I think most people misunderstand REPS. The key issue is "material participation" in rental activities. Being a realtor counts for the 750 hours but NOT for material participation in your rentals. The exception is if you make a grouping election as others mentioned. Your CPA should know this but many don't understand real estate tax rules well. Just FYI - I got audited on this exact issue in 2023. The IRS was looking specifically at REPS claims. Make sure you have a detailed time log showing hours for EACH activity. After-the-fact estimates won't cut it in an audit.

Based on my experience dealing with REPS qualifications, your tax preparer may be being overly conservative. As a full-time realtor, you likely already meet the first two REPS requirements (750+ hours and 50%+ of working time in real estate). The critical piece is making the grouping election to treat all your rental activities as one activity. This election is made by attaching a statement to your tax return - there's no specific IRS form for it. The statement should clearly indicate you're electing to group all rental real estate activities under IRC Section 469(c)(7)(A). With this election, you can combine your time spent on the 3 self-managed properties with time spent overseeing the other 15 properties (reviewing reports, making decisions, communicating with property managers, etc.) to meet the material participation test. I'd recommend getting a second opinion from a CPA who specializes in real estate taxation. Many general tax preparers aren't familiar with the nuances of REPS, especially the grouping election strategy. The potential tax savings make it worth exploring further. Also, start keeping detailed time logs NOW for 2025 - document every hour spent on rental activities, no matter how small. This contemporaneous documentation is crucial if you're ever audited.

Just to add to all this great advice - I made the mistake of assuming Cash App would handle everything my first year too. Got a nasty letter from the IRS about missing 1099s! One thing that really helped me was setting up a separate business account on Cash App just for contractor payments. This makes it SO much easier to track business vs personal transactions when tax time comes around. You can still use your personal account for regular stuff, but having that separation saved me hours of sorting through transactions. Also, pro tip: start a simple spreadsheet right now with columns for date, contractor name, amount, and description of work. Update it every time you make a payment. Takes 30 seconds but will make preparing those 1099s in January a breeze instead of trying to reconstruct everything from your transaction history. Trust me on this one!

Great question! I went through this exact same confusion last year. The bottom line is YES, you absolutely need to issue a 1099-NEC to your subcontractor regardless of using Cash App. The payment method doesn't change your obligation as the business owner. Here's what I learned: Cash App may or may not issue a 1099-K to your contractor depending on whether they meet the threshold requirements, but that's completely separate from your responsibility. The 1099-K reports payment transactions, while your 1099-NEC reports the business relationship and compensation for services. At $27k, you're way over the $600 threshold that requires a 1099-NEC, so there's no question you need to file one. Don't worry about "double taxation" - your contractor will only report the income once on their tax return, they'll just have multiple forms documenting the same payments. My advice: get that W-9 from your contractor ASAP if you don't have it already, and start organizing your payment records now. January will be here before you know it and you'll need all the documentation ready to file by January 31st. Better to be prepared now than scrambling later!

Something no one mentioned yet - make sure you and your spouse don't accidentally exceed the family limit COMBINED during the transition months. When my husband and I went through this, our benefits department counted wrong and we over-contributed by accident. Had to withdraw the excess contribution before filing taxes which was a hassle because we'd already spent some of the HSA funds on medical expenses. Just double check all your calculations!

This is such a timely question! I just went through something similar when my partner switched jobs mid-year. One thing that really helped me was keeping detailed records of exactly when each coverage period started and ended - down to the specific dates, not just months. The IRS can be pretty strict about the timing, especially if there are any gaps in coverage or overlapping periods. I'd recommend documenting everything: when your wife's current coverage under your plan ends, when her new employer's coverage begins, and whether there's any continuation coverage (like COBRA) in between. Also, don't forget about the catch-up contributions if either of you is 55 or older! Those rules can get even more complex with mid-year changes. The additional $1,000 catch-up contribution follows the same monthly calculation rules, so you'd need to factor that in too. One last tip - consider setting up automatic contributions to match your calculated monthly limits rather than trying to make one large contribution at year-end. It helps avoid accidentally over-contributing and makes the whole process much more manageable.

I'm going through the exact same nightmare! Filed 1/22 and still showing absolutely nothing on transcripts, WMR, or SBTPG. After reading through all these helpful suggestions, I'm planning to try multiple approaches tomorrow morning. First, I'll call the Taxpayer Advocate Service at 877-777-4778 around 7:45 AM based on Miguel's success story - the fact that they actually assigned a case advocate who followed up is exactly what I need right now. If that doesn't work out, I'll try the 866-682-7451 ext 569 number that several people have had success with. The Spanish language line idea is also brilliant - I speak both languages so that could be another option if the English lines are jammed. At this point, after almost 7 weeks with zero updates, I think we definitely qualify for TAS assistance since we've clearly exhausted normal channels. Thanks everyone for sharing your experiences - it's reassuring to know we're not alone in this frustrating situation!

I'm in the exact same situation and it's incredibly frustrating! Filed 1/29 and haven't seen any movement on transcripts, WMR, or SBTPG either. After reading through everyone's experiences here, I'm convinced that calling the Taxpayer Advocate Service at 877-777-4778 early in the morning is our best shot. Miguel's success story really gives me hope - having an actual case advocate assigned who follows up sounds like exactly what we need after weeks of getting nowhere with the regular IRS lines. I'm also going to try the 866-682-7451 ext 569 number as a backup plan. It's ridiculous that we have to become phone system ninjas just to get basic information about our own returns, but I'm grateful everyone is sharing what actually works. Will definitely update if I manage to get through - we're all in this together!

Has anyone actually successfully qualified for trader tax status while doing swing trading? I'm holding positions for about 2-3 weeks on average, making maybe 6-8 trades per week. My tax guy says I'm nowhere near the volume needed, but then I read about others claiming trader status with similar patterns.

The consensus here is spot on - swing trading with your holding periods typically won't qualify for trader tax status or provide the tax benefits you're hoping for with an LLC or S-Corp structure. However, there's one angle that hasn't been fully explored: if you're planning to scale up your trading activities significantly in 2025, it might be worth considering the entity structure now to avoid complications later. The administrative burden of transferring existing positions from individual to business accounts can be substantial. That said, at your current activity level, you're likely better off focusing on maximizing the deductions you can already take as an individual investor - things like investment advisory fees, research subscriptions, trading software, and a portion of your home office if used exclusively for trading research. The real question is whether you see your trading evolving into something more substantial where you'd eventually meet the criteria for trader tax status. If not, the entity formation is probably an unnecessary expense and complication for your current situation.