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Make sure you're keeping track of all the business assets when you close down too. If you kept any equipment or inventory for personal use, you might need to report that as a distribution to yourself.
Thanks for bringing this up! I did keep a laptop and some office furniture that I originally purchased for the business. I wasn't sure how to handle those. So I need to figure out the fair market value and report that somewhere? Is that also on Schedule C or somewhere else?
For business assets you kept for personal use, you'll need to report them as distributions. The fair market value of those items gets reported as income on Schedule C, Part I, Line 6 (Other income). You'll also need to "sell" the assets to yourself at fair market value for depreciation purposes - meaning you stop business depreciation and potentially report gain/loss on Form 4797 if the FMV differs from the book value. Then you can start using them personally. For items like a laptop and office furniture, you can estimate FMV by checking what similar used items are selling for online (eBay sold listings, Facebook Marketplace, etc.). Keep documentation of your research in case the IRS asks how you determined the values.
This is exactly the kind of situation that trips up so many business owners during closure! You've gotten some great advice here already. One additional thing to keep in mind - since you're filing what's essentially a final Schedule C for this business, make sure you've accounted for any outstanding accounts receivable or payable that might affect your final tax picture. If you had any unpaid invoices from 2021 services that you never collected on, you might want to consider writing those off as bad debt on this final return. Also, double-check that you've properly handled any equipment depreciation for the partial year 2022. If you sold, discarded, or converted business assets to personal use during the closure, you may need to calculate depreciation only up to the disposal date and potentially report gains/losses. The stress is totally understandable - business closures create some of the most complex tax scenarios. But you're asking the right questions and getting solid guidance here. Take it step by step and you'll get through it!
Hey just throwing this out there - have you considered tracking ALL vehicle-related expenses instead of using the standard mileage rate? My tax guy told me that you can choose either the standard mileage rate OR actual expenses (gas, maintenance, insurance, depreciation, etc). If you drive a truck, especially an older one that's less fuel efficient, sometimes the actual expenses method gives you a bigger deduction IF you qualify for any deductions at all. Just a thought.
I feel your pain on this one! I'm a field service technician and was in almost the exact same situation last year - driving about 25,000 miles annually with my company only reimbursing at $0.45/mile. The unfortunate reality is that the H&R Block preparer was right about Form 2106 being essentially eliminated for most employees. I spent way too much time researching this and even consulted with a CPA who confirmed that regular W-2 employees can no longer deduct unreimbursed business expenses. What actually worked for me was taking the advice about negotiating with my employer. I put together a simple spreadsheet showing: - My annual work mileage - Current company rate vs IRS standard rate - Total out-of-pocket cost to me ($4,600 in my case) - How this affects my take-home pay I presented it during my annual review and got a $2,400 annual raise specifically to help offset vehicle costs. Not the full amount, but way better than nothing! The key was framing it as a retention issue - they'd rather give me a raise than train someone new who might quit over the same problem. Also started keeping detailed records of actual vehicle expenses (maintenance, tires, etc.) to show the real impact of all that driving. Even though I can't deduct them, it helped make my case to management.
One thing I haven't seen mentioned yet - your aunt and uncle should consider filing IRS Form 911 (Taxpayer Advocate Service) along with their OIC application. My parents were in a similar situation (though they were in Canada, not deported) and the Taxpayer Advocate really helped navigate the unique circumstances. The Taxpayer Advocate Service can sometimes intervene when there are special circumstances like being unable to return to the US due to immigration issues. They have more flexibility than regular IRS agents to consider unique situations. Also, make sure to emphasize in the OIC application that your aunt and uncle CANNOT return to the US to earn income to pay the debt. That "economic hardship" angle can be persuasive in these cases.
Is there a way to contact the Taxpayer Advocate Service from outside the US? And do they actually have the authority to help with cases involving deportation or does that create complications?
Yes, the Taxpayer Advocate Service can be contacted from outside the US. There's an international taxpayer advocate office specifically for taxpayers living abroad. They can be reached at 787-522-8601, or you can submit Form 911 by mail or fax. The Taxpayer Advocate absolutely has authority to help with tax issues regardless of immigration status. Their role is to ensure fair treatment of taxpayers facing significant hardship, and inability to return to the US due to immigration issues certainly qualifies as a hardship when it affects one's ability to pay taxes. They don't handle the immigration matters themselves, but they can advocate for reasonable tax solutions given those circumstances.
Don't forget about the implications for future immigration status! When my cousin applied for reentry after a deportation, the immigration officers specifically looked at whether he had resolved his tax issues. Make sure your aunt and uncle understand that handling this tax debt properly now (even if through an OIC) could impact their ability to return to the US later. Unresolved tax debt can be considered in immigration proceedings as a negative factor. I'd strongly suggest consulting with both a tax professional AND an immigration attorney since these issues are intertwined. The approach to the OIC could have implications for the pending U-visa application.
That's a really important point I hadn't considered. Do you know if accepting an OIC would be viewed negatively on future immigration applications? Or is it better than having unpaid tax debt?
An accepted OIC is generally viewed more favorably than unpaid tax debt in immigration proceedings. Immigration officers want to see that you've resolved your tax obligations, even if through a compromise. Having an active tax debt shows you haven't addressed your responsibilities, while an OIC shows you took steps to resolve the situation within your financial means. For the U-visa specifically, demonstrating good moral character is important, and resolving tax issues (even through compromise) supports that. Just make sure to keep all documentation showing the OIC was accepted and paid in full - you'll likely need this for future immigration applications. The key is being proactive about resolving the debt rather than ignoring it. Immigration attorneys often recommend getting tax issues cleared up before proceeding with major immigration applications.
Does anyone know if having tax topic 152 means you're definitely getting a refund? Or can they still deny it at this stage? This is my first time seeing this code and I'm not sure if I should be relieved or still worried, haha. Also, does checking WMR multiple times a day slow down processing? (Asking for a friend... who might be me š
Tax Topic 152 is actually a good sign - it means the IRS has accepted your return and it's moving through their system. You're definitely getting your refund, it's just a matter of when. I've been through this several times and checking WMR constantly doesn't affect processing speed (though it might affect your sanity!). The IRS updates their systems overnight, usually between midnight and 6am, so checking once daily in the morning is plenty. Since you filed 3 weeks ago, you should see movement soon - most returns with Topic 152 get their DDD within 21 days of filing. Hang in there!
Thank you so much for this reassurance! As someone new to dealing with tax refunds, seeing that code without any clear explanation was really stressing me out. It's good to know that checking constantly won't hurt anything (though you're right about the sanity part - I've probably refreshed WMR about 20 times today alone). I really appreciate you taking the time to break down what Topic 152 actually means and giving that realistic timeline. Makes me feel much better about the whole process!
Grace Lee
The IRS systems are so broken rn. My return from 2022 just got processed last week š
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Mia Roberts
ā¢same bestie, same š we're all in this sinking ship together
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Ezra Bates
I had a similar situation last year with multiple 570 codes and no communication from the IRS. The key thing is that the August 2024 date doesn't necessarily mean they'll hold everything until then - it's more like a system placeholder. When I had this happen, my advocate told me that future-dated 570 codes often get resolved much earlier, especially if you stay on top of it. I'd definitely reach out to your tax advocate again since they have better access to what's actually happening behind the scenes. The fact that you got a small refund in April suggests they're processing parts of your return, which is actually a good sign that things are moving forward even if slowly.
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