Great thread everyone! As someone who works in tax preparation, I wanted to add a few practical tips that might help: 1. **Casino host relationships** - If you're a regular player, your casino host can often provide additional documentation of your play history beyond what the player's club automatically tracks. They sometimes have access to more detailed records. 2. **State tax implications** - Don't forget that some states have different rules for gambling income and losses. Make sure you're considering both federal and state requirements when documenting everything. 3. **Professional gamblers vs recreational** - The IRS treats these very differently. If gambling is your primary income source, you may qualify as a professional gambler with different deduction rules (can deduct losses as business expenses rather than itemized deductions). But this comes with much stricter documentation requirements. 4. **Timing of documentation** - If you're scrambling to put together records for this year, start a simple system NOW for next year. Even a basic smartphone app or Excel spreadsheet updated after each session will save you major headaches. The most important thing is consistency and reasonableness. The IRS knows people gamble and lose money - they just want to see that you made a good faith effort to track it accurately.

As a tax professional who's helped numerous clients with gambling documentation issues, I want to emphasize something that's been touched on but deserves more attention: **contemporaneous record-keeping is king**, but reconstructed records can still be acceptable if done thoughtfully. The IRS Publication 529 specifically addresses gambling records, and while they strongly prefer a gambling diary maintained at the time of play, they understand that's not always realistic. What matters most is that your reconstructed records are: 1. **Reasonable and consistent** with your financial capacity 2. **Corroborated by available evidence** (bank statements, credit card records, casino receipts) 3. **Conservative in estimates** rather than aggressive A few additional tips from my experience: - **Organize everything chronologically** - it makes review much easier for both you and any IRS examiner - **Consider your player's card tier status** - if you had a higher tier, it suggests more frequent play that should align with your claimed losses - **Document your methodology** - write a brief explanation of how you reconstructed your records so you can explain it consistently if questioned Remember, the goal isn't perfection - it's demonstrating good faith effort to comply with tax laws. The IRS deals with gambling tax issues regularly and they're generally reasonable if you can show you've made a genuine attempt to document your activities accurately. One last point: even if you can't deduct all your losses due to the standard deduction being higher, you still MUST report all gambling winnings. The W-2G ensures the IRS knows about your winnings regardless of what deductions you claim.

Don't forget that if your net profit from CashApp business income is $400 or more, you also have to pay self-employment tax (15.3%) on top of regular income tax! This shocked me last year and I wasn't prepared for the extra tax bill.

Just to add to all the great advice here - make sure you understand the difference between personal transfers and business income on CashApp! The IRS only cares about payments you received for goods or services, not when friends pay you back for dinner or split bills. If some of that $6,800 includes personal transfers (like roommates paying rent, friends paying you back, family sending money), you don't need to report those as income. Only the actual business payments count. CashApp's 1099-K might include everything over $600, but you're only taxed on the business portion. Keep good records showing which payments were personal vs business - screenshots of the transaction descriptions can be helpful if you ever get audited. This distinction could save you hundreds in taxes!

Has anyone here actually gone through with a large Roth conversion in a low income year? I'm considering doing about $35k conversion but I'm worried I'll regret it when tax time comes.

This is exactly the kind of situation where proper tax planning can save you thousands! With your $41k income and massive capital losses, you're actually in a unique position. While those losses can't directly offset Roth conversion income (as others mentioned), your low current income means you're in a great tax bracket for conversions. I'd strongly recommend running the numbers on converting enough to fill up your 12% tax bracket - probably around $8k based on your current income. Even though you'll pay taxes on the conversion, you're essentially "prepaying" taxes at today's lower rates rather than potentially higher rates in retirement. The key insight here is that your capital losses will carry forward for years, giving you ongoing $3k annual deductions against ordinary income. This means your effective tax rate might be even lower than the bracket suggests. Don't let the losses go to waste - use this low-income year strategically for tax-advantaged growth!

Just a heads up - make sure you're tracking the "unadjusted basis" correctly. This should be the original cost of the building portion only (not including land) before any depreciation. For an inherited property, it would typically be the fair market value of the building (not including land) at the time of inheritance. So if your property is worth $320k total but $50k of that is land value, your building basis would be $270k, making the 2% threshold $5,400. That would be lower than the $10k cap, so $5,400 would be your safe harbor limit.

This is such a helpful thread! I'm dealing with a similar situation with my rental property. One thing I want to add is that documentation becomes really important when you're near or over the safe harbor limits. I learned this the hard way during an audit a few years ago - the IRS agent wanted detailed records showing exactly what work was done and why it was necessary. For repairs like your HVAC replacement, having documentation that the old system was broken/non-functional (like repair estimates or photos) really helps support the "repair" classification versus "improvement." Also, timing can matter. If you're close to your safe harbor limit and have discretionary maintenance work planned, you might consider spreading it across tax years to stay under the threshold when possible. Obviously you can't delay emergency repairs like your mold situation, but things like painting or minor updates could potentially be timed strategically. The inherited property basis calculation mentioned above is spot on - make sure you're using the stepped-up basis correctly and allocating between land and building properly. A good appraisal from the time of inheritance can be invaluable for this.

Just a tip from my experience - if you file as "Married Filing Separately" without getting an ITIN for your spouse this year, but later decide you want to amend to "Married Filing Jointly" after getting their ITIN, you CAN do this! You have 3 years from the original filing deadline to file an amended return.

I was in almost the exact same situation two years ago - J1 visa with a J2 spouse who had no SSN or ITIN and zero income. Here's what I learned: The key decision is whether the potential tax savings from filing jointly justify the hassle of getting an ITIN for your spouse. Since you mentioned having just one W2, if your income is relatively modest, the difference between the MFS standard deduction ($13,850) and MFJ standard deduction ($27,700) could save you significant money. However, getting an ITIN can take 6-11 weeks during tax season, and you'd need to mail your original passport or certified copies along with Form W-7. If you're not comfortable mailing your passport, you can visit an IRS Taxpayer Assistance Center, but appointments are hard to get. For your first year, I'd honestly recommend starting with MFS to get your return filed on time, then consider getting the ITIN for next year when you have more time to plan. You can always amend later if the tax savings are worth it, but at least you won't miss any deadlines while waiting for ITIN processing. Also, make sure you're claiming any applicable tax treaty benefits - many J1 visa holders from certain countries can exempt part of their income for the first few years.