I'd suggest also considering the 95-day rule with capital improvements in a 1031 exchange. If you're buying a replacement property, improvements made within 95 days after closing can be considered part of the exchange value. Might not apply to your situation since you're asking about the relinquished property, but worth noting for the complete picture.

Based on my experience with several 1031 exchanges, the consensus here is correct about splitting your $37,000 in expenses. The $26,000 in capital improvements (roof and HVAC) should increase your adjusted basis on Form 8824 line O since they were substantial improvements that add long-term value to the property. The $11,000 in repairs and maintenance should go on line N as exchange expenses since they were incurred after the property ceased being a rental but were necessary to prepare it for sale. One additional consideration: make sure you have detailed receipts and documentation for all these expenses. The IRS scrutinizes 1031 exchanges more closely, and clear documentation of what constitutes capital improvements versus repairs will be crucial if you're ever audited. Also, since you mentioned the property stopped being a rental 2 months ago, confirm with your tax preparer how this timing affects any final depreciation calculations on the property before the exchange.

Don't overthink the W-4! It's just telling your employer how much to withhold, not how you'll actually file. My advice: if both you and your wife work, check the "Married but withhold at higher single rate" box on your W-4s. This prevents underwithholding. For actual tax filing, almost certainly file as "Married Filing Jointly" - it's usually better. For dependents: zero for both of you unless you have children or other qualifying dependents. Being on someone's health insurance doesn't make you their dependent.

As a fellow newcomer to the US tax system, I completely understand your confusion! I went through something similar when I first arrived. One thing that really helped me was understanding that the W-4 is just an estimate for withholding - you're not locked into anything. Since you're both working and newly married, I'd recommend: 1. Both select "Married filing jointly" on your W-4s 2. Make sure to check the "Multiple Jobs or Spouse Works" box in Step 2 on both forms 3. Consider using the IRS withholding calculator at irs.gov to get a more precise estimate For dependents, put 0 unless you have children or other qualifying dependents. Health insurance coverage doesn't make you dependents of each other. The good news is that when you file your actual tax return next year, you can choose the filing status that works best for you (likely married filing jointly), regardless of what you put on your W-4s. The W-4 is just to help get your withholding close to what you'll owe. Don't stress too much - you can always adjust your W-4 later if needed once you see how your first few paychecks look!

There's significant misinformation regarding PATH Act parameters. The legislation specifically targets EITC and ACTC claims, not dependent claims generally. According to Internal Revenue Code Section 6402(m), the IRS cannot issue refunds for returns claiming these credits before February 15th annually. Many preparers incorrectly generalize this to all dependent claims, creating unnecessary anxiety. Your preparer's information is technically inaccurate. Non-EITC/ACTC returns with dependents aren't subject to the mandatory holding period, though they may experience delays for other verification reasons.

Thanks for bringing this up! I went through the same confusion last year. The key distinction is that PATH Act delays only apply to returns claiming EITC or Additional Child Tax Credit (ACTC) - not just any return with dependents. Your 4 colleagues who got their refunds quickly likely claimed the regular Child Tax Credit (non-refundable portion) or just used their dependents for filing status/exemptions, while the 2 still waiting probably claimed EITC or ACTC. I learned this the hard way when I was panicking about my own return delay. The IRS website has a PATH Act FAQ section that explains this, but it's buried pretty deep in their site. Pro tip: check your Form 1040 lines 27a (EITC) and 28 (ACTC) - if these have amounts, you're subject to PATH delays.

Watch out for state taxes too! Federal might not tax certain scholarships but some states have different rules. My roommate did exactly what ur talking about with the Roth conversion thing, saved a bunch on federal but got hit with unexpected state taxes cause our state counts more scholarship money as taxable than the IRS does.

Great advice from everyone here! One thing I'd add - make sure your friend gets any scholarship/fellowship documentation in writing from their university's financial aid office. I learned this the hard way when the IRS questioned how I reported my graduate stipend. Universities sometimes aren't super clear about what portions are taxable vs non-taxable, and having official documentation that breaks down tuition remission vs living expenses vs research stipends can be a lifesaver if you ever get audited. Also, if they're doing the Roth conversion, consider spreading it over multiple years if the amount is large. Even if they're under the standard deduction this year, converting a big chunk could bump them into higher tax brackets or affect other benefits like health insurance subsidies that others mentioned. The timing matters too - if they expect to have higher income next year (like transitioning from student to full-time work), this year might be the perfect opportunity for the conversion while they're in the 0% tax bracket.

Does anyone know if FreeTaxUSA has a way to import W-2s directly? I'm doing my taxes for the first time too and I really don't want to type everything in manually...especially all these weird codes in different boxes. My W-2 has like 6 different things in Box 14 alone!

Hey there! Don't stress too much about Box 14 - it's one of those things that seems scary but is usually pretty straightforward for most people. For your specific items: - "UNION DUES" - These are the union membership fees deducted from your paycheck. Generally not deductible on federal taxes unless you itemize (which you probably won't as a first-time filer). - "VOL LIFE" - This is voluntary life insurance premiums you're paying through payroll deduction. Also not deductible. Since you're using FreeTaxUSA and likely taking the standard deduction, you can safely ignore both of these items for your federal return. The software will ask you about itemizing vs. standard deduction, and it'll automatically choose whichever saves you more money (almost always standard deduction for someone in your situation). The main thing to remember is that Box 14 is mostly informational - it shows what was deducted from your pay, but doesn't usually affect your tax calculation. You're doing great by being careful and asking questions! That's exactly the right approach for your first time filing.