


Ask the community...
My favorite tax meme is the one where Bernie Sanders is sitting at Biden's inauguration with his mittens and it says "Me waiting for my tax refund." Another classic is the Game of Thrones "Brace yourself, tax season is coming" meme! Does anyone else feel like the waiting for refund memes hit different this year? The processing delays seem even worse than usual.
That Bernie one is amazing! š My personal favorite is any variation of the "My face when I realize I've been claiming 0 dependents all year but the government still wants more money" with that shocked Pikachu face.
The shocked Pikachu face is absolutely perfect for tax season! There's also a great one with Leonardo DiCaprio from The Wolf of Wall Street saying "You guys are getting refunds?" that makes me laugh and cry at the same time. The waiting does seem worse this year! I filed in early February and I'm still stuck in the "processing" limbo. The memes help me cope but my bank account is not amused.
I saw one where it shows the IRS as Michael Scott from The Office saying "I am not superstitious, but I am a little stitious" with the caption "The IRS requiring receipts for exactly $599 but not $600" and I think about it every time I do my self-employment taxes.
Wait is that actually true? I thought the threshold was $600 for 1099s? I've been tracking all my freelance income but now I'm confused...
Is anyone using tax software for their 1041s? I tried TurboTax but it seems really limited for estate returns. My estate has capital gains from selling the house plus some dividend income that needs to go on K-1s.
I used H&R Block Premium for my mom's estate and it handled the 1041 and K-1s pretty well. It asked questions about estate income sources and guided me through allocating between the estate and beneficiaries. Better than TurboTax for this specific situation IMO.
For what its worth, I used a CPA for the first time last year after starting my consulting business and it was tooootally worth the $350. She found so many deductions I would've missed (home office, partial internet/phone, mileage) that saved me like $2k in taxes. Plus she showed me how to track expenses better for this year. Just make sure you find someone who specializes in small business if thats your situation!
How did you find your CPA? Did you just google or get a referral? I'm worried about ending up with someone who doesn't know what they're doing.
I got a referral from another small business owner friend - definitely the way to go if possible! Ask around to people in similar situations as yours. If that's not an option, check reviews but specifically look at responses from people with tax situations similar to yours. A good interview question is asking potential CPAs about their experience with your specific situation (side business, interstate move, etc). If they start immediately mentioning specific deductions or considerations for your situation without prompting, that's usually a good sign they know their stuff!
Honesty, i think it depends on how much your time is worth. My taxes are complicated (investments, rental property, small business) and I could probably figure it out myself with enough research but it would take me DAYS. I pay my CPA $400 and he handles everything. peace of mind + time saved = worth every penny to me.
That's a really good point about the time aspect. I spent like 6 hours just trying to figure out how to categorize my side business expenses last year with the software, and that was before all these new complications. Maybe paying someone is worth it just for the stress reduction alone!
Just a heads up - the 1098-T that schools send out goes to the IRS too, so they'll know if you received one and didn't report it. My cousin tried skipping his a few years back and got a letter from the IRS about 6 months later asking why the information didn't match their records. It turned into a huge hassle with him having to file an amended return. The penalty wasn't huge but the stress and paperwork definitely wasn't worth it. Just include it even if you think you won't get much back.
Did your cousin actually get penalized financially or just had to correct his taxes? I'm still on the fence about how much effort I want to put into this for potentially just a few bucks back.
He had to pay a small accuracy-related penalty of about $50 plus interest on the additional tax he ended up owing after properly reporting everything. The bigger pain was having to go through the amended return process which took months to resolve. The thing is, you might be leaving more money on the table than you realize. When properly claimed, education credits can be worth up to $2,500 for the American Opportunity Credit. Even if you only got $69 last year, it's worth double-checking if you entered everything correctly before deciding it's not worth the effort.
A tip from someone who processes financial aid: Make sure you're differentiating between loans and grants correctly on your taxes. Grants that exceed your qualified education expenses (tuition, fees, books) may actually be taxable income, while loans aren't taxable but can count toward education credits. For the American Opportunity Credit specifically, there's a specific order of operations that determines how much you can claim. If your grants covered everything, you might not qualify for much. But if loans paid for even part of it, you could be eligible.
Do you have any tips for figuring out if grants were used for qualified expenses vs living expenses? My 1098-T just shows the total amount billed and total scholarships/grants, but doesnt break down what was used for what.
Giovanni Martello
Just wanted to add one more complication with UCO specifically - it's not just a regular PTP, it's also a commodity pool which has some additional tax wrinkles. With UCO, you're supposed to use "marked to market" accounting at year end (form 6781), and your gain is treated as 60% long term and 40% short term regardless of your holding period. Make sure you're following the special rules for commodity pools as well as the regular PTP rules we've been discussing. I got burned by this when I first invested in UCO.
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Bethany Groves
ā¢Oh man, seriously? I had no idea about the commodity pool aspect. Does this apply even if I've already sold everything? Do I need to amend my previous returns?
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Giovanni Martello
ā¢If you've already sold everything and have filed returns for those years, you might need to amend if you didn't report it correctly as a commodity pool. The IRS can go back generally 3 years for audits (6 years in some cases), so returns filed for 2022 are still potentially in the window. The marked-to-market treatment means you should have been reporting gains or losses at the end of each year based on the fair market value, even if you didn't sell. And yes, the 60/40 split between long-term and short-term capital gains applies regardless of how long you held the investment. It's definitely worth consulting with a tax professional who has experience with commodity pools.
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Savannah Weiner
Has anyone used TurboTax to handle PTPs like UCO? I'm wondering if the software can handle all these complicated basis adjustments or if I need to calculate everything manually before entering it.
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Levi Parker
ā¢I tried using TurboTax for my PTP investments last year and it was a nightmare. The software doesn't really guide you through the basis adjustments properly. You basically have to calculate your adjusted basis manually and then just enter the final numbers. The interview questions don't cover the specifics of PTPs at all.
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