Just want to add that I consulted with a real estate-specific CPA, and they said most people focusing on business entities are missing the biggest tax advantage: doing a 1031 exchange to defer capital gains when selling. I've done this twice now to upgrade from smaller to larger properties without paying taxes on the appreciation. Saved well over $70k in taxes so far.

This is such a helpful thread! I'm in a similar situation with two rental properties and have been wondering about the same thing. Based on what everyone's shared, it sounds like the business entity route might not be the magic bullet I was hoping for, especially since I'm probably not at the income level where S-corp election would make sense. I'm really intrigued by the cost segregation and missed deduction strategies that @Butch Sledgehammer and @Freya Ross mentioned. I've been doing my own taxes with TurboTax, but it sounds like I might be leaving money on the table by not having a more detailed analysis done. The 1031 exchange info from @Elin Robinson is also really valuable - I hadn't considered that as part of my overall tax strategy, but it makes sense to think long-term about how to defer gains when upgrading properties. Thanks to everyone for sharing their real experiences rather than just theoretical advice!

I was in this exact situation in February. According to Internal Revenue Manual 13.1.7.2, TAS is required to accept cases meeting specific criteria regardless of workload. However, in practice, they're currently screening cases very strictly. I documented my financial hardship (impending car repossession due to delayed refund) and referenced the specific IRM section when I called. They initially tried to defer me but ultimately accepted my case when I politely insisted and cited the regulations.

Thanks for sharing that IRM reference! That's really helpful. I'm dealing with a similar situation where my refund delay is causing financial strain, but I wasn't sure about the specific regulations that might apply. Did you have to provide written documentation of your car repossession notice, or was verbal explanation sufficient when you cited the IRM section? I want to make sure I'm prepared with the right approach when I call.

Another reason rich people use foundations is for CONTROL. When they donate directly to charity, the money is gone. But with a private foundation, they only have to distribute 5% of assets per year while the rest continues growing tax-free. Plus their family can draw salaries from the foundation for "managing" it. Look at any big foundation and you'll see family members on the payroll. They also use foundation money to throw galas and events that boost their social status. The whole "philanthropy" thing is mostly a tax shelter wrapped in good PR. If they really cared about causes they would just pay their fair share in taxes so the government could properly fund services for everyone, not just their pet projects.

One thing nobody's mentioned is that charitable deductions are subject to income limits - you can't just donate your entire income and pay zero tax. For cash donations, you can deduct up to 60% of your AGI. For appreciated assets (stocks, etc.), it's limited to 30% of AGI. Also, the phase-out of itemized deductions can reduce the benefit for very high earners. And if you're subject to AMT (Alternative Minimum Tax), the deduction value can be different than your normal tax rate. The tax code around charitable giving is SUPER complicated and most people (including many tax preparers) don't fully understand all the strategies and limitations.

I think what ur coworkers might be doing is just straight up committing tax evasion and haven't been caught yet lol. The IRS is super backlogged and underfunded so they cant catch everyone, especially people with simple tax situations. But when they do catch up with them those penalties are gonna hurt bad!!

Your instincts are absolutely right to be suspicious! What your coworkers are doing is risky at best and potentially illegal at worst. The IRS doesn't just "forget" about unfiled returns - they have sophisticated systems to track who should be filing based on income reporting from employers, banks, and other sources. Even if someone flies under the radar for a few years, the IRS can assess taxes, penalties, and interest going back indefinitely for non-filers. I've seen cases where people thought they were getting away with it, only to receive a massive bill years later with compounded penalties that made the original tax debt look tiny. The smart move is always to file on time, even if you can't pay immediately. The failure-to-file penalty is much steeper than the failure-to-pay penalty, and the IRS offers payment plans and other options for people who file but need help paying. Your coworkers are essentially gambling with their financial future - definitely not worth it!

My HR person told me that your W-4 filing status should ALWAYS match what you plan to file on your tax return or you could get in trouble. Is this actually true? Because I've been changing mine to get less withholding for years and never had an issue.

I've been dealing with this exact same issue for years! What finally worked for me was using the new W-4's Step 4(b) section where you can enter an annual deduction amount. This reduces your withholding without having to mess with your filing status. Here's what I did: I calculated my standard deduction, estimated charitable contributions, and other itemized deductions, then entered the total in Step 4(b). This tells your employer to withhold less because you'll have more deductions when you file. For example, if you expect $15,000 in total deductions beyond what the W-4 automatically accounts for, entering that amount will reduce your withholding by roughly $15,000 × your marginal tax rate per year. So if you're in the 22% bracket, that's about $275 less withholding per month. The key is being realistic about your deductions so you don't underwithhold. I also keep about $1,000 in a separate savings account just in case I owe a small amount at tax time. This approach has gotten me much closer to breaking even without any penalties.