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HR Block software sometimes gets stuck in these loops when dealing with business asset disposal. Try this workaround: start a new Schedule C for the business with $0 income, then go to the assets/depreciation section. You should be able to select the truck and mark it as "disposed" or "converted to personal use" with a disposition date from last year. The key is telling the software explicitly that the asset has changed status rather than just not entering any business activity. This usually triggers the right forms and calculations to properly close out the depreciation tracking.
This is really helpful! So I should create a Schedule C even with zero income just to properly handle the truck depreciation? Will this trigger any red flags with the IRS?
Yes, create the Schedule C with zero income. This won't trigger any red flags - it's actually the proper way to handle it and prevents problems. The IRS already knows about your truck from previous years' depreciation, so they're expecting to see what happened to it. When you mark it as converted to personal use, the software will calculate if there's any "recapture" of depreciation that might be taxable. Sometimes when you convert a business asset to personal use, a portion of the previous depreciation deductions might need to be recaptured as income, depending on the fair market value versus the depreciated value on your books.
Had the same issue with a business vehicle but in TaxAct. Here's what fixed it for me: enter the Schedule C with zero income, then go to the asset/depreciation section. Enter the truck with 0% business use for the year. This tells the software the asset is still there but wasn't used for business at all. Then next year, you can properly dispose of it if the business is permanently closed. This approach avoided me having to deal with recapture calculations since technically I didn't dispose of the asset yet, just didn't use it for business in that tax year.
16 You should check out the IRS Direct File pilot program that's expanding for the 2025 filing season! It lets you file directly with the IRS for free, completely cutting out the middleman. The catch is that it's currently limited to fairly simple tax situations, but they're expanding it to include more forms. Website is just directfile.irs.gov - worth checking if you qualify before paying anything to TurboTax or others.
14 Does Direct File work if you have multiple W-2s and some 1099 interest? I've got 3 jobs and a savings account.
16 Direct File should work just fine with multiple W-2s and 1099-INT forms for interest income. The 2025 version has been expanded to handle most common simple to moderate tax situations. What it still doesn't support well are things like self-employment income, rental properties, or extensive investment transactions. But for your situation with 3 jobs and a savings account, you should qualify without issues.
4 Anyone had good experience with H&R Block's free version? They claim to be better than TurboTax for free filing but I'm suspicious after getting burned by TT's "free" claims.
11 H&R Block's free version is slightly better than TurboTax's but they still upsell HARD once you have anything beyond basic W-2 income. I tried them last year thinking I'd save money but ended up paying almost the same as TurboTax would've charged when they forced me to upgrade for my stock sales. FreeTaxUSA or Cash App Taxes are genuinely free alternatives that don't pull the bait-and-switch.
This might be an unpopular view, but unless the loan amount is huge (like over $100k), I wouldn't worry too much about documentation. My dad loaned me $35k for grad school, and I've been paying him back $500/month for years with zero documentation. No issues whatsoever. As long as you're not trying to deduct loan interest on your taxes and the amounts aren't suspicious enough to trigger an audit, the IRS generally has bigger fish to fry. Just label your transfers as "loan repayment" if possible and keep basic records of what you've paid.
Terrible advice. The IRS can look back several years if they decide to audit you. Better to do things right the first time than risk problems later. I learned this the hard way.
You're right that documentation is ideal, but I'm just sharing my real-world experience. The IRS audits less than 1% of tax returns for people making under $200k annually. I agree it's better to do things properly, especially for larger amounts or if you're concerned about potential audit flags in your situation. My point was simply that many family loans happen informally without issues. That said, if someone has the option to document things properly from the beginning, they absolutely should.
Has anyone considered using a promissory note? I printed a template online when my sister loaned me money for car repairs. Super simple, we both signed it, and it clearly states the total amount, when it was loaned, and that no interest is being charged. Cost nothing but provides basic documentation.
Promissory notes are definitely the way to go! I'm an accountant (not giving professional advice) and this is what I recommend to friends and family. It doesn't need to be complicated - just the amount, dates, payment terms, signatures. Keep it with your tax records.
Have you checked if you maybe had any fees deducted if you filed through a tax preparer? Sometimes if you opted to have your preparation fees taken out of your refund, that might explain the difference. Also check if you had any refund advance loans that would be recouped from your actual refund.
I did use TurboTax but paid their fee with my credit card, not out of my refund. And definitely didn't take any refund advance loans. Looking at my transcript again, it clearly shows the full $4,089 as the amount that should have been refunded. So confusing!
That is strange then. One last thing to check - did you look at your tax return transcript or your account transcript? The account transcript would be more accurate for refund information as it shows all transactions on your account. Sometimes the numbers can look similar but mean different things. If the account transcript definitely shows $4,089 as the refund amount and you only got $3,717, then something's definitely off and you'll need to contact the IRS directly. Might be worth using one of those services others mentioned since the phone lines are so jammed.
Did you maybe owe any state taxes? Sometimes the feds will take money from your federal refund to pay state tax debt. Happened to me last year and I was so confused until I got a letter explaining it a week later.
This is what happened to me too. Missing $540 from my refund, turns out I had forgotten about an outstanding state tax bill from two years ago. The really annoying part is that the notice explaining it came almost 3 weeks AFTER the reduced refund hit my account!
Anna Stewart
It sounds like most people here are forgetting you can only claim the car sales tax if you itemize, and with the standard deduction being so high now ($14,150 for single), it probably doesn't make sense unless you have a ton of other deductions like mortgage interest, charity, etc. Don't waste time on this if your total itemized deductions don't exceed the standard deduction amount!
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Layla Sanders
ā¢Totally agree with this. I almost made this mistake. I got all excited about deducting my $4,500 in car sales tax until my accountant pointed out that my total itemized deductions were only around $11,000, way less than the standard deduction. Would've been a bunch of paperwork for nothing!
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Morgan Washington
Did nobody mention that if you use your car for business, you might be able to deduct a portion of the sales tax as a business expense on Schedule C rather than as an itemized deduction? That's what my tax guy told me. Might be worth looking into if you're self-employed or have a side gig.
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Benjamin Johnson
ā¢I actually don't use the car for business, it's purely personal. But that's a really good point for other people in this thread who might have business use. I'm going to look into the sales tax deduction calculator that was mentioned above and see if it makes sense with my other potential deductions. Thanks everyone for all the helpful advice!
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