Don't forget about the Real Estate Professional status if you spend significant time managing your properties! If you qualify (750+ hours annually in real estate activities and more than half your working time), your real estate losses are no longer subject to the passive loss limitations. This means you could potentially deduct ALL of your losses against other income with no $25k limit or phase-out based on income. This has been a game-changer for my tax situation with my real estate LLC. Just make sure you keep EXTREMELY detailed time logs if you claim this status - the IRS scrutinizes these claims heavily.

Great question! I went through something very similar last year with my rental property LLC. One important thing to add to the excellent advice already given - make sure you're categorizing your $27,500 in repairs correctly between repairs vs. improvements. Regular repairs (like fixing plumbing issues) are fully deductible in the year incurred, but major improvements (like a new roof or HVAC system) typically need to be depreciated over time. The new roof and HVAC might be considered improvements that get depreciated over 27.5 years for residential rental property. However, there are some exceptions - if these were necessary to bring the property up to rentable condition when you first acquired it, they might be treated differently. Also, look into the "safe harbor" rules for small taxpayers - if your average annual gross receipts are $27 million or less (which applies to most individual investors), you might be able to deduct up to $10,000 per building in improvements. Since you're planning to use TurboTax, it should help guide you through these distinctions, but it's worth understanding the difference before you start. Consider keeping detailed records of what exactly was done and why - this documentation could be crucial if you're ever audited.

I'm in a very similar situation and this thread has been incredibly helpful! I filed my Form 843 back in February for FICA taxes that were incorrectly withheld from my consulting work - my client's payroll company mistakenly treated me as a W-2 employee when I should have been issued a 1099 as an independent contractor. It's now been about 4 months with zero communication from the IRS, and the refund amount is around $1,850. Like everyone else here, I've been obsessively checking my online transcripts hoping to see some sign of progress, but there's literally nothing there about Form 843 processing. What's been most frustrating is the complete lack of any tracking system. With regular tax refunds, you at least get basic status updates, but Form 843 claims just disappear into a black hole once submitted. I've tried calling the IRS twice but gave up after being on hold for hours each time. Reading through everyone's experiences here has been both reassuring and eye-opening. It's comforting to know that 6-9 month wait times seem to be the unfortunate norm right now, and that radio silence doesn't necessarily mean the paperwork was lost or rejected. But it's also concerning that there's essentially no way to get updates during this entire period. I'm definitely planning to contact the Taxpayer Advocate Service once I hit the 6-month mark if I haven't heard anything. Based on what others have shared, they seem to be the only option for getting real visibility into these claims and potentially expediting cases that have been stuck too long. Thanks to everyone for sharing your timelines - it really helps to know this is a systemic processing issue rather than something specific to individual cases!

I'm experiencing the exact same frustrating situation! Filed my Form 843 in late January for FICA taxes that were incorrectly withheld from my remote work as a technical writer. My client's payroll system automatically classified me as a W-2 employee when I should have been treated as an independent contractor, resulting in about $1,600 in incorrect FICA withholding. It's now been nearly 5 months with absolutely zero communication from the IRS. Like everyone else here, I've been checking my online transcripts monthly hoping to see any indication of progress, but there's literally nothing there about Form 843 processing. I've also tried calling the IRS customer service line twice but gave up after waiting on hold for over 2 hours each time. What's most frustrating is the complete lack of transparency in this process compared to regular tax refunds. At least with standard refunds you get basic status updates, but Form 843 claims just vanish into a bureaucratic black hole once submitted. Reading through everyone's experiences here has been both reassuring and concerning - reassuring to know that 6-9 month wait times are unfortunately normal right now, but concerning that there's essentially no recourse during this entire period. I'm definitely planning to contact the Taxpayer Advocate Service once I hit the 6-month mark if I haven't received any updates by then. Based on what others have shared, they seem to be our best option for getting real visibility into these claims and potentially expediting cases that have been stuck in processing limbo too long. Thanks to everyone for sharing their timelines and experiences - it really helps to know this is a widespread systemic issue rather than something specific to my case!

I'm in a very similar situation - underreported by about 6% and owe around $450 in additional tax. After reading through all these responses, I'm leaning toward filing the amended return just to get it over with. One thing I'd add is that you should check if the income was reported on a 1099 or other tax document. If it was, the IRS will almost certainly catch it eventually through their automated matching system. If it wasn't reported to them by a third party, you have more time to decide, but I still think being proactive is the better approach. The peace of mind alone is worth it. I've been losing sleep over this for weeks, and I think I'll sleep better knowing I corrected it myself rather than waiting for a notice to show up in my mailbox.

Just wanted to add my perspective as someone who's been through this exact situation. I underreported by about 4% a couple years ago (around $300 in additional tax) and went back and forth on whether to file an amended return. What ultimately convinced me was realizing that the stress and mental energy I was spending worrying about it was worth way more than the small amount of interest I might save by waiting. I filed the 1040-X and it was honestly pretty straightforward - took me about an hour to complete. The key thing that helped me was understanding that this kind of honest mistake happens all the time, and the IRS system is designed to handle it. They're not looking to destroy people over small underreporting errors - they just want their tax revenue plus a reasonable interest charge. One practical tip: if you do decide to file the amendment, make sure to include a brief explanation of the error in the explanation section of Form 1040-X. Something like "Failed to include income from [source] on original return." It shows you're being transparent about the mistake and aren't trying to hide anything.

Great question! I went through this same dilemma last year. The IRS generally recommends keeping tax returns for 3 years from the filing date, but I'd suggest going with 6-7 years to be safe, especially if you have any business income, rental properties, or claimed significant deductions. For disposal, ALWAYS shred - never just recycle tax documents. They contain your SSN, address, income details, and everything an identity thief would need. I learned this lesson when my neighbor found someone going through recycling bins in our area specifically looking for financial documents. One tip that saved me tons of time: before shredding, I scanned everything into PDF files and stored them encrypted on a cloud drive. That way I have digital copies if I ever need them, but I freed up all that physical storage space. The peace of mind is worth the extra hour of scanning.

For the original question about shredding vs recycling - absolutely shred anything with personal information! Tax returns contain your SSN, full address, income details, and dependent information. Even if you tear them up before recycling, determined identity thieves can piece documents back together. Regarding retention periods, the standard 3-year rule applies to most situations, but I'd recommend keeping them for 6 years minimum. Here's why: if you underreport income by more than 25%, the IRS has 6 years to audit. Also, some state tax agencies have longer audit periods than the federal IRS. One thing I haven't seen mentioned yet - if you have any carryforward losses (like capital losses that exceeded the annual limit), keep those returns until you've used up all the carryforwards, which could be many years. Same goes for any NOL (Net Operating Loss) carryforwards if you have business income. For your specific situation with returns from 2014-2018, you're probably safe to dispose of 2014-2016, but I'd personally keep 2017-2018 for another year or two just to be conservative. And definitely invest in a good crosscut shredder - it's worth the $50 to protect your identity!

I've been following this thread and wanted to share my experience as someone who just went through this same situation last quarter. I got a $8,200 bonus and was similarly stressed about the withholding. After reading through all the advice here, I ended up using a hybrid approach: I accepted the standard 22% federal withholding on my bonus (plus FICA taxes), but then used the IRS withholding estimator to calculate how much extra to withhold from my remaining regular paychecks for the year. It turned out the estimator recommended adding just $38 per paycheck to my regular withholding to perfectly balance everything out. I used Step 4(c) on my W4 to add that amount, and when I did my taxes this year, I ended up with a small refund instead of owing money. The whole process was way less stressful than I expected, and I didn't have to worry about timing multiple W4 changes or trying to game the system. Sometimes the simplest approach really is the best - especially when you're dealing with your first significant bonus and just want to make sure you don't get surprised at tax time. For what it's worth, my total withholding on the bonus ended up being about 31% (federal + state + FICA), and I felt like that was pretty reasonable given my tax bracket. Good luck with your bonus - you've got this!

I just wanted to add a perspective as someone who works in payroll - there are a few technical details that might help you make your decision. First, many people don't realize that the W4 changes you make affect ALL future paychecks until you submit a new W4, not just the next one. So if you increase withholding before your bonus and forget to change it back afterward, you'll be over-withholding for the rest of the year. Second, some payroll systems have a lag time for processing W4 changes that's longer than just "one pay period." I've seen systems that take 2-3 pay periods to fully implement changes, especially if there are approval workflows involved. My advice would be to contact your payroll department ASAP to ask about: 1. Their specific processing timeline for W4 changes 2. Whether they use aggregate or supplemental withholding method for bonuses 3. If they allow employees to specify different withholding percentages just for bonus payments If they do allow custom bonus withholding percentages, that's honestly your easiest option. If not, the approach others mentioned of adjusting regular paycheck withholding for the remainder of the year is definitely the safest route. Just make sure you set a calendar reminder to review your withholding situation again before next year's bonus cycle!