This actually makes a lot of sense. I did claim the American Opportunity Credit this year for my daughter's first year of college expenses. I didn't think about that possibly causing a delay. Is there a list somewhere of what types of claims typically trigger longer review periods?

There's no official comprehensive list published by the IRS (they keep their exact verification triggers confidential to prevent fraud), but common elements that often cause longer reviews include education credits like the AOTC you mentioned, Earned Income Tax Credit, Child Tax Credit, recovery rebate credits, and returns with significant changes in income from previous years. The college credit could definitely be a factor in your delay! The good news is that verification delays at the acceptance stage usually don't impact how quickly you receive your refund once accepted. The system is just doing initial verification checks.

Yes! Filing in the first 2-3 weeks of tax season almost always means longer processing times. The IRS gets flooded with early filers (mostly people expecting refunds) and their systems get backlogged. I deliberately wait until mid-February now, and my acceptance usually comes within 24 hours.

Does that Account Transcript show if you still owe money or if payments were applied correctly? My online account shows I owe $0 but I know that's not right since I just filed yesterday and owe around $3,500.

Yes, the Account Transcript shows your balance due and any payments applied. If you just filed yesterday, there might be a delay before the $3,500 shows up on your account. The transcript will show codes for return filed, assessments, and payments. It usually takes 2-3 business days after your return is accepted for the amount due to appear in your account. Don't worry if it still shows $0 right after filing - that's normal. Just make sure to submit your payment by the deadline even if the balance isn't showing yet.

I checked my TurboTax and didn't see any "View E-file Status" option. Is this only available in certain versions? I used the Premier version but only see a general status that says "Filed" with no details about IRS acceptance.

That's a really good suggestion! I actually hadn't thought about going in person. Do you know how long it typically takes to get an appointment? And did they issue you a new refund on the spot or did you still have to wait?

In my area, I got an appointment about 10 days out - but this was during filing season. It might be faster now. They didn't issue the refund on the spot, but they processed the adjustment while I was there and I received the additional refund about 3 weeks later. One tip: call the appointment line early in the morning when they open. The slots fill up fast.

This is great advice! I also recommend signing up for IRS Transcript access. The transcript will show any pending adjustments or credits that might not be visible elsewhere. It's free and pretty straightforward to set up.

That's a great point about the fees! I didn't realize I could add those to my cost basis. And thanks for the reminder about state taxes - I'm in Illinois and haven't even thought about how they might treat this differently. So if I include the fees in my basis, the capital gain would be $17,380 as you calculated. That would save me some tax compared to reporting the full $18,000!

Illinois follows federal treatment for the most part, but double-check if they have any AMT differences. The fees make a real difference in your case - whenever you're dealing with stock sales, always incorporate the transaction costs into your basis. Be sure to keep all your documentation from the sale and the Form 3921 for at least 7 years. ISO transactions are a common audit trigger because they're often reported incorrectly. Having clear records of how you calculated everything will save you headaches if questions ever come up.

Do you know if TurboTax handles the AMT credit tracking properly? I've heard horror stories about people losing track of their AMT credits and never getting to use them.

Thanks for bringing this up! This is getting complicated fast. How do I determine whether my equipment sale qualifies as Section 1231 gain versus ordinary income? We've owned most of the equipment for 5+ years if that matters.

The timeframe absolutely matters! Generally, if you've held the property for more than one year, the gain is Section 1231 gain (reported on Form 4797 Part I). However, for Section 179 property, there's a recapture provision where the gain up to the amount of the Section 179 deduction is treated as ordinary income, regardless of how long you've held it. Any gain beyond the original Section 179 deduction amount (if you sold it for more than you originally paid) would typically qualify for Section 1231 treatment. Since you've held the equipment for 5+ years, any appreciation beyond your original cost basis would likely get the more favorable tax treatment.

You're right that the basis is zero for fully Section 179 expensed equipment, so any sale amount is entirely gain. For the tax treatment: When you sell Section 179 property, the gain is generally treated as ordinary income to the extent of the depreciation deductions you previously took (this is called "recapture"). So if you Section 179 expensed a $10,000 machine and later sell it for $3,000, that entire $3,000 is ordinary income. However, if you somehow sell it for more than its original cost (say $12,000 for that same machine), the first $10,000 would be ordinary income recapture, and the additional $2,000 might qualify for Section 1231 treatment, potentially giving you capital gain rates on that portion.

That makes sense! Thanks for explaining it so clearly. So basically most of the time when selling fully depreciated business equipment, we're looking at ordinary income. But if we're lucky enough to sell something for more than we paid (rare for most equipment), we might get capital gain treatment on that excess amount.