How much did that cost in legal fees though? Was it worth the hassle compared to just paying and moving on?

The attorney took 35% of what we recovered, but I didn't have to pay anything upfront. It was definitely worth it since I recovered about $8,500 after the attorney's cut, and I only had to participate in a couple of meetings and a deposition. The case never went to trial because the preparer's insurance company decided to settle once they saw the evidence. The whole process took about 6 months. Not a huge hassle considering the money recovered, and it felt good holding the preparer accountable.

Yes! Absolutely do this. My neighbor reported a bad preparer and it actually helped her case because the IRS was already investigating them for multiple issues. They were more willing to work with her on penalties.

Thanks for the suggestion about Form 14157! I hadn't even thought about reporting the preparer, but that makes total sense. I'll definitely do that. My CPA actually mentioned that they've seen other clients who used the same person with similar issues, so it seems like this person has a pattern of preparing inaccurate returns.

1 Thanks for the advice! I didn't even think about depreciation. Is that something I calculate myself or do I need an accountant? And are there any military-specific deductions I should know about with this setup?

10 Depreciation is actually pretty straightforward for residential rental property. The IRS lets you depreciate the building portion (not the land) over 27.5 years. You'll need to determine what portion of your purchase price was for the building vs. land - your property tax assessment often breaks this down, or you can use a reasonable estimate like 80% building/20% land in most areas. As for military-specific deductions, you can deduct unreimbursed moving expenses (still available for military even though civilians lost this deduction), and you may be able to exclude combat pay if applicable. If you paid state taxes in non-resident states where you were temporarily stationed, you might get credits for those in certain situations. I'd recommend talking to a military-experienced tax professional your first year with this setup.

24 I've tried several and had the best luck with FreeTaxUSA. It handles the Schedule E for rentals really well and asks all the right questions about military service. Plus it's way cheaper than TurboTax especially if you have rental income - TurboTax forces you into their premium version for that.

22 Thanks! I'll give FreeTaxUSA a try. TurboTax was charging me nearly $200 for the premium version plus state filing, which seems excessive considering we get free filing options through Military OneSource.

Does this work the same way if I use FreshBooks instead of QuickBooks? I find the asset tracking in FreshBooks a bit confusing for trade-ins.

FreshBooks handles fixed assets a bit differently than QuickBooks. In FreshBooks, you'll need to create a new expense for the full amount of the new laptop, then create a "credit" entry for the trade-in value. It's not as automated for calculating the remaining book value, so you'll need to know the remaining undepreciated value of your old laptop. If you're using FreshBooks, I'd recommend creating a simple spreadsheet on the side to track your fixed assets, their original purchase prices, accumulated depreciation, and current book values. This makes it much easier at tax time and ensures you're reporting everything correctly when you have trade-ins or sales of business equipment.

Thanks for the example! Did you handle this with regular depreciation or did you use Section 179 to expense the whole thing in the first year? Also, did you have to fill out any special forms for the "like-kind exchange" part?

Do you need to qualify for the Taxpayer Advocate Service? I thought they only help in hardship situations or when you've been trying to resolve an issue for a long time without success.

You're right that the Taxpayer Advocate Service typically helps with hardship situations or cases where you've made multiple attempts to resolve an issue with the IRS without success. They prioritize cases where people are facing immediate negative financial impact, like the threat of losing housing or transportation. In most tax debt situations, especially ones with liens or levies threatened, you'll likely qualify for their help. But even if you don't qualify for their full service, they can still point you toward the right resources. They're one of the few truly free options available, and they work for the taxpayer, not the collection division of the IRS.

I did this successfully last year. Called the IRS (took forever to get through) and set up a payment plan for $22,000. First, I requested Currently Not Collectible status which they granted for 6 months when my income was really low. Then I set up a $250/month payment plan after I got a new job. They were actually reasonable to work with once I finally reached someone.

I tried the DIY approach and messed it up badly. Filed the wrong form for an OIC and got rejected, which reset my collection timeline. I think it depends on how complicated your situation is and how comfortable you are with tax forms.

You should definitely cash it! Government checks expire after one year, but you can request a replacement. It's your money! Even if it's a small amount, why give it back to the government? Plus, not cashing it might cause accounting discrepancies in their system.

That's good to know about the one-year expiration. I'll dig through my files and see if I can still find it. You're right that it's silly to give money back to the government even if it's just a dollar and change. As for discrepancies, that makes sense. I never thought about how it might mess up their accounting if the check is never cashed. I'll be more careful with any future random checks!

I looked really closely at the check and you're right! There is a tiny code printed at the bottom edge that says "INT-2024". Must be interest payment for 2024 processing like you said. Mystery solved! Thanks for this tip - I would have never noticed that tiny print.