I'm confused about why everyone's focusing just on Schedule C. Couldn't OP potentially use these expenses to qualify for education credits instead? If the courses and software are improving skills related to your current job, they might qualify for the Lifetime Learning Credit. That would be worth looking into!

I faced a similar situation when I transitioned from freelancing to full-time employment. Here's what I learned from working with a tax professional: The IRS requires that Schedule C be used only for legitimate business income and expenses. Without any 1099 income or other self-employment earnings, you can't file Schedule C just to deduct professional expenses related to your W-2 job. However, you have a few potential options: 1. **Start small freelance work**: Even minimal freelance income (say $500-1000) would allow you to legitimately file Schedule C, as long as you have genuine profit motive and aren't just doing it to claim deductions. 2. **Check if your employer will reimburse**: Many employers will cover professional development, software subscriptions, or other job-related expenses if you ask. This is often more valuable than a tax deduction. 3. **Look into state-specific deductions**: Some states have deductions for remote work expenses or professional development that you might qualify for on your state return. 4. **Consider the educator expense deduction**: If you do any teaching or training as part of your work, you might qualify for up to $300 in unreimbursed educator expenses. The key is being honest about your intent and ensuring any business activity has genuine profit motive. The IRS looks unfavorably on arrangements that seem designed primarily to generate tax deductions rather than income.

22 Ugh I made this mistake last year and left a bunch of boxes blank instead of putting zeros. Sure enough, got a letter from the IRS three months later asking me to clarify those sections. Nothing bad happened but it delayed my refund by like 6 weeks. Just put the zeros in!

17 I've been doing my own taxes for 15 years now and ALWAYS put zeros. My tax preparer buddy told me the IRS computer systems are programmed to look for numbers in certain fields, and a blank field can sometimes be interpreted as "this person didn't complete this section" rather than "this value is zero.

Just a heads up about your timing strategy with California - their tax laws are pretty aggressive. If your intent is to move to CA, they might consider you a "part-year resident" for the year and try to tax the capital gain regardless of when you physically receive the money. I'd strongly recommend consulting with a CA tax specialist before proceeding with your plan. Their Franchise Tax Board doesn't mess around!

Your calculation approach looks solid overall! Just wanted to add a few things that might help: 1. Don't forget to include your original closing costs (title insurance, attorney fees, etc.) in your cost basis - those can add up to several thousand dollars. 2. For selling expenses, make sure to deduct realtor commissions, transfer taxes, title fees, and any repairs you make specifically to sell the house from your sale proceeds before calculating gains. 3. Since you mentioned some appliance replacements, the key test is whether they're built-in and add value. A built-in range or dishwasher usually counts, but a standalone refrigerator typically doesn't. 4. Keep digital copies of all your documentation! Scan those faded receipts now while they're still readable. The IRS can ask for proof of improvements up to 3 years after filing. Given your extensive improvements over 30 years, you're in a great position. Just make sure you're being conservative with what you include as capital improvements versus maintenance. When in doubt, err on the side of caution or get professional guidance for the bigger questionable items. Good luck with your move!

Same boat rn. Been checking WMR like a crazy person everyday 👀

call the tax advocate service! They helped speed up my verification process

I'm dealing with a very similar situation with my rental property from 2017-2018! One thing I learned through this process is that you should also check if you qualify for any exceptions to the passive loss rules. If your adjusted gross income was under $100,000 and you actively participated in managing the rental property, you might have been able to deduct up to $25,000 in losses each year even without carryovers from previous years. Also, when you file your amended returns, make sure to include a detailed explanation of the error and attach copies of your original Schedule E and Form 8582 from 2016 showing the unallowed losses. The IRS wants to see the paper trail of where these losses originated and why they weren't carried forward originally. Good luck with your amendments - it's definitely worth pursuing since you're still within the 3-year window for both 2017 and 2018!

Don't forget to also check if you need to file Form 3115 (Application for Change in Accounting Method) along with your amended returns. If your original error was treating rental losses incorrectly as a systematic accounting method issue rather than just a one-time mistake, the IRS might require you to formally change your accounting method. This is especially important if you've been consistently handling rental property losses the same incorrect way across multiple years. The good news is that if Form 3115 is required, you can often get a Section 481(a) adjustment that allows you to claim all the missed deductions in one year rather than having to amend each individual year separately. I'd recommend calling the IRS or consulting with a tax professional to determine if your situation qualifies as an accounting method change. It could actually be a faster path to getting your refund than filing multiple amended returns, and there's no statute of limitations on Section 481(a) adjustments for certain types of rental property accounting errors.