As a newcomer to this community, I'm absolutely blown away by the wealth of knowledge and support shared in this thread! This has been an incredible education in taxpayer rights that I never knew I needed. I'm still pretty new to handling my own taxes (just finished my first year filing independently), and @Ella Cofer's situation is exactly the kind of nightmare scenario I've been worried about. The idea that you can follow all the rules perfectly - mail on time, get proper postmarks, even document everything with photos - yet still have to fight multiple IRS agents who give incorrect information is both eye-opening and concerning. @Amara Chukwu, your insider expertise about IRC Section 7502 and Treasury Regulation 301.7502-1 is invaluable! Having those specific citations from someone who actually worked at the IRS gives me real confidence that there are legitimate protections in place for taxpayers, even when individual agents might not apply them correctly. What really strikes me is how this demonstrates the critical importance of documentation and knowing your rights. The practical advice shared here - taking photos of postmarked envelopes, saving all confirmations, knowing which regulation numbers to cite - feels like essential knowledge that should be taught to everyone filing taxes, not something you have to learn from community forums after problems arise. I'm definitely switching to electronic payments after reading all this, but it's reassuring to know these protections exist for situations where mailing might be necessary. This thread is going straight into my "essential tax reference" bookmarks - thank you to everyone who shared their experiences and expertise!

As a newcomer to this community, I'm incredibly grateful I found this thread! Reading through everyone's experiences has been both educational and eye-opening about how to properly handle IRS disputes. I'm relatively new to managing my own tax obligations, and @Ella Cofer's situation is exactly the kind of scenario that would have left me completely stressed and unsure how to proceed. The fact that you can follow all the proper procedures - mailing on the deadline, getting a clear postmark, even documenting it with photos - yet still face incorrect penalties from agents who don't seem to understand their own regulations is honestly shocking. @Amara Chukwu, thank you so much for sharing your expertise about IRC Section 7502 and Treasury Regulation 301.7502-1. Having those specific legal citations from someone with actual IRS experience gives me real confidence that there are legitimate protections for taxpayers when these situations arise. It's concerning that we need to become mini tax law experts to get basic rules applied correctly, but at least now I know exactly what to reference. The practical advice throughout this thread - from documentation strategies to escalation procedures to specific regulation numbers - feels like a crash course in taxpayer self-advocacy that you just can't get from official publications. The community support and knowledge sharing here is exactly what makes navigating these complex bureaucratic systems feel manageable for those of us still learning. I'm definitely bookmarking this discussion as my go-to resource for any future IRS issues. Thank you to everyone who shared their experiences and expertise - this is invaluable guidance for newcomers like me!

One thing nobody has mentioned yet - make sure you're tracking utilities separately if possible! I installed separate meters for electric and gas in my rental portion, which makes it super clear what's deductible. If you don't have separate meters, you need a reasonable method to allocate those costs. Also, be careful about claiming home office deductions if you're already allocating part of your home as rental property. You can't double-dip and claim the same square footage as both rental property and home office.

This is such a helpful thread! I'm dealing with a similar situation but with a twist - I converted my garage into a studio apartment that I rent out. It shares the main house's electrical panel and water heater, but has its own entrance and bathroom. One thing I learned from my tax preparer is to be really careful about improvements vs. repairs when allocating expenses. The water heater replacement you mentioned would typically be considered an improvement and needs to be depreciated over time rather than deducted all at once. But if it was just a repair (like fixing a broken component), then you could deduct your allocated percentage immediately. Also, don't forget to consider whether your local zoning allows rental use - the IRS sometimes looks at this during audits to verify legitimate business purpose. And keep detailed records of everything! I use a simple spreadsheet to track all expenses with photos and receipts. It's been a lifesaver for staying organized. The mini-split system you installed exclusively for the rental area is definitely 100% deductible (though as a capital improvement, it would be depreciated). That's the nice thing about expenses that clearly benefit only the rental portion!

Has anyone used TurboTax Self-Employed for their Etsy/eBay sales? I've used regular TurboTax before but never the self-employed version. Does it help with all this confusion or is it worth paying for an actual accountant?

I feel your pain! I went through the exact same confusion when I started my small pottery business on Etsy two years ago. The tax requirements really do feel like they throw you into the deep end without a life jacket. Here's what I wish someone had told me from the beginning: Start simple and build your system as you go. I got so overwhelmed trying to track every penny perfectly that I almost gave up entirely. The most important thing is to separate your business from personal expenses right away - even if it's just a simple spreadsheet or a separate checking account. Track your major expenses (materials, shipping, platform fees) and keep all your receipts. You don't need to be perfect from day one. For the hobby vs business question - if you're actively trying to make money and treating it like a business (marketing, improving your products, etc.), then report it as a business. The IRS looks at your intent and effort, not just profit. The $600 threshold honestly isn't as scary as it sounds. You've always been supposed to report this income anyway, now the platforms just have to tell the IRS about it too. But remember - you're only taxed on PROFIT, not total sales. Don't let the tax stress kill your entrepreneurial spirit! It gets easier once you establish a routine, and there are good resources out there to help. Your side hustle can definitely be worth it - just take it one step at a time.

Just to reinforce what everyone else has said - you're absolutely right to file as Single in your situation. I see a lot of people get confused about Head of Household because the name makes it sound like it's about who runs the household or pays the bills, but it's really only about supporting qualifying dependents. Since you're 27, financially independent, and don't have any dependents of your own, Single is your only option regardless of your living arrangement with your parents. The IRS doesn't care that you're helping with utilities and groceries - that's just being a good family member, not a tax status qualifier. Your instinct about not wanting to mess up your parents' taxes was smart too. Even if multiple people could somehow claim HOH at the same address (which isn't your situation anyway), it would definitely raise flags. But filing as Single while they handle their own return appropriately? No issues whatsoever. Keep it simple, file as Single, and don't overthink it. You're handling this exactly right by asking questions upfront rather than guessing!

I'm glad to see such a thorough discussion here! As someone who's dealt with similar living arrangement questions, I wanted to add that it's worth double-checking your state tax situation too. While your federal filing status should definitely be Single (as everyone has correctly explained), some states have different rules or additional considerations for residents living in multi-generational households. Also, since you mentioned paying your parents for utilities and groceries, make sure you're not accidentally creating any gift tax implications if you're contributing large amounts. For most typical arrangements this isn't an issue, but it's something to keep in mind if you're paying them several thousand dollars annually. The consensus here is absolutely right though - file as Single federally, keep good records of your contributions to the household, and don't worry about the shared address causing any IRS issues. You're being smart by asking these questions upfront rather than guessing!

My states been pending since last year lmaooo welcome to the club 💀

The "accepted" vs "processed" thing confused me too when I first started filing! "Accepted" just means the IRS received your return and it passed their initial computer checks (no obvious errors, SSN matches, etc.). "Processed" means they've actually reviewed it, applied any credits/deductions, and determined your final refund amount. The 21-day processing time starts from when it's accepted, not processed. So you're still well within the normal timeframe - don't stress! Your federal return is moving through the system normally.