Watch out for state tax implications! The federal insolvency exclusion doesn't automatically apply to state taxes. I learned this the hard way last year when I excluded $18k from my federal return using Form 982, but my state still counted it as income! Had to file an amended state return with additional documentation. Some states follow the federal treatment, but others have their own rules for canceled debt.

One thing to be very careful about is the order of operations when you have multiple exclusions that might apply. If you qualify for both the insolvency exclusion AND the deductible debt exclusion under IRC 108(e)(2), you generally want to apply the deductible debt exclusion first since it doesn't reduce your tax attributes (like basis in assets or NOL carryforwards). The insolvency exclusion comes with attribute reduction requirements that can affect future tax benefits. So if part of your $15,600 was business debt that would have been deductible, calculate that exclusion first on Form 982, then apply insolvency to any remaining amount. Also, keep detailed records of your insolvency calculation worksheet. Even if you don't get audited, having everything documented will save you headaches if the IRS has questions years later. I recommend creating a file with all your asset valuations, debt statements, and the exact date each debt was canceled.

Has anyone run into issues with the annual contribution limits while trying to maximize ABLE account growth? I'm debating whether to: 1) Contribute the max each year and reimburse expenses as they happen 2) Contribute less but let it grow longer by delaying reimbursements I'm worried about hitting the state's maximum account limit ($300k in my state) if I go with option 2.

Great question! I'm in a similar situation on SSDI and have been doing exactly what you're describing for about 2 years now. I save all my QDE receipts and reimburse myself strategically to maximize growth. The key insight is that unlike HSAs which have explicit IRS guidance on reimbursement timing, ABLE accounts operate in more of a gray area. Since you're not on SSI, you don't have the same-month restriction, which gives you significant flexibility. I've been keeping a detailed spreadsheet tracking: original expense date, amount, what makes it a QDE, receipt/documentation location, and whether I've reimbursed it yet. My CPA reviewed this system and confirmed it should hold up to IRS scrutiny. One thing to consider - while there's no explicit time limit, I'd recommend being reasonable about it. Reimbursing a medical expense from 15 years ago might raise eyebrows, but 3-5 years seems very defensible, especially with good documentation. The compound growth potential is real - my account is up 18% this year while I've been letting eligible expenses accumulate. Just make sure you're prepared to provide detailed documentation if ever questioned about the connection between your withdrawals and the original QDEs.

Just a quick tip - whenever you mail tax payments to ANY tax agency, always get a tracking number from USPS, FedEx or UPS. It costs a few bucks but gives you proof of when you sent it and when they received it. Has saved me from late payment penalties more than once when the tax office claimed they "never received" my payment. That tracking number receipt is gold when disputing penalties!

Has anyone had luck with paying Arizona taxes online instead of mailing payments? Their website looks confusing and I'm not sure if I need to register for something special first. Might be easier than dealing with addresses and mail.

You're absolutely right to be cautious about those numbers! Yes, since you don't have earned income, your standard deduction as a dependent would be limited to $1,150 for 2024. With $750 in gambling winnings, you'd have $750 - $1,150 = $0 taxable income, so you shouldn't owe any federal income tax. However, the key question is whether FanDuel withheld any taxes from your winnings. If they did withhold federal taxes (which they sometimes do for larger winnings), that's where your refund would come from - getting back taxes that were withheld but not actually owed. Check your 1099-MISC from FanDuel in box 4 to see if any federal income tax was withheld. If there's an amount there, that's likely what FreeTaxUSA is showing as your potential refund. If box 4 is blank or $0, then you probably won't get a refund but you also shouldn't owe anything either. Make sure when you're in FreeTaxUSA that you've selected "Someone can claim you as a dependent" so it calculates everything correctly with the limited standard deduction!

Perfect! It sounds like you've got everything figured out now. Just to add one more thing for peace of mind - since you and your fiancé are in this situation where he's claiming you as a dependent, you might want to keep good records of your respective tax filings in case the IRS ever has questions. It's pretty straightforward when done correctly (which it sounds like you're doing), but having documentation that shows he meets the requirements to claim you as a qualifying relative dependent, and that you filed correctly as someone who can be claimed, just helps if there are ever any questions down the road. Congrats on the FanDuel win and getting that $180 back! Sounds like you'll be filing correctly and everything will work out smoothly.

This is such a timely question! I just went through this exact scenario with a duplex I bought in 2019 and converted to rental property last year. Like you, I noticed the county assessments fluctuated quite a bit - from 18%/82% in 2019 to 23%/77% in 2024. After consulting with my tax advisor, we definitively used the 2019 assessment percentages. The key phrase in Publication 527 that sealed it for me was "at the time you buy it" - this clearly establishes that your cost basis allocation should reflect the property's composition when you acquired it, not when you put it into service as a rental. Here's what I did for documentation: 1. Downloaded and saved the 2019 county assessment showing the land/building breakdown 2. Created a calculation worksheet showing: Purchase price × 2019 land percentage = non-depreciable land value 3. Kept a copy of the relevant section from Publication 527 with my tax records One thing to watch out for - make sure you're looking at the assessment that was in effect for your 2016 tax year, not necessarily the assessment date closest to your purchase date. Sometimes counties do mid-year reassessments that might not reflect the values at your time of purchase. You're definitely on the right track using the 2016 percentages!

You're absolutely right to use the 2016 assessment percentages! I went through this same situation when I converted my primary residence to a rental property. The IRS is very clear in Publication 527 that the allocation should be based on values "at the time you buy it." I made the mistake initially of using current assessment percentages when I first prepared my depreciation schedule, but my tax preparer caught it and we had to revise everything. Using the purchase-year percentages is not only the correct method according to IRS guidance, but it also makes logical sense - you're establishing your cost basis based on what you actually acquired back in 2016. Make sure you save a copy of the 2016 county assessment records showing those percentages. If your county website doesn't go back that far, you can usually request historical records from the assessor's office. Having that documentation in your tax files will be invaluable if you're ever questioned about your depreciation calculations. The fact that the percentages have fluctuated over the years actually reinforces why the IRS specifies using the purchase-date values - it prevents taxpayers from cherry-picking favorable percentages from different years.