Thanks for pointing this out! She already filed her return and I just texted her to check if she selected that option. I'm going to ask her to show me her return tonight so I can verify everything matches up with what I filed. Did you end up having to amend either return in your situation?

In our case, my son had to file an amended return to correct his mistake. He had checked "someone can claim me as a dependent" but also claimed his own personal exemption (this was before the tax law changes). It wasn't a huge deal to fix, but it did delay things. The most important thing is making sure all the facts are consistent across both returns. If she filed saying she can't be claimed as a dependent, but you claimed her, that's where the IRS gets confused and may flag both returns for review.

Do you need original documents or are copies/screenshots okay? I have similar issues with my nephew who lives with me but his mom claims him every year even though she barely sees him.

That's incredibly frustrating to learn! I had no idea there was actually a proposed system that got killed by industry lobbying. I just looked up that ProPublica article and wow... the fact that other countries have been doing this for decades while we're stuck manually entering numbers that the government already has is ridiculous. Do you know if there's any movement to revive this idea? Seems like the kind of common sense thing that both political parties could potentially get behind.

There have been several attempts over the years, most recently the Tax Filing Simplification Act that's been introduced a few times but hasn't passed. The current administration has made some promises about simplifying the tax filing process, but meaningful change faces the same powerful lobbying obstacles. The Free File agreement was actually modified in 2019 after the ProPublica reporting, removing the provision that explicitly prevented the IRS from creating its own system. That's a start, but there's still strong resistance. The best hope is continued public pressure and awareness - the more people understand that better options exist and are being deliberately blocked, the more momentum builds for change.

This makes me want to move to Australia just for the tax system lol. Do they at least buy you dinner before they take your money? The US system is just insult to injury - "figure out how much you owe us or go to jail, but also we won't make it easy, and ps we already know the answer.

Wait, I thought QIP only applies to interior improvements of nonresidential property? This is a residential rental building with exterior work.

You're absolutely right - I missed that this was a residential rental property. QIP only applies to interior improvements of nonresidential real property, so it wouldn't apply here. This would just be a standard capital improvement depreciated over 27.5 years as residential rental property. If you can establish the coating itself as a separate building component with a determinable useful life (based on manufacturer specs), you might be able to use a shorter recovery period. But it wouldn't qualify for QIP treatment.

Interesting point, but I don't think it applies here. Routine maintenance is about keeping the property in efficient operating condition, not extending its useful life. Since OP specifically stated this coating extends the life of the roof, it's a betterment, not routine maintenance.

How did FreeTaxUSA handle the estimated tax payment calculations? That's the part I'm most confused about because my accountant never really explained why I needed to pay them or how they were calculated.

FreeTaxUSA has a really good estimated tax calculator that shows you exactly why you need to make payments. It breaks down how much of your income doesn't have taxes withheld (like your dividends and any crypto gains), and then calculates the quarterly payments you need to make to avoid penalties. The system also explains that you generally need to pay estimates when you expect to owe more than $1,000 at tax time. In your case, the combination of your investment income and crypto probably pushed you over that threshold. The software will generate estimated payment vouchers with the exact amounts and due dates for each quarter, which makes it super straightforward.

But what software do you use? And how do you handle the K1? That's the part that seems most complicated to me.

Thanks for this advice. My income has actually decreased quite a bit since 2022 (lost my higher paying job). Would that potentially help me qualify for an Offer in Compromise? And is that something I can apply for myself or do I need a professional?

Yes, a significant decrease in income could definitely help qualify you for an Offer in Compromise. The IRS looks at your current income, expenses, asset equity, and future earning potential to determine if you can reasonably pay the full amount owed. You can absolutely apply yourself using Form 656, though it's a complex process requiring detailed financial documentation. There's a $205 application fee, but it's waived if you meet low-income certification guidelines. If you decide to go this route, be extremely thorough with your financial information. The IRS rejects most offers that are incomplete or don't accurately reflect your ability to pay. There are good resources on the IRS website to help you through the process if you want to try it yourself.

Did they charge you a lot in penalties? I'm in a similar situation and worried about how much extra I'll end up owing beyond the original taxes.