5 My dad started taking social security at 67 while still working part time as a consultant. His big mistake was not realizing how it would affect his tax bracket! He ended up in a higher bracket and actually netted less overall than if he'd waited till 70 when he fully retired. Sometimes the extra SS income can actually hurt you financially if you're not careful.

One thing I'd add to this great discussion - don't forget to consider the "do-over" rule if you change your mind. If you start collecting Social Security and later decide it wasn't the right choice, you have 12 months from your first benefit payment to withdraw your application and pay back everything you received (without interest). This essentially gives you a one-time reset. Also, if you're married, coordinate your claiming strategy with your spouse! The timing of when each spouse claims can significantly impact survivor benefits. Sometimes it makes sense for the higher earner to delay while the lower earner claims early, or vice versa. Given that you're an accountant, you probably already know this, but make sure you're factoring in the time value of money when comparing scenarios. A dollar today is worth more than a dollar in three years, so even though delaying increases your monthly benefit, the total lifetime value calculation can be tricky depending on your investment returns and life expectancy assumptions.

I went through this exact same confusion last year! The 898 code really threw me for a loop too. What everyone else has explained is spot on - that $0.00 amount next to "Refund applied to non-IRS debt" is actually great news. It means the IRS automatically checked if your partner owed any money that could be taken from his refund (like unpaid child support, defaulted student loans, back taxes to states, etc.) through their Treasury Offset Program, but they found nothing to collect. So he definitely got his full $1,055 refund! The math works out perfectly: $1,819 withholding minus $764 tax liability equals $1,055. That February 26th date next to code 846 shows when the money was actually sent to his bank account. Those weird future dates like March 2026 are just the IRS using their ancient computer system's processing cycles - they don't mean anything actually happened in the future. I remember staring at similar dates on my transcript thinking I was looking at some kind of time-travel tax return! 😅 Your partner's transcript looks completely normal and healthy. No red flags at all!

I just wanted to thank everyone who responded to my question! This thread has been incredibly helpful and educational. When I first saw that 898 code on my partner's transcript, I was so worried something was wrong or that money was being taken from his refund for some unknown debt. But thanks to all your explanations, I now understand that: - The 898 code with $0.00 is actually GOOD news - it shows the IRS checked for any debts through the Treasury Offset Program and found none - He got his full $1,055 refund ($1,819 withholding - $764 tax liability = $1,055) - Those weird March 2026 dates are just internal IRS processing cycles, not actual calendar dates - The February 26th date next to code 846 is when the refund was actually sent I had no idea the IRS automatically checks every refund for potential debt offsets - that's actually pretty smart of them, even if their transcript format is confusing as heck! You all have made me feel so much more confident about understanding these documents in the future. The IRS should definitely hire some of you to make their explanations more user-friendly! 😊 Thanks again everyone - this community is amazing! 🙏

One thing I haven't seen emphasized enough is the substantial tax savings from the Earned Income Credit (EIC) that you might qualify for with your income level and child. At $87K with a qualifying child, you're right at the phase-out range, but you could still receive a meaningful credit - potentially several hundred dollars. The EIC is one of the most valuable tax credits available and is only accessible when filing jointly in your situation. This credit alone often makes the difference between owing taxes and getting a refund for families in similar circumstances. Also, since your wife was a teacher until last summer, don't overlook the $300 educator expense deduction she can claim for any classroom supplies or professional development she paid for during those months she was teaching in 2023. Many couples forget about this when one spouse only worked part of the year. The combination of higher standard deduction, favorable tax brackets, Child Tax Credit, potential EIC, and educator expenses makes joint filing a clear winner financially. You'd actually be leaving money on the table by considering any other filing status.

I'm a tax preparer and see this exact situation all the time during filing season. Everyone here is absolutely right - you cannot claim your spouse as a dependent regardless of income, and married filing jointly is definitely your best option. At your $87K income level, here's what you'll benefit from with joint filing: - $27,700 standard deduction (vs $13,850 if single) - More favorable tax brackets that essentially double the income thresholds - Full $2,000 Child Tax Credit with no phase-out concerns - Potential Earned Income Credit (you're right at the edge but could still qualify for a partial credit) - Access to education credits if either of you takes courses Since your wife taught until summer 2023, don't forget she can still claim up to $300 in educator expenses for classroom supplies she purchased during those working months. Also, if you use any childcare (even occasional babysitting), keep those receipts for the Child and Dependent Care Credit. The math really isn't close - joint filing will save you significantly compared to any other option available to you. You're making the right choice by asking these questions!

This is a really complex situation that I've been dealing with myself. One thing I'd add to the excellent advice already given is to be extra careful about the timing of when you used the loan proceeds. The IRS follows a "tracing" rule where they look at what you actually spent the money on, not just your intentions. If you deposited the margin loan into your checking account and then made various purchases over time, you'll need to establish which specific expenditures came from the loan proceeds versus your other income. The IRS generally uses a "first in, first out" approach unless you can demonstrate otherwise. Also, for the investment portion, remember that investment interest deductions are limited to your net investment income for the year. If you don't have enough investment income to absorb all the investment interest, you can carry forward the unused portion to future years. I'd strongly recommend consulting with a tax professional who has experience with investment interest allocations. The penalties for getting this wrong can be significant, and the rules are more nuanced than they initially appear.

One thing that hasn't been mentioned yet is the AMT (Alternative Minimum Tax) implications. Investment interest deductions that are allowed for regular tax purposes might be treated differently under AMT calculations. If you're subject to AMT, some of your investment interest deductions could be disallowed or limited further. Also, make sure you're not double-counting any expenses. For example, if you paid property taxes with the loan proceeds, you can't deduct both the property tax payment AND claim the loan interest as deductible - the interest portion used for property taxes would be non-deductible personal interest. Another consideration is state tax implications. Some states don't conform to federal rules for investment interest or home equity interest deductions, so you might need to make adjustments on your state return even if everything is properly handled federally. The allocation method you choose needs to be reasonable and consistently applied. Whatever approach you use for dividing the interest expense, document your methodology thoroughly in case you need to defend it later. The IRS appreciates clear, logical allocation methods backed by solid documentation.

As someone who's been through this exact same confusion with partnership rental properties, I completely feel your pain! The good news is that you're asking the right questions and your understanding is actually pretty solid. To directly answer your depreciation question: Yes, the depreciation for the rental property itself should absolutely go on Form 8825, not directly on Form 1065. Your previous accountant may have made an error there, but as others have mentioned, if the depreciation still flowed through to the K-1s correctly, it's probably not worth amending unless there were other issues. One thing I learned the hard way is to keep meticulous records separating your "property management business" expenses (which go on 1065) from your "rental property" expenses (which go on 8825). Things like: - 1065: Office supplies, computers, software for managing properties, vehicle expenses for property management activities - 8825: Property taxes, insurance, repairs/maintenance, utilities, and yes - property depreciation The key insight that helped me was thinking of Form 8825 as essentially a "rental property Schedule E" that attaches to your partnership return. All the same types of expenses you'd put on Schedule E for personal rental property go on 8825 for partnership-owned rental property. Also, make sure you're calculating your depreciation correctly - if you converted a personal residence to rental property, you need to use the lesser of your original cost basis or fair market value at the time of conversion. That's another common mistake I see with partnership rental properties. Good luck with your filing!

This thread has been incredibly helpful! I'm dealing with a very similar situation with my multi-member LLC that owns rental properties. One additional consideration I'd like to add: if your partnership is making the Section 754 election, it can significantly impact how depreciation is calculated and reported on Form 8825, especially when partners change their ownership percentages or when new partners are admitted. The Section 754 election allows the partnership to adjust the basis of partnership property when there are transfers of partnership interests or distributions. This can affect the depreciation amounts that flow through to individual partners on their K-1s. If you're not familiar with this election, it's worth discussing with your tax professional, especially if you anticipate any changes in partnership structure. Also, regarding the multi-state issues mentioned earlier - I found that the Federation of Tax Administrators website has a good state-by-state breakdown of partnership filing requirements. Each state's Department of Revenue website also typically has specific guidance for multi-state partnerships. For those considering the AI tax services or IRS callback services mentioned above, I'd also recommend checking if your state has similar callback services. Some states have implemented their own versions for state tax questions, which can be just as valuable as getting federal guidance. Thanks everyone for sharing your experiences - this is exactly the kind of practical guidance that's hard to find elsewhere!