Does anyone know if Schedule E passive losses are subject to the SALT cap limitation of $10,000? My tax guy says no because they're "below the line" deductions not itemized deductions, but I'm not 100% convinced.

Great question about Schedule E passive losses! I went through something similar last year with my rental property. One thing I'd suggest is double-checking that your preparer properly classified all your expenses. That $14,500 loss you mentioned - make sure the roof repair was correctly categorized. If it's truly a repair (fixing existing damage), it's fully deductible in the current year. But if it's considered an improvement (like upgrading to a better roof system), it might need to be capitalized and depreciated over time, which would reduce your current year loss. Also, since you're handling the property management yourself, make sure you're documenting your active participation hours. The IRS can be picky about this during audits. Keep records of time spent on tenant communications, property inspections, repair coordination, etc. With your AGI around $95,000, you should definitely qualify for the full $25,000 special allowance, so those losses should flow directly to your 1040 and offset your ordinary income. Just verify that your preparer didn't accidentally trigger any Form 8582 (Passive Activity Loss Limitations) requirements.

This entire discussion has been absolutely fascinating and honestly pretty scary as someone who buys scratch tickets regularly! I had no idea the tax situation was this brutal. What really gets me is how the lottery system seems almost designed to mislead people. Like, they advertise "$2 MILLION WINNER!" in huge letters on the ticket, but nowhere does it mention that you might actually only get $700k after taxes and the lump sum reduction. That feels pretty deceptive to me. I'm definitely going to be more strategic about this going forward. The advice about keeping detailed records throughout the year and using tools like taxr.ai to calculate the real impact makes so much sense. And @Maya Jackson's rule about assuming you'll only keep 60% of any big win is something I'm going to remember. One question I have - for those smaller wins like $1,000-$5,000, is it worth getting professional tax help, or are the online calculators sufficient at those levels? I'm trying to figure out where the threshold is for when you really need to bring in an accountant vs. handling it yourself. Thanks everyone for sharing your real experiences - this is the kind of practical information that should honestly be required reading before you can buy a lottery ticket!

This thread has been incredibly enlightening! As someone who occasionally plays the lottery, I never fully grasped how devastating the tax implications could be until reading through everyone's real experiences here. What really strikes me is how the system seems set up to create false expectations. When you see "$2 MILLION JACKPOT" plastered everywhere, your brain naturally thinks "wow, $2 million!" - not "well, maybe $700k after taxes and lump sum reduction." The psychological impact of that marketing versus reality must be crushing for actual winners. The practical advice shared here is invaluable though. @Maya Jackson's 60% rule, keeping detailed gambling records throughout the year, and using tools like taxr.ai for accurate calculations - these are the kinds of tips that should honestly be mandatory education for anyone buying lottery tickets. I'm also amazed by how many people shared stories about struggling to reach the IRS for guidance, and how services like claimyr.com can actually get you through to a real person. The fact that winners are largely left to figure out complex tax implications on their own seems like a major gap in the system. Thanks to everyone for sharing their experiences so openly. This discussion should be required reading for anyone who plays regularly!

I faced this exact same issue when I was temporarily in the UK for work. The 844 number is indeed geoblocked, which is incredibly frustrating for US taxpayers abroad. Here's what I found worked: I used WhatsApp calling with a US-based VPN connection. The combination of the VPN (I used ExpressVPN) plus WhatsApp's calling feature bypassed the geographic restrictions. Make sure to connect to a US server first, then place the call through WhatsApp. Another option that worked for a colleague was using a callback service like CallHippo, which provides a US number that forwards to your international line. You call their US number, it connects you to the IRS line, and any callbacks go to your actual phone. One important tip: when you do get through, explain your situation to the IRS rep. Many are understanding about international callers and some can note in your file that future contacts should accommodate your international status. Also ask if your specific issue can be handled via mail or fax instead - sometimes an in-person appointment isn't actually required despite what their initial automated system suggests. The whole system needs an overhaul for expat taxpayers, but these workarounds have helped me and others navigate it successfully.

I'm currently dealing with this exact same situation from Montreal! After reading through all these suggestions, I ended up trying the Google Voice method that several people mentioned. Here's my experience: I set up Google Voice about 2 weeks ago using a VPN connected to a US server, and it worked perfectly for calling the IRS appointment line. The call quality was crystal clear and I was able to schedule my appointment for next month when I'll be back in the States. A few important details for anyone trying this approach: - Make sure to verify your Google Voice number while you're still connected to the US VPN - I had to add $10 in calling credit even though it's supposed to be free for US calls - The IRS rep was completely unaware I was calling from Canada - the system showed a regular US number One thing I'd add that I haven't seen mentioned yet: if you're planning to return to the US within the next 60 days, you can also try explaining your situation to the IRS International line (+1-267-941-1000) and ask if they can schedule the appointment on your behalf. They can't do it directly, but some reps have been helpful in facilitating a warm transfer to the domestic appointment line. The whole system is definitely broken for expats, but at least there are workarounds that actually work!

I went through this exact situation with my consulting LLC last year. The short answer is no - multi-member LLCs cannot be treated as disregarded entities under any circumstances. The IRS is very clear that disregarded entity status is only available for single-member LLCs. Your default classification is partnership taxation (Form 1065), but you're absolutely right to explore other options. At your income level, an S-Corp election could save you significant money on self-employment taxes. Here's what I learned: 1. With partnership taxation, both members pay self-employment tax on their entire share of profits 2. With S-Corp election, you only pay employment taxes on reasonable salaries, not on distributions For a $125k business, if you each took $40k salaries and split the remaining $45k as distributions, you'd save about $3,400 in SE taxes annually (15.3% × $45k). The tradeoff is quarterly payroll filings and more complex bookkeeping. I'd strongly recommend running the numbers with a CPA before deciding. The breakeven point where S-Corp election makes sense is usually around $60-80k in profits, so you're definitely in the range where it could be beneficial.

Based on everyone's helpful responses here, I wanted to share what we ended up deciding for our multi-member LLC situation. After running the numbers and consulting with our CPA, we're moving forward with the S-Corp election since we're projected to hit $125k this year. The key factors that convinced us were: 1) The potential SE tax savings of around $3,500-4,000 annually at our income level, 2) The fact that we can keep our LLC structure and just change the tax classification, and 3) Our CPA confirmed that reasonable salaries for marketing professionals in our area would be around $45k each, leaving $35k in distributions that wouldn't be subject to SE taxes. We're planning to use QuickBooks Payroll to handle the compliance side since it's much cheaper than hiring a payroll service at our size. Thanks to everyone who shared their experiences - it really helped us make an informed decision! Will report back in a year with how it actually worked out in practice.

I went through something very similar last year and can totally understand the panic you're feeling right now! The good news is that what you're describing has several classic signs of a scam. Here's what really stands out to me: legitimate tax collection follows a very predictable pattern. You would have received multiple notices directly from the IRS or your state tax agency BEFORE any third-party collection agency ever gets involved. The fact that you've always filed on time, gotten refunds, and never received a single prior notice makes this extremely suspicious. A few immediate things to check: - Look up "Revenue Recovery Solutions" on the IRS website's list of authorized private collection agencies - I suspect you won't find them there - Check if the letter has proper debt validation disclosures required by federal law - See if they're demanding immediate payment without offering dispute rights Don't let that 15-day deadline pressure you into doing anything hasty. Real tax agencies give you much more time and multiple opportunities to respond. Take a deep breath, and start by calling your state tax department directly using the number from their official website (NOT any number from that letter) to verify if you actually owe anything. You're being smart by asking questions before taking action. Most people who fall for these scams act quickly out of fear, which is exactly what the scammers are counting on!

I just want to add one more important point that I haven't seen mentioned yet - if this does turn out to be a legitimate debt (which seems very unlikely given your situation), you have specific rights under the Fair Debt Collection Practices Act (FDCPA). Any legitimate collection agency MUST provide you with a written validation notice within 5 days of first contacting you. This notice must include: - The amount of the debt - The name of the original creditor (in this case, which tax agency) - A statement of your right to dispute the debt within 30 days - Information about what happens if you dispute The fact that you're being given only 15 days to respond and threatened with "enforcement actions" without proper validation disclosures is another huge red flag. Even if this were real, those tactics would be illegal under federal debt collection laws. Also, legitimate tax agencies typically offer payment plans and settlement options - they don't just demand full payment immediately. The aggressive, threatening tone you described is classic scammer behavior designed to bypass your logical thinking and make you act out of fear. You're absolutely doing the right thing by verifying everything first. Trust your instincts - this has scam written all over it!