Actually the threshold is supposed to be $5,000 for 2023 tax year. They delayed the $600 threshold again. But some payment processors might still be sending them at $600 because the law keeps changing.

I just went and checked all my transactions, and you're right - most were sent as Friends & Family! But there were like 6-7 transactions that people sent as Goods & Services even though they were just paying me back for stuff (I guess they didn't know the difference). So maybe that's why I got the 1099-K? Seems like I'm going to have to figure out how to explain this on my taxes since PayPal is reporting it all as business income. Ugh, what a headache over $200!

Wait this is interesting. So you're saying some states still allow casualty/theft deductions even though federal doesn't? How would I find out if my state does this?

You'd need to check your specific state tax laws or consult with a tax professional familiar with your state's regulations. Many states have their own rules that don't exactly match federal tax law. For example, California, New York, and several other states still allow various deductions that were eliminated or reduced by the Tax Cuts and Jobs Act. Your state's department of revenue website should have information about casualty and theft losses. Look for sections on itemized deductions specific to your state. Just be prepared for some dense reading, as state tax explanations aren't known for being user-friendly. A local tax professional would be your best resource if you want to be certain.

Man I wish I had known about this before. My insurance agent never mentioned this as an option when I was trying to save money by dropping full coverage. Definitely adding this to any future policies.

Not available in all states though. I tried to get this in Michigan and was told our no-fault system doesn't offer it. Worth checking but don't assume it's universally available.

Thanks for mentioning that! I actually do itemize because my mortgage interest plus property taxes plus charitable giving puts me well above the standard deduction. But that's a really good point for others who might not realize this.

Glad to hear you're already aware of the itemization threshold! That's great you're above the standard deduction amount - you'll definitely benefit from claiming the property tax payment on your 2023 return then. Another tip: keep an eye on the SALT (State And Local Tax) deduction cap of $10,000. This includes both property taxes and state income taxes combined. If you live in a high-tax state, you might hit this limit, which could affect how much benefit you get from your property tax deduction.

I had the same problem! The trick is to enter it based on the date you actually paid, not the tax year shown on the bill. In TurboTax, when you're entering property taxes, there should be a field for "date paid" - make sure that shows your 2023 payment date. If you entered the year from the bill instead, it might have gotten confused.

Thank you! I'll try that again. I think I was putting the tax year instead of the payment date in that field. The TurboTax interface is so confusing sometimes.

That's a really good point I hadn't considered. The operating agreement and investment documents we signed do clearly specify that funds were for capital contributions, not loans. When I returned the money, I also wrote "return of unused capital contribution" in the memo line of the check and had my uncle sign a simple document acknowledging receipt of the returned investment. Does this sound sufficient? Should I also make note of this somewhere when I formally dissolve the LLC?

Your documentation sounds excellent. The clear language in your operating agreement, the memo line notation, and especially having your uncle sign an acknowledgment document are all smart steps that establish the proper characterization of the funds. When dissolving the LLC, include this documentation with your dissolution records. While it won't necessarily be submitted to the state as part of the dissolution filing, keeping everything together in your business records creates a complete audit trail. Some states do require a statement about the disposition of all assets and liabilities when dissolving, so you'd mention the return of all capital contributions there. This comprehensive documentation approach protects you if questions arise years later when memories have faded.

I second this! I'm in Massachusetts, and they still required an annual report filing fee of $500 even though my LLC did absolutely nothing. When I went to dissolve it, they wouldn't process the paperwork until I'd paid the outstanding fees plus penalties. Ended up costing me over $1,200 to close an LLC that never even operated.

Thanks for the perspective! Did you find that your VITA experience helped you land your first tax job? I'm hoping it will give me a leg up when I start applying.

Absolutely it helped! I highlighted my VITA experience in all my job interviews. Employers loved that I already had practical experience preparing returns and working directly with clients. Many accounting students graduate only knowing theory, but VITA gives you hands-on experience. It also gives you great stories to tell in interviews. I talked about challenging cases I handled and how I researched solutions. This demonstrated problem-solving skills that firms are looking for. Several interviewers told me my VITA experience was what set me apart from other candidates.

This is so true! I've been doing taxes professionally for 8 years and I still look stuff up constantly. The tax code changes every year anyway, so memorization isn't as valuable as knowing how to research.