I'm going through the exact same thing right now! Got my letter last week and honestly the whole process feels overwhelming. From what I've been reading here it sounds like the key is just being persistent and having all your documents ready. Really appreciate everyone sharing their experiences - makes me feel less alone in this stressful situation. Definitely going to try calling early morning like @Lilah Brooks suggested!

Just went through this exact same thing 2 months ago! The identity verification was definitely stressful but here's what I learned: 1) The ID.me route can be glitchy but if you have good internet and lighting it usually works on the 2nd try, 2) Keep checking your transcript every Friday - that's when most updates happen, 3) Once you see your 846 refund code appear, you'll typically get your money within 3-5 business days. The whole process from verification to refund took me about 5 weeks. Stay patient - I know it's hard when you need the money but it will come through!

Has anyone thought about the mortgage implications here? OP, you mentioned your parents said the house is "paid off" - but if there's still a mortgage on it when they gift it to you, that could be considered additional gift value or even trigger a due-on-sale clause with their lender. My sister ran into this issue last year. My parents "gifted" her their second home, but there was still a $97k mortgage. The IRS considered the gift to be the house PLUS taking over the debt! Created a whole mess with the gift tax forms.

Great question! I went through something very similar with my parents' property in 2022. Based on my experience and research, option #3 is definitely your best route - having them gift you the house first, then selling it yourself. Here's why this works so well in your situation: You'll inherit their cost basis (around $170k with improvements), but since you've lived there as your primary residence continuously since 2012, you'll qualify for the full $250k capital gains exclusion. With your projected gain of about $205k ($375k - $170k), you'd likely owe zero capital gains tax. A few important considerations I learned the hard way: - Make sure the house is truly paid off before transfer. Any remaining mortgage can complicate the gift valuation. - Your parents will need to file Form 709 for the gift tax return, but won't owe any actual tax unless they've exceeded their lifetime exemption. - Consider waiting 2-4 weeks between receiving the gift and listing the property to avoid any appearance of a coordinated sale. - Check your state's transfer tax rules - some states have exemptions for parent-child transfers. The old "rollover" rules for deferring capital gains by buying another home were eliminated in 1997, so you can't defer the tax that way. But with the primary residence exclusion, you probably won't need to! I'd definitely recommend consulting with a tax professional to run the exact numbers for your situation, but this approach saved me about $35k in taxes compared to other options.

Am I the only one who thinks it's ridiculous that student aid can be taxable at all??? The government gives us grants because we need financial help for college, then turns around and taxes us on that same money? Make it make sense. 🙄

I completely understand your frustration - dealing with scholarship taxation can be really stressful! From what I've learned through my own experience and research, the key is tracking exactly how you used the refund money. Since you mentioned using the $1750 for rent and groceries, that portion would likely be considered taxable income. However, if you also purchased any required textbooks, lab supplies, or other course materials with scholarship money during the same academic year, you might be able to reduce the taxable amount. My advice would be to gather all your receipts and records from that semester - tuition bills, book purchases, required supplies, etc. Calculate your total qualified educational expenses and compare that to your total scholarship/grant amount. Only the excess beyond qualified expenses needs to be reported as income. Also, don't stress too much about perfect precision if you can't find every receipt. The IRS expects reasonable estimates based on your best recollection. Just be honest and consistent in how you calculate it. You've got this!

Be careful with dependent care FSAs - they're typically "use it or lose it" by the end of the plan year! I set aside $5000 last year and then our childcare situation changed (my mother-in-law retired and started watching the kids 3 days a week). We only spent about $3200 on paid childcare and LOST the remaining $1800 we had contributed! Still kicking myself over that one. Make sure you're very confident about your childcare expenses before committing to the full $5000.

Great question! I went through this exact same analysis last year. At your income level ($165k), you're definitely in a tax bracket where the Dependent Care FSA makes financial sense. Here's what I learned: The Child Tax Credit ($2,000 per qualifying child) is completely separate from childcare expenses and won't be affected by using the FSA. You'll still get the full $4,000 for your twins regardless. The FSA saves you taxes on that $5,000 contribution - at your income level, that's probably around $1,200-1,500 in tax savings depending on your state taxes. Since you're spending way more than $5,000 on daycare anyway, you're guaranteed to use the full amount. The "hassle" factor was my biggest concern too, but honestly it's pretty minimal. Most employers have mobile apps now where you just snap photos of receipts and submit them. I probably spend 10 minutes total per quarter on FSA paperwork. One tip: make sure to ask about your plan's grace period or rollover rules. Some plans let you carry over a small amount ($610 this year) or give you extra time to spend the money. Definitely worth maxing it out in your situation!

This is such a helpful thread! As someone who just started working with my first international contractor last month, I wish I had found this discussion earlier. One question I haven't seen addressed - what happens if you already made payments to international contractors earlier in the year but didn't get W-8BEN forms from them at the time? I paid a graphic designer in Romania about $800 over several months but didn't know about the W-8BEN requirement until now. Can I still get the forms retroactively and deduct those expenses on this year's taxes? Or did I mess up by not collecting the documentation upfront? I have all the PayPal payment records and our email communications about the work, but I'm worried the lack of proper tax forms might be a problem. Also really appreciate all the payment method suggestions - definitely going to look into Wise for future payments since the fees sound much better than what I'm paying with PayPal!

Great discussion here! I wanted to add one more consideration that saved me some headaches - time zone documentation. When working with international contractors, I started including time zone information in my payment records and contracts. This became important when I had a contractor in Australia who was technically working on projects during US business hours (their morning, our previous day). For audit purposes, having clear documentation of when work was performed helped establish that it was legitimate foreign contractor work rather than someone potentially working in the US. I also learned to be specific about deliverables and project-based work in my contracts. The IRS looks at the level of control you have over how, when, and where work is performed when determining contractor vs employee status. Making sure your agreements clearly establish that contractors control their own methods and schedules helps maintain proper classification, especially for international workers where the rules can get murky. One last tip - if you're using multiple payment methods (PayPal, Wise, etc.), create a simple master spreadsheet that tracks all payments regardless of platform. Come tax time, you'll have everything in one place instead of trying to reconcile multiple payment platforms. Makes the Schedule C preparation much smoother!