This is potentially dangerous advice without more context. Real estate professional status is one of the most audited areas by the IRS. Unless the original poster actually works in real estate as their primary profession, they almost certainly won't qualify. Having one rental property with some repair issues isn't enough to meet the substantial requirements for this status.

You're right that it's heavily scrutinized, and I should have been clearer. Real estate professional status typically requires working in real estate full-time and having multiple properties. For someone with just one condo that had issues, it's unlikely they'd qualify. A more realistic approach for most people is to ensure all legitimate expenses are captured on Schedule E, properly document everything, and then carry forward losses to future tax years when they can be used against rental income or when the property is sold.

That's interesting - I hadn't considered the casualty loss angle. The water damage was definitely sudden and unexpected (a pipe burst in the wall). Do you know how this would work with the insurance payments I received? The insurance covered about 85% of the damage, but I still had out-of-pocket costs.

Really appreciate the idea about the Chamber of Commerce - never would have thought of that! And good point about setting up systems for the future. Do you find QuickBooks easy to use for someone who's not naturally organized?

QuickBooks Self-Employed is pretty user-friendly, even for the organizationally-challenged! It connects to your bank accounts and payment apps, then automatically sorts transactions. You just need to review them occasionally to make corrections. The mobile app is super convenient - you can snap pictures of receipts on the go, and it has automatic mileage tracking. My accountant did an hour-long setup session with me to customize categories for my specific business, which made a huge difference. The key is consistent small efforts rather than trying to sort everything at tax time.

I checked out the NATP site and found three CPAs in my area who list cryptocurrency experience! Thanks for this tip - seems much more targeted than just googling "accountant near me" which is what I was doing.

I used TurboTax but I paid for it with my credit card during filing, so the fees definitely weren't taken from the refund. The weird thing is that the IRS "Where's My Refund" tool shows the full amount, but what's pending in my bank is less. That's what has me so confused.

In that case, it's almost certainly an adjustment or offset of some kind. One thing to check - did you receive all of your stimulus payments during COVID? Some people who claimed the Recovery Rebate Credit had it adjusted by the IRS if their records showed the stimulus was already paid. Also worth checking if your bank might have put a temporary hold on part of the deposit, though that's less common.

This happened to me too! I had a partial deposit and freaked out, then 4 days later the rest showed up. The IRS never explained why they split it. Something about fraud prevention maybe?

That's an interesting option I hadn't thought about. Would I still need to file anything special for 2022 and 2023 to show that I'm now applying that excess to 2024? Or does just paying the penalty take care of it?

You would need to file Form 5329 for tax years 2022 and 2023 to pay the 6% excise tax for each of those years. Then when you do your 2024 taxes, you would indicate that you're applying prior year excess contributions to your 2024 contribution limit. The important thing is that you don't make a full contribution for 2024 if you're applying the excess from 2022. For example, if the 2024 limit is $7,000 and you're applying $4,630 from 2022, you would only be able to contribute an additional $2,370 for 2024. It's a good option if you're short on cash but still want to maintain your retirement savings.

The Roth income limits also increased for 2024. For single filers, the phaseout range is now $146,000-$161,000. So if OP's income is similar to 2022 (around $140k), they might be fully eligible this year without any phaseout.

That's a good point. With the new higher income phaseout ranges, OP might not run into the same problem for 2024. But they still need to address that 2022 excess contribution issue regardless of their current situation. Leaving it unresolved means continuing to pay that 6% penalty year after year.

1 Thanks for this suggestion! I just checked my paystubs and you're absolutely right - my first employer continued to withhold for Colorado even after I moved to Washington. No wonder I owe so much! Is there any way to fix this after the fact or am I just stuck paying what I owe now?

9 Unfortunately, you generally can't fix it after the tax year has ended - you'll need to pay what you owe now. But you should immediately contact your payroll department to correct it for this year so you don't have the same problem next tax season. For this year's taxes, make sure you're filing as a part-year resident for Colorado and indicating the correct dates you lived in each state. That will at least ensure you're only paying Colorado tax on income earned while you were actually living there.

18 Colorado and Washington don't have a reciprocity agreement, but that's actually not relevant in this case anyway. Reciprocity agreements typically apply to people who live in one state but work in another. Since Washington has no income tax, there's no double taxation issue here. The problem is more about proper withholding and filing correctly as a part-year resident. The OP needs to file a part-year return for Colorado, reporting income earned while a resident there (plus any Colorado-sourced income after moving).

16 That makes sense, thanks! I was confusing reciprocity with something else. Sounds like moving to a no-income-tax state should be beneficial in the long run, even if it causes some confusion in the transition year.