Thanks for bringing this up! My rental actually shows a small profit after expenses, so I don't think I'll run into the passive activity loss limitation. But for future reference, what are the income limits for being able to deduct rental losses against W2 income?

If your rental shows a profit after all expenses, then you're right - the passive activity loss limitations won't affect you this year. For those who do have rental losses, you can deduct up to $25,000 in losses against other income (like W2 wages) if your modified adjusted gross income (MAGI) is under $100,000 and you "actively participate" in the rental. This deduction phases out between $100,000-$150,000 MAGI, and once you're over $150,000, you generally can't use rental losses to offset non-passive income unless you qualify as a real estate professional.

That's actually not correct. Mortgage interest deductions don't reduce your basis in the property. You're thinking of depreciation, which is a separate deduction that does reduce your basis and gets recaptured when you sell. Interest expense is just an operating expense - it has no impact on basis or future capital gains calculations.

But credit cards and ACH aren't the same thing. With credit cards, the merchant gets paid immediately by the card company. With ACH, the money doesn't move until it processes. There's a difference, right? I'm genuinely asking because I'm in the same boat with some year-end donations.

You're right that there's a technical difference between credit cards and ACH transfers. With credit cards, the charge is processed immediately even though you pay your bill later. For ACH transfers, the key factor is whether you could cancel the transaction after initiating it. Most ACH donations create an irrevocable commitment when submitted, even if the funds don't move for 1-2 days. If you couldn't cancel it after submission on December 31, then it counts as a 2024 donation regardless of when the money actually moved. The critical point is when you surrendered control of the funds, not when they physically transferred.

Not worth the risk imo. My cousin got audited over charitable donations last year and had to provide receipts showing exact dates for everything. Better to just do it right the first time.

Should I mention that I actually did try to file through a relative but they messed it up? My situation was similar - I was hospitalized for 2 months and asked my brother to handle my taxes, but he completely forgot until after the deadline.

Yes, definitely mention that you took reasonable steps by asking your relative to help. That shows you recognized your tax obligation and actively tried to meet it despite your hospitalization. Explain that you delegated this responsibility while you were unable to handle it yourself, which demonstrates your intent to comply. Make sure to emphasize that you made what you believed was a reasonable arrangement given your medical situation, but circumstances beyond your control still prevented timely filing. The IRS is generally understanding when you can show you made good faith efforts to comply despite serious limitations.

TurboTax has a feature that helps identify if you qualify for penalty abatement and gives you guidance on requesting it. I used it last year after missing a deadline due to a family emergency, and it made the process pretty straightforward.

This is brilliant! I hadn't thought about proving where I actually was during that time. I can definitely get my class schedule, campus card swipes, and my work-study timesheets from the university admin office. Did you just compile all this into a packet? And did you send it to the IRS attorney directly or submit it through the Tax Court system?

I compiled everything into a single PDF with a cover page that had my name, tax ID (last 4 digits only), tax year, and case number. I included a simple timeline showing how my documented whereabouts made it impossible for me to have worked at the company in question. I actually did both - I submitted it formally through the Tax Court DAWSON system AND sent a courtesy copy directly to the IRS attorney once they were assigned to my case. The direct approach with the attorney was what moved things along quickly. They appreciate organized evidence that makes their job easier. When the IRS attorney contacts you (they will), be polite and professional but also very clear about your evidence. They're often reasonable people who don't want to waste court resources on cases they're likely to lose.

This happened to my roommate! He had a CP3219A for income from a "consulting company" that had dissolved. Turned out someone had used his SSN for employment. The red flag was that the company was in Nevada, but he'd never even been to Nevada. OP should definitely check if the company was in a location that doesn't make sense for a college student. That strengthens the identity theft argument.

We don't have student loans but that's a really good point I hadn't even considered! Do you use an accountant to figure out all the deductions for your different income sources or do you DIY with software?

We used TurboSelf-Employed the first year which was okay but missed some deductions. Now we use an accountant who specializes in small businesses and it's been worth every penny. She found so many legitimate deductions we didn't know about, especially for my wife's freelance work. The accountant fee is about $450 but she saves us at least triple that amount. Plus she helps us with quarterly estimated payments which was a mess before we got professional help.

Yeah, and be careful with the simplified option vs. regular method for home office. Sometimes the simplified $5/sq ft (up to 300 sq ft) is easier but might give you less deduction than calculating actual expenses percentage.