Just went through this exact process two weeks ago as a new graduate - totally understand the stress! Here's what I wish someone had told me upfront: **Don't panic - this is super common for recent grads.** The IRS flags returns with education credits, multiple income sources (like assistantships, internships, etc.), or major life changes. It's their fraud protection, not an audit. **My timeline:** - Online notification appeared when I tried accessing my transcript - Physical letter (5071C) came 8 days later - Completed ID.me verification in 40 minutes using laptop - Refund processed exactly 16 days after verification **Key prep tips:** - Use a desktop/laptop - mobile interface is unreliable - Have documents ready: photo ID, Social Security card, recent address proof - Do it near a window for good lighting during selfie verification - Take screenshots of every confirmation page **The selfie part:** This was the trickiest - took me 5 attempts. Remove glasses if you wear them, face the camera straight on, and make sure lighting is even across your face. Natural light worked best for me. Since you mentioned having a more complex tax situation now, keep all your verification documentation. Future returns might be smoother, but it's good to have records if needed. The process feels invasive but it's legitimate and once you're through it, you'll have peace of mind. Your refund will come - just budget about 2-3 weeks total from verification to deposit. You've got this!

Hey Connor! I just went through this exact same situation about a month ago - recent grad with a complex tax return including education credits and multiple income sources. Here's my experience: **What to expect:** - You'll likely see the online notification first in your IRS account (under "Get Transcript" section) - Physical letter follows 7-14 days later - don't wait for it, start immediately when you see online notice - The ID.me process can be completed entirely online for most people **My verification process:** - Took about 45 minutes total using a laptop (don't use mobile - interface is terrible) - Documents needed: driver's license, Social Security card, recent utility bill/bank statement - The selfie verification was the trickiest part - good lighting is essential, remove glasses if you wear them - Got confirmation email same day from ID.me - Refund hit my account 19 days after completing verification **Pro tips:** - Have all documents ready before starting - Use natural light near a window for the selfie part - Take screenshots of every confirmation page - Be patient with facial recognition - it often takes multiple attempts Since you mentioned this is your first time with a complex tax situation, this verification is actually pretty standard for recent grads. The IRS flags returns with education credits, multiple income sources, or significant changes from previous years as a fraud prevention measure. The process feels overwhelming at first, but it's legitimate and once you complete it, your refund processing will resume normally. Don't stress too much - you've got this!

Hey just a heads up - dont forget about the quarterly estimated tax payments if you're making decent money from tutoring! I got hit with a penalty my first year because nobody told me about this. If you expect to owe more than $1000 in taxes for the year, you're supposed to make quarterly payments.

Welcome to the world of self-employment taxes! As a fellow young entrepreneur who started tutoring in college, I totally get the confusion. Here are some key points that might help: First, you're right that you need to report income over $400, and yes, you'll owe self-employment tax on your net profit (around 15.3%). The IRS can definitely track your income through payment processors like Venmo and PayPal - they report transactions over certain thresholds. Regarding your college expenses: unfortunately, you can't deduct your general education as a business expense just because it helps your tutoring. The IRS distinguishes between education that maintains/improves existing business skills versus education that qualifies you for a new profession. Since you're pursuing a degree, that typically falls into the latter category. However, you CAN deduct legitimate business expenses like: - Mileage to/from tutoring sessions (keep a detailed log!) - Tutoring materials, books, supplies - Business portion of phone/internet if used for tutoring - Any software or apps specifically for your tutoring business My advice: open a separate account for tutoring income ASAP and track every business expense. Even if your net profit is small after legitimate deductions, you'll still likely owe some self-employment tax. But proper record-keeping will ensure you're only paying what you actually owe! Also consider setting aside 25-30% of each payment for taxes so you're not caught off guard at filing time.

I've been dealing with this exact same issue for years! What finally helped me was creating a simple spreadsheet that tracks all my investments and their K-1 history. I list the investment name, ticker (if applicable), entity type (MLP, partnership, etc.), and the dates I received K-1s for the past 3 years. This gives me a pattern to work with. One thing I learned the hard way is that even "safe" investments can surprise you. I had a utility stock that got acquired by an MLP structure mid-year and suddenly started generating K-1s. Also, some funds that invest in MLPs or partnerships will pass through K-1s even though they look like regular mutual funds. My rule now is: if I don't have all expected K-1s by March 1st, I automatically file an extension. The peace of mind is worth it, and I've never had to pay penalties since I estimate and pay any additional taxes owed when filing the extension.

This is such a timely discussion! I've been burned by surprise K-1s multiple times and it's honestly one of the most frustrating parts of tax season. Reading through all these suggestions, I think I'm going to combine a few approaches - definitely setting up that spreadsheet that @9d85497233c0 mentioned, and I'm curious about trying both the taxr.ai tool and Claimyr for those impossible-to-reach partnerships. One thing I'd add is that I've started asking my financial advisor explicitly about K-1 implications before making any new investments. A lot of advisors don't automatically flag this unless you specifically ask. Mine now marks any K-1-generating investments in my portfolio with a special note, and we review the list every January to set expectations for tax filing timing. Also, for anyone with employer 401k plans - some company plans now include MLP options or alternative investment funds that can generate K-1s. I almost got caught by this last year when my company added some energy sector partnership options to our retirement plan menu. Definitely worth checking if you've made any changes to your 401k elections recently.

Slightly off topic but does anyone know if section 179 vehicles have to be over 6000 lbs? Im looking at buying a work vehicle but I'm not sure if my SUV qualifies.

I'd strongly recommend consulting with a tax professional before making any moves here. The recapture rules for Section 179 are pretty strict - when you sell that truck, you'll likely owe ordinary income tax on the sale proceeds up to the amount you originally deducted ($98k). One thing to consider is the timing of both transactions. If you're planning to buy another qualifying vehicle this year, you might want to structure the timing so that the recapture income from the sale is partially offset by the new Section 179 deduction. This won't eliminate the tax hit entirely, but it could help manage the cash flow impact. Also keep in mind that there are annual limits on Section 179 deductions ($1,160,000 for 2023), so make sure you have enough "room" left if you've already taken other business deductions this year. The rules can get complex when you're dealing with multiple transactions in the same tax year.

Great question about EPD! You're actually thinking about this correctly - the $65 in distributions you received likely aren't immediately taxable because they're classified as a return of capital that reduces your tax basis in the partnership. Here's what's happening: EPD typically generates significant depreciation and depletion deductions that flow through to partners, which is why your K-1 shows negative income. The distributions exceed your allocated share of taxable income, so the excess reduces your basis rather than creating a current tax liability. The key things to track going forward: 1. Your original purchase price (basis) 2. Each year's distributions (these reduce basis) 3. Any income/loss allocations from the K-1 4. Your adjusted basis = original basis - cumulative distributions + cumulative income allocations You'll need this information when you eventually sell to calculate your capital gain/loss. Also keep in mind that any suspended passive losses from the partnership can typically be used to offset gains when you dispose of your entire interest in EPD. So yes, you're being appropriately optimistic - no immediate tax liability for 2023 from your EPD investment!

As someone who's dealt with EPD and other MLPs for several years, I wanted to add a few practical tips that might help you going forward: First, EPD typically sends out their K-1s quite late in tax season (often March), so plan accordingly if you're eager to file early. Second, consider setting up a simple tracking system now - I use a basic Excel sheet with tabs for each MLP I own, tracking original basis, annual distributions, and K-1 income/losses. One thing that caught me off guard initially was that even though you're not paying tax on the distributions now, you'll want to consider the tax implications when you do eventually sell. Since your basis keeps getting reduced by the distributions, you might end up with a larger capital gain than you initially expect. Also, if you're planning to buy more EPD shares, be aware that additional purchases will have their own basis tracking requirements. Each lot purchased will have its own cost basis that gets reduced by the proportional share of distributions. The good news is that EPD has been pretty consistent with their distribution policy, so the tax treatment should remain fairly predictable year over year. Just keep good records and you'll be fine!