government an interest-free loan! Here's what I learned from my experience: First, definitely stop your Q3 and Q4 estimated payments since your withholding will already cover your tax liability. The IRS only penalizes underpayment, not overpayment. Second, file a new W-4 with your employer ASAP to reduce your withholding for the remainder of 2025. You can calculate exactly how much to reduce it by taking your expected overpayment and dividing it by the number of remaining pay periods. This puts money back in your pocket now instead of waiting for a refund. Make sure you're still meeting safe harbor requirements - sounds like you already are with your Q1/Q2 payments plus regular withholding. The key is that you need to pay either 90% of this year's tax or 100% of last year's tax (110% if your prior year AGI was over $150K). Don't create artificial capital gains just to "use up" the overpayment - you'd essentially be paying unnecessary taxes. The withholding adjustment is your best bet to recover most of that money throughout the rest of the year rather than waiting until you file in 2026.
This is really helpful advice, thank you! I'm curious about the W-4 calculation you mentioned. When you say divide the expected overpayment by remaining pay periods - should I be looking at just the federal overpayment or include state taxes too? I made estimated payments to both federal and state, so I'm wondering if I need to adjust both my federal W-4 and state withholding separately, or if there's a simpler approach to handle both together.
Great advice from everyone here! Just wanted to add a few practical tips from my experience as a tax preparer: 1. **Quarterly payments**: If you're winning regularly throughout the year, consider making quarterly estimated tax payments to avoid underpayment penalties. With $5,300 in winnings, you might owe more than the IRS safe harbor allows. 2. **Professional vs. casual gambler**: The IRS distinguishes between professional and casual gamblers. As a casual gambler, your winnings go on Schedule 1 as "other income." If the IRS ever considers you a professional gambler, you'd report on Schedule C, which has different rules for deductions. 3. **State taxes**: Don't forget about state tax obligations! Most states that have income tax will also require you to report gambling winnings. 4. **Multiple sites tracking**: Since you mentioned using multiple online casinos, make sure your spreadsheet clearly separates winnings/losses by site. This makes documentation much cleaner if you're ever audited. Your record-keeping sounds solid - that spreadsheet and confirmation emails will serve you well. TurboTax should handle this just fine in the "Other Income" section.
This is really helpful advice! I had no idea about the quarterly payments thing. Since I won most of my $5,300 in the last few months of the year, should I still make a quarterly payment for Q4 or just handle it all when I file my return? I'm worried about getting hit with penalties since this is my first year with gambling winnings and I haven't been setting aside money for taxes on it. Also, what exactly makes someone a "professional gambler" in the IRS's eyes? I'm definitely just doing this casually for fun, but I'm curious where they draw that line.
Since you won most of it in the last few months, you're probably fine just handling it when you file - the quarterly payment deadlines have already passed for this year anyway (Q4 was due January 15th). For next year though, definitely consider quarterlies if you keep winning regularly. The IRS looks at several factors to determine professional vs. casual gambler status: regularity of activity, time spent, whether it's your primary income source, if you have gambling-related business expenses, and whether you approach it systematically for profit vs. recreation. Sounds like you're clearly in casual territory - playing for fun with some lucky wins is very different from someone who treats gambling as their business. The key thing is documenting your intent and the recreational nature of your activity. Keep notes showing it's entertainment spending, not a business venture. Your current approach sounds perfect for casual gambler status.
Thanks for all the detailed advice everyone! This has been incredibly helpful. I feel much more confident about handling this now. Just to clarify a few things based on what I've learned here: I'll report the full $5,300 as gambling winnings on Schedule 1, Line 8b in TurboTax. Since I track both wins and losses in my spreadsheet, I'll need to decide whether to itemize (to deduct losses) or take the standard deduction - sounds like I need to run the math both ways to see which is better. I'm definitely in the casual gambler category - this is purely recreational for me, maybe a few hours a week at most. The fact that I got lucky this year doesn't change that it's just entertainment spending. One follow-up question: should I print out and keep physical copies of all those confirmation emails and my spreadsheet, or are digital copies sufficient for IRS purposes? I have everything saved digitally but wondering if I need hard copies for my records. Also planning to be more proactive about setting aside money for taxes if I keep having good luck next year. Don't want any surprises come tax time!
Amaya Watson
As someone who works in FSA administration, I want to clarify a few things that might help everyone here. The IRS Publication 502 is pretty clear that items must be "primarily for medical care" to qualify. However, there's more flexibility than people realize when you have proper documentation. The key is getting your doctor to write a very specific prescription letter stating that the device is "medically necessary" for your diabetes management and that alternative methods are not suitable for your condition. Include language like "prescribed for the sole purpose of continuous glucose monitoring" rather than just "helpful for diabetes management." Also, keep detailed records showing the device is used exclusively for medical purposes - screenshots of only medical apps installed, receipts for medical-only accessories, etc. Some FSA administrators will approve items that clearly demonstrate exclusive medical use, even if the device technically has other capabilities. One more tip: if your initial claim gets rejected, don't give up. The appeals process often gets reviewed by different people who might interpret the guidelines more favorably, especially with strong medical documentation.
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Mei Chen
β’This is incredibly helpful insight from someone who actually works in FSA administration! Thank you for breaking down the specific language that works best. I'm curious - when you mention keeping detailed records of exclusive medical use, how long should someone maintain those records? And if an FSA administrator approves a smartphone for exclusive CGM use one year, does that create any precedent for future smartphone replacements, or would each new device need to go through the same documentation process?
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Lauren Wood
β’Great question! For record-keeping, the IRS generally recommends maintaining documentation for at least 3 years after filing your return, but I'd suggest keeping FSA medical device records for 5-7 years since audits can sometimes go back further for substantial claims. Regarding precedent - unfortunately, each device purchase typically needs to go through the same documentation process. FSA administrators don't usually create blanket approvals for future purchases, even if you've had success before. However, having a previous approval does help your case significantly. I always recommend clients keep copies of their successful approval letters and reference them in future claims, along with updated medical documentation. One pro tip: if you're planning to replace a previously approved medical device, submit your new claim with a copy of the prior approval and a note from your doctor confirming your medical condition hasn't changed and you still require the same type of device. This streamlines the review process considerably.
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Ally Tailer
This thread has been incredibly informative! As someone who's been dealing with Type 1 diabetes for over 15 years, I've seen the technology evolve from fingerstick-only monitoring to these amazing CGM systems. One thing I'd add to the discussion: if you're considering the dedicated smartphone approach that several people mentioned, make sure to check with your insurance first. Some insurance plans will actually cover a portion of "durable medical equipment" when it's prescribed specifically for chronic disease management. While they won't cover a regular smartphone, they might cover a device that's prescribed and documented as exclusively medical. Also, don't forget that your CGM sensors, transmitters, and any prescription apps are definitely FSA/HSA eligible - so even if the phone doesn't qualify, you're still saving significantly on the ongoing supplies. Thanks to everyone who shared their experiences and especially to those who provided the professional insights. This community is exactly why I love Reddit!
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