This situation is so confusing to me. My understanding was you can't claim kids that aren't yours? But then others are saying you can claim neices and nephews? what are the actual rules?? I'm getting ready to file for 2024 and my sister's kids live with me so i need to know.

This is a really tough situation your cousin is in, but there might be more hope than his tax preparer is suggesting. I went through a similar audit two years ago and learned a lot about how the IRS evaluates these cases. First, regarding the HOH status - the fact that his ex-wife is using the same address is definitely what triggered this audit, but if they're truly living in separate households (even at the same address), he might still qualify. The IRS looks at whether you're maintaining separate living spaces and financial responsibilities. If they're sharing the same physical unit, then unfortunately only one can claim HOH. For the dependents, he's right to focus on proving his son lived with him - that's his strongest case. The niece and nephew situation is much trickier. Even with Form 8332 from his brother, he still needs to prove they lived with him for more than half the year AND that he provided more than half their support. If the kids were just visiting frequently but not actually residing with him, those claims might not hold up. The financial impact of losing HOH and two dependents could be significant - potentially several thousand dollars. But if he can keep HOH status with just his son as a qualifying person, that would minimize the damage considerably. I'd suggest getting a second opinion from a CPA or enrolled agent who specializes in audit representation, not just a tax prep service.

Just wanted to add something important - don't forget about the Qualified Business Income deduction (Section 199A). Since you're self-employed with DoorDash, you can potentially deduct up to 20% of your net profit! Most of the free tax software should calculate this for you, but sometimes they miss it. On a $1050 income with expenses, it might not amount to much, but it's still free money!

Hey Yuki! I went through the exact same situation last year with my first DoorDash 1099-NEC. Here's what worked for me: I ended up using Cash App Taxes (completely free) and it handled everything perfectly. The interface is really user-friendly for beginners and walks you through each step. It automatically calculated my self-employment tax and even caught deductions I hadn't thought of. One thing I wish I had known earlier - start tracking EVERYTHING now for 2025! Not just mileage, but also: - Phone bill percentage (since you use it for the app) - Car maintenance and repairs - Any delivery bags or equipment - Even hand sanitizer if you bought it for work Also, don't stress too much about the self-employment tax calculation - the software does it all for you. With your income level, you're looking at about 15.3% SE tax on your net profit (after expenses), but then you get to deduct half of that SE tax, which reduces your overall tax burden. The whole process took me maybe 2 hours once I had all my documents ready. You've got this!

Thank you all for the detailed explanations! This has been incredibly helpful. I filed on March 7th with head of household and dependent care credits, so it sounds like I'm right in line with the typical timeline everyone has described. It's reassuring to know that "accepted" really is just the first step and that 2-3 weeks in that status is completely normal, especially with credits that need verification. Based on what Giovanni shared about their March 3rd filing getting approved after 19 days, I'm probably looking at another week or so before seeing any movement. I'll stop obsessively checking the Where's My Refund tool multiple times a day and switch to once every few days like Zainab suggested. This community has been so much more helpful than any of the official IRS resources for understanding what these status updates actually mean!

I went through this same confusion last year! "Accepted" definitely just means the IRS received your return and it passed their basic automated checks - like your SSN matches their records, the math is correct, and there are no obvious formatting errors. It's basically confirmation that your return made it into their system successfully. The actual review of your deductions, credits, and eligibility happens during the "processing" stage, which comes after accepted. Since you filed as head of household with dependent care credits, those will need to be verified during processing, which typically adds a few extra days to the timeline. I filed with similar credits last year and went from "accepted" to "approved with DDD" after about 21 days total. The IRS tends to batch process returns with certain credits together, so don't worry if it seems to sit in "accepted" status for a while - that's completely normal!

Has anyone used TurboTax Self-Employed for their LLC? I'm wondering how picky it is about the comma in the business name field and if it matches that format to all the forms it generates.

I went through this exact same confusion when I first started my LLC! After dealing with multiple tax forms and even getting a notice from the IRS about a name mismatch (turned out to be unrelated), here's what I learned: The key is to use your business name exactly as it appears on your EIN confirmation letter from the IRS. This is the "official" version they have in their system. If your state registration has the comma but your EIN letter doesn't (or vice versa), go with the EIN letter format for all federal tax documents. I keep a copy of my EIN letter handy whenever I'm filling out tax forms so I can reference the exact spelling and punctuation. It's saved me from second-guessing myself every tax season. The IRS matching systems are looking for consistency with what's in their database, not necessarily what your state has on file. For what it's worth, I've never heard of anyone getting into trouble specifically over comma placement - it's usually bigger discrepancies like completely different business names or missing the LLC designation entirely.

This has been such a helpful discussion! I'm a new landlord (just bought my first rental property 6 months ago) and I've been putting off dealing with my refinancing costs because I was so confused about the tax treatment. Reading through everyone's experiences, especially the breakdown about Section B vs Section C on the closing disclosure, finally makes this manageable. I refinanced right after purchasing to get a better rate, so I have about $4,200 in closing costs that I now know how to properly categorize. One thing I'm curious about - for those of you who have been doing this longer, do you use specific software or spreadsheets to track all these amortization schedules? With a 30-year loan, keeping track of the monthly amortization amounts over decades seems like it could get unwieldy, especially if you refinance multiple times like some of you have mentioned. Also, when you're doing your annual tax prep, do most tax preparers understand these nuances about rental property refinancing costs, or do you find you need to educate them? I want to make sure whoever I work with next tax season knows what they're doing with investment property taxes.

This thread has been incredibly educational! I'm dealing with a similar situation - just refinanced my rental duplex and have been stressing about how to handle the $5,400 in closing costs. The Section B vs Section C breakdown on the closing disclosure is genius - I never would have thought to categorize it that way. Just went back and looked at mine: most of my costs ($4,100) are in Section B (loan origination, processing fees, etc.) so those need to be amortized over 30 years. But I do have about $1,300 in Section C costs (title insurance, recording fees) that can potentially be added to my cost basis. One follow-up question: if you pay discount points to buy down your interest rate during a refinance, do those always have to be amortized? Or are there any circumstances where points can be deducted immediately for rental properties? I paid $2,000 in points and I'm hoping there might be some way to accelerate that deduction since it was specifically to reduce my ongoing financing costs. Thanks everyone for sharing your experiences - this is exactly the kind of practical guidance you can't easily find elsewhere!