That's really helpful info! My AGI is around $95k so it sounds like I would qualify. Do I need to do anything special to claim these losses, or does it happen automatically when I file Schedule E?

It should flow through automatically when you complete Schedule E and Form 1040. The key is that you need to be "actively participating" in rental management decisions (which it sounds like you are). The tax software should handle this calculation, but just make sure the loss from Schedule E is being applied against your other income on your 1040. One caveat - if you use a property manager and aren't making most of the management decisions yourself, you might not qualify as "actively participating," so keep that in mind.

And remember that if you do keep part of the pet deposit for damages when a tenant moves out, you can offset that income with the actual cost of repairs! So if you keep $300 of a deposit but spend $300 fixing chewed baseboards, it's a wash for tax purposes.

3 Do you need to make a certain amount from freelance work to claim the home office deduction? I only make like $2000-3000 a year from occasional design projects while my kid is at preschool a few hours a week. Is it even worth claiming?

9 There's no minimum amount required to claim a home office deduction for freelance work. Even with just $2000-3000 in annual income, it's definitely worth claiming if you have a dedicated space for your design work. The key requirement is that the space must be used "regularly and exclusively" for business. If you have a desk or corner that's only used for your design projects, you can deduct a percentage of your home expenses (rent/mortgage, utilities, etc.) based on the square footage of that space. You can also deduct business-specific expenses like design software, equipment, etc. For someone in your situation, this could easily save you several hundred dollars on your taxes.

21 I use Mint for tracking all our family expenses and just tag childcare-related stuff with a specific category. Makes it super easy at tax time to pull a report of all those expenses. There's also apps specifically for co-parenting expense tracking like Splitwise that work well even if you're not separated/divorced.

Wait really? So if I have rental losses I can't use now because of my income, I can use them when I eventually sell the property? How does that work with depreciation recapture?

Yes, that's one of the most overlooked benefits of rental property investing for high-income earners. When you sell the property, you can use all those suspended passive losses against the gain from the sale. Regarding depreciation recapture - that still happens regardless. You'll pay the 25% depreciation recapture tax on all depreciation taken (or that should have been taken) when you sell. But your suspended passive losses can offset the capital gains portion of your sale. It's essentially a timing benefit - you defer the tax benefit until disposition. This is why detailed record-keeping is essential. I track my suspended losses in a separate spreadsheet each year so I know exactly how much I can use when I eventually sell. Also worth noting that if your income ever drops below the $150k threshold temporarily (sabbatical, job change, etc.), you can use some of those suspended losses in those years.

The Real Estate Professional status is super hard to qualify for though. I tried claiming it one year and got audited! Had to provide detailed hourly logs showing my real estate work. The IRS is really strict about those 750+ hours.

That's terrifying! I'm not looking at partnership yet, but what questions should I be asking when the time comes to make sure I don't get blindsided? And should I have both a CPA and attorney review any practice buy-in?

You absolutely should have both a healthcare-specialized CPA and attorney review any practice buy-in agreement before signing. The key questions to ask include: How are accounts receivable valued and taxed? Is the buy-in structured as stock or asset purchase? What's the allocation between goodwill (capital gains tax rate) versus other assets (ordinary income tax rate)? What retirement plan obligations am I assuming? Always get a pro forma tax return showing the estimated tax impact of the transaction before proceeding. Many physicians focus only on the monthly payment amount without understanding the tax consequences, which can sometimes double the effective cost of the buy-in.

This is really important. I got individual disability insurance during residency (cheaper when you're young) with specialty-specific language. My colleague waited until attending salary and not only pays 3x what I do, but had developed mild hypertension by then, resulting in a policy exclusion for any cardiac-related disability. Terrible situation to be in as a surgeon.

Exactly right. Purchasing disability insurance during residency or fellowship is one of the smartest financial moves physicians can make. The premiums are significantly lower when locked in at a younger age, and you're more likely to qualify for clean coverage without exclusions before developing the common health issues that come with age and medical practice stress. The specialty-specific language is absolutely critical. The difference between a policy that pays if you can't perform your specific surgical specialty versus one that only pays if you can't work as any type of doctor can literally be millions of dollars over your career. It's one area where physicians should never cut corners or delay.

Doesn't filing when you don't need to just create unnecessary work for the IRS? I always thought we shouldn't file if we don't have to, to reduce their workload.

That's a fair point about creating unnecessary work, but I don't think it's a significant burden for their systems to process a simple return that shows below-threshold income. My main concern is protecting myself. Having returns on file creates a definitive record that the income was below thresholds for those years. Without that documentation, if there's ever a question 10+ years later, you'd need to somehow prove what your income was for those years. Most people don't keep tax records that long, but the IRS and states can come asking questions well beyond typical record-keeping timeframes. The peace of mind is worth the small effort of filing a simple return for me.

Is there a downside to filing when you don't need to? Like could it trigger audits or other issues? I'm in a similar situation to OP and wondering if I should start filing my state returns even though I'm under the threshold.

There's virtually no downside to filing when you don't need to. It won't increase your audit risk - in fact, filing a return that shows very low income is extremely unlikely to trigger an audit since there's little tax revenue at stake. For state returns specifically, it can actually prevent problems. Many states have automated systems that flag taxpayers who filed federal returns but not state returns. By filing a state return (even showing zero tax), you avoid these automatic flags and the notices that follow. It's much easier to file a simple return than to respond to notices and explain why you didn't file. Think of it as preventative documentation.