Thanks for this advice! How far back should we go with documentation? We have most bank records for the past 7 years, but the earlier years might be harder to track down. Also, does having our names on utility bills help establish our "beneficial ownership" claim?

Try to gather documentation going back as far as possible, but the past 7 years should be sufficient for most IRS purposes since they typically don't look back further than that for audits. If you can show a consistent pattern of payment responsibility, that strengthens your case. Utility bills in your names are excellent supporting evidence! They help establish that you were truly treating the property as your primary residence. Also gather any documentation showing you were responsible for property taxes, insurance, maintenance and repairs. The more comprehensive your paper trail showing you were acting as the true owners, the stronger your position.

That's technically correct but comes with significant risks in this situation. The OP mentioned trust issues with the father-in-law, so leaving the property in his name creates vulnerability. Also, they need the proceeds now for their new home purchase, so waiting isn't practical.

Did you find the new accountant through a referral or did you just search online? I'm thinking I might need to do the same thing but I'm not sure how to find someone reliable.

I got a referral from a coworker who also does freelance work on the side. Personal referrals are definitely the way to go if possible since online reviews for tax professionals can be hard to trust. If you don't have any personal referrals, I'd recommend looking for an Enrolled Agent (EA) rather than just any tax preparer. They're specifically licensed by the IRS and tend to be more knowledgeable about tax code than the seasonal preparers at big chain tax services. Local small business associations sometimes have lists of reputable tax pros who work with self-employed individuals.

QBI is so confusing! My accountant says I don't qualify because my business is a "specified service business" (I'm a consultant) and my income is too high. Is there a simple way to know if I should be getting this?

Is it better to track actual expenses or just use the standard mileage deduction? I've been keeping gas receipts but not sure if that's enough.

For most gig drivers, the standard mileage deduction is simpler and often more beneficial than tracking actual expenses. The standard rate (58.5 cents per mile for 2024) is designed to cover gas, maintenance, depreciation, and insurance, so you don't need to keep all those individual receipts. If you choose actual expenses, you need to track EVERYTHING - gas, oil changes, repairs, car washes, depreciation, insurance, etc., and then figure out the business percentage of use. You also need to keep meticulous records. For most people doing Instacart or Uber Eats part-time, the standard mileage rate is the way to go. Just make sure you keep a detailed mileage log with dates, starting/ending locations, miles driven, and business purpose.

Same thing happened to my boyfriend! Door dash sent him a 1099 even though he only made like $600, and he ignored it. Got a scary letter from the IRS six months later and ended up owing the original tax plus penalties. Not worth the stress.

This is so true. Same thing happened to me but with medical bills. Had to put a $2,200 procedure on credit at 24% interest while my money was sitting with the government earning me exactly 0%. Never again!

That's a really good way to put it. I'm going to remember that one. Do tax preparers generally help with figuring out the right withholding amount?

Most definitely! A good accountant or tax preparer won't just file your return - they should help with tax planning throughout the year. Mine sends quarterly checkup emails to make sure my withholding is still on track based on any life changes (marriage, new job, etc). Just remember that their advice is only as good as the information you give them. If your situation changes significantly during the year (big bonus, side income, etc.), you should reach back out to adjust accordingly.

That's really helpful to know! Do you happen to remember what that special rule for the Earned Income Credit was called? I'd like to look it up so I can mention it specifically when I talk to another tax preparer.

The special rule relates to disability benefits that are taxable in the year you reach minimum retirement age. If you receive disability benefits from an employer plan and report them as wages, those can count as earned income for the EITC until you reach minimum retirement age. It's in IRS Publication 596 under "Disability Benefits and the EIC." The exact wording gets technical, but basically, if you're getting taxable disability benefits and haven't reached retirement age, you might qualify. It made a huge difference for my sister's refund.

I used FreeTaxUSA last year with SSDI and a dependent. It worked well and asked all the right questions about my disability income and how it was reported. They had specific sections for disability benefits and walked through all the potential credits. Don't use the totally free version though - spend the extra $7 or whatever for the deluxe version which gives you better support for credits and deductions. Saved me way more than that $7 in the end.

Thanks for the recommendation! I'll check out FreeTaxUSA. The $7 upgrade sounds worth it if it helps find all the credits. Did they handle state taxes well too or just federal?