Can CPAs help with issues from prior year returns? I think I messed up my 1099-MISC reporting for a rental in 2023 and I'm worried about an audit.

Yes, CPAs can absolutely help with prior year issues. They can prepare amended returns (Form 1040-X) to correct mistakes from previous filings. For your 1099-MISC situation, they could review what you submitted and determine if an amendment is necessary. Many CPAs also offer audit representation if the IRS does question your return. Having someone who understands the tax code represent you during an audit can be extremely valuable, especially for rental property issues which tend to be scrutinized more closely.

I thought moving expenses weren't deductible anymore after the tax law changes? Was this for a military move or something special?

Thanks for mentioning this! Do you know if there's an income limit for claiming the American Opportunity Credit? And can I claim it if I'm also deducting business expenses related to my small business?

Yes, there are income limits for the American Opportunity Credit. It starts to phase out at $80,000 for single filers ($160,000 for married filing jointly) and is completely phased out at $90,000 for single filers ($180,000 for married filing jointly). You can absolutely claim both the education credit and your business deductions - they're completely separate. The education credit goes on your personal return while your business expenses go on Schedule C. They don't conflict with each other at all. Just make sure you're not double-dipping by trying to claim business education expenses as both a business deduction and an education credit.

Wait what?? I've been deducting mileage for my W-2 job for years! When did this change? Am I gonna get audited now? 😨

Thanks for this info about the transaction codes! I pulled my transcript again and I don't see any code 898 on it anywhere, just the standard refund codes. That's a huge relief! One more question - the offset last year was for exactly $3,875, but our total debt was actually $4,300. Could they come after the remaining $425 this year, or would that have all been handled in one go?

Great news about not seeing code 898! That strongly suggests no offset is planned for this year. Regarding the partial debt payment - if your total debt was $4,300 but only $3,875 was taken last year, it's possible they could come after the remaining $425 this year. However, this would typically show up as a new, smaller offset amount when you call the offset line. Since you're only seeing last year's information, it suggests either the remaining amount was forgiven or they determined it was too small to pursue through the offset program (some agencies have minimum thresholds). To be absolutely certain, I'd recommend contacting the original creditor (DoD in your case) to verify if any balance remains.

This isn't exactly right. The $3,500 threshold only applies to federal tax debts, not to other types of debt like credit cards or student loans. For non-tax debts, they can take up to 100% of your refund.

That's exactly how I discovered this issue in the first place! The mortgage officer asked for my W-2s and when I explained the situation, she was the one who told me it sounded like misclassification. Do you think having it corrected now will help my application, or is the damage already done for this year's income?

Getting it corrected now can definitely still help your application. If your employer reclassifies you properly and issues corrected tax documents, we can use that as your current income verification. Most importantly, make sure you get documentation of the correction process and explanation of the situation. Ask your employer to provide a letter explaining the misclassification was their error and stating your correct employment status and income. Also helpful: having proper W-2s issued for previous periods if possible. This documentation will help your underwriter make a case for using your income without requiring the typical 2-year self-employment history that would normally apply to 1099 income.

This! I was misclassified for 2 years and after getting it corrected, received almost $4k in backpay just from the employer portion of taxes they should have been paying all along. The Department of Labor can also get involved if your employer refuses to correct the situation. Don't let them take advantage of you!

Does FreeTaxUSA handle business losses correctly though? I've heard mixed things about their self-employment features compared to TurboTax.

FreeTaxUSA has worked perfectly for my small business for the past two tax seasons. Their interface for business income and expenses is actually cleaner and more straightforward than TurboTax in my opinion. Their system for tracking loss carryforwards works well too - it automatically pulls the information from your previous year's return if you used them before, or you can enter it manually if you're switching from another service. The best part is they don't lock features behind paywalls or make you wait for "form availability" like TurboTax does.

I think this is the right answer! I had the exact same issue with a rental property I sold, and just marking it as "disposed" in TurboTax fixed everything. The software just needs to know you're not continuing with that business.