


Ask the community...
Have you checked your tax transcript on the IRS website? Go to irs.gov and search for "get transcript online." You'll need to create an account if you don't have one. The transcript will show codes that tell you exactly where your return is in processing. Look for code 846 which means "refund issued" - that's what you want to see!
Has your state refund come through yet? Sometimes state refunds process faster than federal. Also, did you file electronically or by mail? Paper returns are taking 6-8 weeks minimum this year from what I've heard.
I filed electronically for both federal and state. My state refund (about $430) actually came through about a week ago, which makes the federal delay even more annoying! I don't understand why the state can process it so quickly but the federal is taking forever.
For filing an extension online, I'd recommend using the IRS Free File Fillable Forms. It's completely free and direct from the IRS. Just search "IRS Free File Fillable Forms" and you'll find it. Form 4868 is what you need for the extension. With your situation (new home, multiple income sources), I'd definitely suggest finding a CPA this year. The first year of homeownership creates a lot of new tax opportunities and potential pitfalls. A good CPA will likely save you more than they cost, especially with itemized deductions.
Do you have any tips for finding a good CPA? I've never used one before and have no idea how to tell if someone is good or not.
Ask friends or family for recommendations first - personal referrals are usually the best way to find a reliable CPA. If that doesn't work, look for someone who specializes in individual taxes with real estate experience. Always check their credentials (make sure they're actually a CPA and not just a tax preparer) and ask about their experience with situations like yours. A good CPA will take time to explain things and not just rush you through the process. Many offer free initial consultations, which is a great way to see if they're a good fit before committing.
I filed an extension last year using TurboTax and it was pretty easy. They guided me through estimating what I owed too. Just make sure you do it before the regular tax deadline!
TurboTax charges for extensions though, right? I thought there were free options available.
You're right, TurboTax does charge if you want to e-file the extension through them. I forgot about that! The IRS Free File Fillable Forms mentioned by others is definitely the free way to go if you don't want to pay anything. I just found TurboTax easier since I was already using it for my returns.
Just want to add something important about record keeping. Even if you don't need to file anything for your child because they're under the $1300 threshold, you should still keep track of the cost basis for all investments in the custodial account. I learned this the hard way when my son turned 18 and we transferred his custodial account to his own name. We had years of small dividend reinvestments that we never reported (correctly, since they were under the threshold), but we still needed the cost basis history for when he eventually sells those investments. Keeping good records from the beginning saves a ton of headache later!
That's a great point I hadn't considered! So even though I don't need to file taxes for these small amounts now, I should be keeping detailed records of all transactions for future basis calculations? Does your brokerage help with this or do you need to track it separately?
Most brokerages now track cost basis for acquisitions after 2011, so you'll have records available in their systems. However, I still recommend keeping your own spreadsheet or file with annual statements. This is especially important for dividend reinvestments which create tiny new tax lots every time they occur. While the brokerage tracks these, having your own backup documentation is valuable. Also, if you ever switch brokerages or when the account eventually transfers to your child, having your own complete history makes everything much smoother. Think of it as an insurance policy against future tax headaches!
Be careful about state taxes too! The federal kiddie tax threshold is $1300, but some states have different rules. I'm in New Jersey and learned that they have a much lower threshold for filing a tax return for dependents with unearned income. My son only had about $900 in dividends and capital gain distributions last year, so I didn't file a federal return as it was under the $1300 threshold. Later found out NJ required filing for anything over $500! Had to scramble to file a state-only return for him.
Wow, I hadn't even thought about state taxes being different! I'm in Illinois - does anyone know what the threshold is here for custodial accounts and kiddie tax?
I don't know Illinois specifically, but many states either follow the federal guidelines or have their own thresholds. Your best bet is to check the Illinois Department of Revenue website or call them directly. Another option is to look at your tax software if you use any - most good tax software will alert you to state-specific filing requirements for dependents when you input their information. That's actually how I discovered the NJ requirement after initially missing it. Don't assume state and federal rules align, as that was the mistake I made!
I think people are missing an important perspective here. My teenage daughter works part-time and pays taxes. When we discussed this issue, she pointed out something interesting - she WANTS to pay into the system even without being able to vote yet. She sees it as learning financial responsibility and contributing to public services she uses like schools and roads. That said, she definitely feels there should be some mechanism for youth voices to be heard in tax policy discussions. Maybe not full voting rights at 16, but perhaps some kind of youth advisory council that provides input on how tax dollars affecting youth are spent?
That's an interesting perspective, but how would a youth advisory council actually work? Would they have any real power or just be symbolic? And who would choose which teens get to serve on it?
Those are good questions. I think for it to be meaningful, the council would need some actual authority - perhaps control over a small portion of the budget earmarked for youth programs, or veto power over certain spending decisions that directly impact young people. As for selection, I would suggest a combination of approaches - some members elected by high school students, others appointed based on applications and interviews to ensure diverse representation across socioeconomic backgrounds, geographic regions, etc. Maybe even have a rotating membership with 1-2 year terms so more young people get the opportunity to participate.
Honestly this whole argument seems misguided to me. Teens under 18 are still being represented - by their parents or guardians who DO vote. Parents are supposed to consider their children's interests when voting. Same with the standard deduction thing - that's specifically designed to protect low-income earners, including most working teens. As for felons, losing voting rights is part of the punishment for serious crimes in many states. They knew the consequences of their actions. The "no taxation without representation" slogan was about having NO representation whatsoever. These groups still have representation, just not direct voting rights.
That's a really privileged perspective. Not all parents vote in their children's best interests - many vote against policies that would help their own kids based on political ideology. And regarding felons, many states now recognize that permanent disenfranchisement after serving a sentence is counterproductive to rehabilitation and reintegration. That's why so many states have restored voting rights after sentence completion.
Luca Russo
Just a heads up - what you're describing sounds like you want to avoid showing any profit year after year. This is a HUGE red flag to the IRS. Businesses are supposed to make profit eventually - if you never show profit, the IRS might reclassify your business as a hobby, which means you lose a ton of deductions. Look up the "hobby loss rule" - basically if you don't show profit in 3 out of 5 consecutive years, you risk being classified as a hobby, not a business. Then you'd lose all those business deductions.
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Omar Zaki
ā¢Oh wow, I had no idea about the hobby loss rule. So even if I am legitimately reinvesting in my business, I need to show some profit occasionally? Does the amount of profit matter or just the fact that there is some?
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Luca Russo
ā¢The amount of profit doesn't have a specific threshold - it just needs to be genuine profit. The key is demonstrating that you have a profit motive, not just a tax reduction motive. Small profits are fine as long as they're real. What helps is having a business plan that shows your reinvestment strategy is part of a long-term growth plan that will eventually result in greater profits. Documentation is your friend here - keep records showing how your business decisions are commercially reasonable and aimed at eventual profitability.
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Nia Wilson
random person with small business here! i was doing what ur talking about for 2 years - kept reinvesting every dollar back into my business and thought i was being smart with "zero profit" on paper. guess what happened? audit!!! š turns out some of my "business expenses" weren't legit business needs (like that fancy laptop that was way more than necessary). they reclassified like $7k as personal expenses and hit me with back taxes + penalties. not worth the stress!!! now i just plan for reasonable profit + taxes instead of trying to game the system.
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Mateo Sanchez
ā¢What kind of business do you have? I'm wondering because different industries probably have different standards for what counts as a necessary expense.
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