I've been through a similar situation with inherited rental property and large depreciation deductions. One important point that hasn't been fully addressed is the timing of when you can start taking depreciation on inherited property. You can begin depreciating the property when it's placed in service as a rental, not necessarily from the date of inheritance. If you inherited the property in late 2023 but didn't start renting it out until 2024, your depreciation would begin in 2024. Also, make sure you're using the correct depreciation method - residential rental property is typically depreciated over 27.5 years using straight-line depreciation. Given your stepped-up basis of $1.6M, you're looking at substantial annual depreciation (potentially $50K+ per year depending on the land/building allocation). The active participation exception allowing up to $25,000 in losses against other income is definitely your best route, but consider consulting with a tax professional who specializes in rental property taxation to ensure you're maximizing your deductions while staying compliant with all the passive activity rules.

For anyone dealing with inherited rental property and passive loss rules, I'd highly recommend getting familiar with Form 8582 (Passive Activity Loss Limitations) - this is where you'll actually report your rental losses and apply the active participation exception. The form can be tricky, especially when you're dealing with large depreciation amounts from stepped-up basis property. A few additional considerations that might help: if you're married filing jointly, the $25,000 active participation allowance applies to your combined income, not per spouse. Also, if you have multiple rental properties, the active participation rules apply differently - you need to actively participate in each property to use losses from that specific property. One strategy some people overlook is the timing of other income. If you have control over when you realize capital gains (like selling stocks), you might consider timing those gains strategically to stay below the MAGI thresholds for the passive loss exceptions. Just make sure any timing strategies make sense from an overall financial planning perspective, not just taxes. The documentation everyone's mentioned is crucial - I keep a simple spreadsheet tracking time spent on rental activities, decisions made, and communications with tenants/contractors. Takes just a few minutes each month but provides great audit protection.

I've been dealing with payroll and tax issues for years as a small business owner, and I can confirm that "TOTAL" in Box 20 is becoming more common with automated payroll systems. Here's what I'd recommend: 1. Don't panic - this is likely just a formatting issue, not a calculation error 2. Check your final December pay stub to see the locality breakdown 3. Verify that the sum of individual locality taxes on your pay stub matches Box 19 on your W-2 4. Keep detailed records of your pay stubs showing the specific localities If you moved mid-year like you mentioned, you'll probably need to file local tax returns for both cities. The good news is that most tax software can handle this - you just need to manually split the amounts based on your pay stub information. One thing to watch out for: some localities have different filing requirements or deadlines, so make sure you research the specific rules for both cities where you had taxes withheld. Don't let your HR department's slow response delay your filing if you're close to the deadline.

I work in tax preparation and see this "TOTAL" issue frequently during tax season. What's happening is your payroll system is consolidating multiple locality entries instead of listing them separately on the W-2. This is completely normal when you've had taxes withheld for more than one jurisdiction. Since you moved mid-year, you likely had local taxes withheld for both your old and new cities. The payroll system just summed them up and put "TOTAL" rather than trying to fit multiple city names in that small box. Here's what you need to do: 1. Get your final December pay stub - it should show the breakdown by locality 2. Verify the individual amounts add up to what's in Box 19 of your W-2 3. You'll need to file local tax returns for both cities where you had withholding 4. Keep copies of those pay stubs with your tax records Don't wait for HR if you're close to the deadline. This is a reporting format issue, not a calculation error. You can file confidently using the pay stub details to allocate the amounts correctly between the two localities.

From my experience going through this exact process last year, it took about 4-5 months total from start to finish. Here's roughly how it broke down: - 2-3 weeks to gather all documents and request IRS transcripts for missing forms - 1-2 weeks to actually prepare and file the returns (I did 3 years worth) - 12-16 weeks for the IRS to process and send refunds (as @Maxwell St. Laurent mentioned, prior year returns take much longer) The key is getting organized upfront and not rushing through the document gathering phase. I made the mistake of filing my first return before I had all my transcripts back from the IRS, and ended up having to file an amended return later when I discovered additional income I had missed. One tip that saved me time - I created a simple spreadsheet tracking which documents I had for each year and what was still missing. It helped me stay organized when dealing with multiple tax years and made sure I didn't file incomplete returns. The wait for refunds was definitely the most frustrating part, but seeing those direct deposits hit my account after months of work made it all worthwhile. Don't get discouraged by the timeline - just start the process and let it work through the system!

Just want to echo what everyone else has said about the 3-year rule - it's absolutely critical to understand those deadlines! I learned this the hard way when I discovered some old 1099s from 2018 and got excited thinking I could claim a refund, only to find out I was already past the statute of limitations. One thing I'd add that might be helpful - if you're unsure about whether you even had a filing requirement for some of those years, the IRS has income thresholds that determine if you needed to file. For example, if you were single and under 65, you only needed to file if your gross income was above certain amounts (which change each year). So even if you found old W-2s, you might not have been required to file returns for those years if your income was below the threshold. This could save you some time and effort if you're looking at years where your income was really low. The IRS website has historical filing requirement charts that show the income thresholds for each tax year going back several years. Good luck getting those refunds @Edison Estevez - sounds like you've got a solid plan now thanks to all the great advice in this thread!

I've been following this discussion and wanted to share my experience as someone who was initially panicked about losing the personal exemptions. I'm a single parent with one child under 17, and I was convinced I'd be paying thousands more in taxes. After doing the math (and using some of the tools mentioned here), I discovered I'm actually saving about $800 per year. Here's why: even though I lost my $4,150 personal exemption for myself and my child ($8,300 total), my standard deduction increased by $11,300 ($12,700 to $24,000). That's a net gain of $3,000 in deductions. Plus, my Child Tax Credit doubled from $1,000 to $2,000. The lower tax rates also helped - what used to be taxed at 15% is now taxed at 12%, and what used to be 25% is now 22%. I think the key takeaway from this whole thread is that these changes are really complicated and the impact varies dramatically based on your family situation. The general pattern seems to be: families with young kids usually benefit, families without kids or with older dependents often pay more. But there are tons of exceptions based on income level, deductions, and other factors.

This thread has been incredibly helpful! I'm in a similar boat as the original poster - family of four with two kids under 17. I've been dreading tax season because I kept hearing about "losing exemptions" but didn't understand the full picture. After reading through everyone's explanations and doing some calculations, I think I finally get it. The key insight for me was understanding that deductions and exemptions both reduce taxable income, but tax credits (like the Child Tax Credit) directly reduce what you owe dollar-for-dollar. So even if we have slightly more taxable income due to losing personal exemptions, the doubled Child Tax Credit more than makes up for it. I used the IRS withholding estimator that @Kaitlyn Otto mentioned, and it looks like we'll save about $1,200 compared to the old system. The combination of higher standard deduction, lower tax rates, and increased Child Tax Credit really does seem to work in favor of families with young children. Thanks everyone for breaking this down in such clear terms - definitely feeling much less anxious about our tax situation now!

This is exactly the kind of complex situation where getting expert guidance upfront can save you major headaches later. Based on your wife's visa history - 6 years total with tourist visa initially, then F1 student visa that expired in January 2024 - you're dealing with multiple moving pieces that affect her tax status. A few key points to consider: 1. Since her F1 expired in January 2024 and you're going through the marriage-based green card process, her current status likely affects how the substantial presence test applies for 2024. 2. The fact that she's had no taxable income simplifies things somewhat, but you still need to determine her correct status to choose the right filing approach. 3. Be very careful about the worldwide income reporting requirement if you make any election to treat her as a resident - this catches a lot of people off guard. Given the complexity with mixed visa types, the 5-year F1 exemption period, and the transition to marriage-based status, I'd strongly recommend getting a definitive determination of her tax status before making any elections. The consequences of filing incorrectly with international situations can be significant, and the rules around these elections have specific timing requirements and documentation needs. Have you been able to get copies of all her I-94 entry/exit records? That's usually the starting point for any accurate substantial presence test calculation.

As someone who went through a very similar situation with my spouse from Mexico, I want to emphasize how important it is to get this right from the start. The substantial presence test calculation with mixed visa types is genuinely complex, and the stakes are high. One thing I learned the hard way - even though your wife has no income, you still need to be absolutely certain about her tax status before making any elections. We initially thought the 6013(g) election was a no-brainer since my husband had no income either, but it turns out there can be unexpected consequences down the road. For example, once you make the 6013(g) election, it continues for all subsequent years until you revoke it or certain events terminate it. This means if her status changes again during the green card process, you're still locked into treating her as a resident for tax purposes until you formally revoke the election. Also, don't underestimate the importance of proper documentation. The IRS requires specific statements attached to your return explaining why you're making the election and confirming you understand the obligations. Missing these requirements can invalidate the election. Given that her F1 expired in January 2024 and she's been here 6+ years, definitely focus on getting an accurate substantial presence test calculation first. That will tell you whether you even need to make an election or if she already qualifies as a resident alien naturally. The calculation might be simpler than you think once you properly account for the F1 exemption period rules.