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This happened to me too. The issue is that TurboTax asks about your children in multiple places. Even if you say your ex is claiming them as dependents, there's another section where it asks about qualifying children for Earned Income Credit. If you put their info there, your return will get rejected with that error code.
OMG thank you!! I just checked and you're right - I had their info in the EIC section even though I answered "no" to claiming them as dependents. Deleted their info from that section and resubmitted. Finally went through! Can't believe TurboTax doesn't make this clearer.
Glad it worked out! TurboTax does this annoying thing where it treats the dependent section and the EIC qualifying child section as separate things (which technically they are according to tax law), but they don't make it obvious to normal people. For next year, just remember that if you're not claiming them at all, you generally shouldn't enter their info anywhere in the return.
Has anyone actually called the IRS about this? Their official guidance might be different from what we're all guessing here.
I called them last year about this exact error. 3 hours on hold only to be told I needed to mail in a paper return because their system couldn't handle my specific situation. Complete waste of time.
Don't forget about other deductions beyond just gas/mileage! I do Uber/Lyft part-time and was able to deduct: - Phone mount for car ($25) - Portion of cell phone bill (20% business use) - Car chargers - Dashcam - Snacks/water for passengers (I keep receipts) - Special seat covers to protect from wear and tear - Spotify subscription (for passenger entertainment) Made a big difference on my Schedule C!
Thanks for this list! I hadn't thought about the phone mount or dashcam. Can you really deduct Spotify though? I use it while driving but isn't that kind of a gray area?
You can deduct Spotify if you're using it specifically for your business - like providing music for passengers as part of your service. It's considered a business expense if it's primarily for your customers' experience. If you're just listening to it yourself while doing DoorDash deliveries, that would be much harder to justify as a business expense since there are no passengers benefiting from it. It's all about whether it's necessary for your business operations versus personal enjoyment.
Something I learned the hard way - if you choose standard mileage the first year you use your car for business, you can switch between standard and actual expenses in future years. BUT if you choose actual expenses the first year, you're STUCK with that method for the life of that vehicle in your business. Also, don't forget you can deduct business parking fees and tolls IN ADDITION to the standard mileage rate! Those aren't included in the $0.67/mile.
Yup, this is super important! I made that mistake with my first delivery car. I used actual expenses the first year when the car was new and had higher value for depreciation. When the car got older and needed fewer repairs, standard mileage would have been better but I was stuck with actual expenses. For parking and tolls - gig drivers should use apps that track these separately! I use the Stride app for mileage and the Everlance app to snap photos of parking receipts. Makes tax time way easier.
Thanks for pointing this out! I didn't realize that choosing actual expenses would lock me in for the life of the vehicle. That's definitely something to consider since I might keep this car for several years. And I had no idea about the parking fees and tolls! I've probably spent around $200 on parking in downtown areas for pickups/deliveries. Good to know I can deduct those on top of the standard mileage.
Just a heads-up that prepaying property taxes to maximize deductions doesn't always work as expected. I tried to prepay a bunch of my property taxes in December 2020 to get under the SALT cap, and my accountant said some of them weren't deductible because they weren't actually "assessed" yet. Apparently there's a rule that you can only deduct property taxes that have been officially assessed by the taxing authority. So if your second installment has been assessed (meaning you have an official bill), you should be fine to pay and deduct it early. But if it's not technically assessed yet, you might run into issues.
Does this apply to supplemental property tax bills too? I thought those were different since they're retroactively assessing tax for periods before the bill was created.
Supplemental property tax bills are actually a good example of properly assessed taxes. Since the supplemental bill has already been issued with specific amounts and due dates, it has been officially assessed by the tax authority. The concern I was mentioning applies more to trying to prepay future regular property tax installments that haven't been billed yet. With supplemental bills, both installments are typically assessed at the same time when the bill is issued, even though the second payment is due months later. So paying both installments in the same tax year for deduction purposes is usually fine with supplemental bills.
Have any of you ever had success getting your supplemental property tax bill reduced? We just got a MASSIVE one from when we bought in 2021 (apparently backlogged due to covid). The assessment seems way off compared to what we actually paid for the house.
The limited definition problem extends beyond just progressive taxation. I teach economics, and textbooks routinely oversimplify tax concepts to make them easier to teach, which unfortunately gets repeated everywhere. Real-world tax systems are incredibly complex with multiple overlapping philosophies. For example, the US corporate tax system has elements of: 1) Income-based progression (higher rates on higher income) 2) Industry-specific rates (differential taxation) 3) Behavior-based incentives (R&D credits, etc.) 4) Profit-rate considerations in certain cases But students only learn the basic "tax rate increases as income increases" definition, which gets repeated throughout their education and careers. It's similar to how we teach supply and demand curves as always being straight lines when they rarely are in reality.
Do you have any recommended books or resources that give a more nuanced view of progressive taxation beyond the textbook definition?
For a more nuanced understanding, I recommend "Taxing Ourselves" by Joel Slemrod and Jon Bakija - it explores different tax bases and structures without getting stuck in the income-only paradigm. "The Triumph of Injustice" by Saez and Zucman also has excellent discussions of wealth-based progressive taxation alternatives. For historical perspectives, "Fiscal Regimes and the Political Economy of Premodern States" edited by Monson and Scheidel provides fascinating examples of progressive taxation based on various metrics across different civilizations. These sources paint a much more complete picture than standard economics textbooks.
I actually wrote my dissertation on this exact topic! The reason "progressive taxation" is so narrowly defined is because of a deliberate political choice in the early 20th century. When modern income tax systems were being developed (1910s-1930s), there were competing proposals for progressive taxes based on wealth, land value, corporate profit rates, and income. The income-based approach won out partly because it was easier to implement with the administrative capabilities of the time, but also because it was less threatening to accumulated wealth. A progressive wealth tax would have directly challenged the existing power structures more than income taxes. By focusing the definition of progressive taxation exclusively on income, it shifted the burden to high-income earners while protecting those with substantial accumulated wealth. This definition then became codified in academic literature, policy discussions, and eventually public understanding.
Keisha Johnson
Did you file an extension earlier this year? Sometimes when you file an extension and then try to submit your actual return, you can get weird reject codes if there's any discrepancy between the information on the extension and your final return.
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Paolo Rizzo
ā¢This happened to me! I had filed an extension and when I finally did my taxes, I got rejected because I had typed my SSN wrong on the extension form. Had to call the IRS to sort it out. Super annoying.
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QuantumQuest
Another possibility for this error code is if you've been a victim of identity theft. If someone has already filed a fraudulent return using your SSN, you'll get rejected when you try to file the legitimate one. Might be worth checking if you have any other signs of identity theft.
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Dylan Campbell
ā¢Oh man, that's scary. I haven't noticed anything unusual with my credit or accounts, but now I'm worried. How would I check if someone filed a fraudulent return with my info?
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