Just a heads up, there's another angle to consider. If you claim Section 179 on a vehicle over 6,000 lbs GVWR (gross vehicle weight rating), you get more favorable tax treatment. Might be worth looking at trucks in that category. Also, don't forget about the possibility of bonus depreciation instead of Section 179. The rules and limitations are different, and in some cases it might be more advantageous depending on your overall tax situation.

One thing I haven't seen mentioned yet is the potential impact on your quarterly estimated tax payments. Since you're dealing with a significant tax hit from the rental property sale ($140k capital gains + $32k depreciation recapture), you'll likely need to make estimated payments to avoid underpayment penalties. If you're planning to buy the truck this year to take advantage of Section 179, make sure to factor that deduction into your estimated payment calculations. The IRS expects you to pay as you go, so if your withholding from your W2 job plus any estimated payments don't cover at least 90% of this year's tax liability (or 100% of last year's if your AGI was over $150k), you could face penalties even if you get a refund when you file. Also, since your side business income is subject to self-employment tax, the Section 179 deduction will save you not just on income tax but also on the 15.3% SE tax portion, which adds up to meaningful savings on a $30k+ deduction.

Just wanted to add - whatever you do, KEEP DETAILED RECORDS of every interaction. Note the date, time, who you spoke with, and what was said. This saved me when I had a similar issue. I ended up having to go through a formal appeal process for a state tax issue, and they tried claiming I never responded to their initial notice. I had documentation of three phone calls and two written responses that proved otherwise, and that's what ultimately got the penalties waived.

I went through something very similar a few months ago and it was absolutely nerve-wracking! Here's what I learned from my experience: First, definitely verify this is legitimate by calling the Department of Revenue using the number from their official website, not the letter. Once you confirm it's real, gather ALL your documentation - TurboTax confirmations, bank statements showing any tax payments, and screenshots of your filing status. The most important thing is to act quickly but don't panic-pay. I made the mistake of waiting too long thinking it would resolve itself, and the penalties kept growing. Call them ASAP and explain you believe there's been an error. Many states will put a temporary hold on penalties while investigating if you can show reasonable cause for disputing. In my case, it turned out TurboTax had a glitch where my state payment didn't process even though I got a confirmation. The state was very understanding once I provided my bank statements showing the payment attempt and TurboTax records. Also, send everything certified mail if you need to submit documents - that way you have proof they received it. Don't just rely on phone calls for important communications. You've got this! Most of these issues are processing errors that can be resolved with persistence and good documentation.

I was in a similar situation last year and completely panicked about the tax implications! After doing tons of research and even consulting with a tax professional, I can confirm what others have said - depositing your own cash into Cash App is absolutely NOT a taxable event. The $850 you've deposited is money you already had, so there's no new income being created. It's exactly like taking cash from your wallet and putting it in your bank account. The IRS doesn't care what format your existing money is in - physical cash, bank account, or digital wallet. Cash App will only send you a 1099-K if you RECEIVE payments from other people for goods or services over $600 in a year. Your own deposits don't count toward this threshold at all. So unless you're also selling things or providing services through the app, you shouldn't receive any tax forms from them. Keep records showing these were your own funds being deposited (maybe note the dates and amounts), but you definitely don't need to report these deposits as income on your tax return. You're overthinking this - you're totally fine!

I totally understand the anxiety around this! I had the exact same worry when I started using Cash App more frequently. The bottom line is that you're absolutely fine - depositing your own cash into Cash App is not taxable income, period. Think of it this way: if you took that same $850 and deposited it into a regular bank savings account, would you owe taxes on it? Of course not! Cash App is just another way to store your money digitally. The IRS only cares about NEW income you earn, not moving existing money between different accounts or formats. The confusion often comes from hearing about 1099-K forms, but those are only issued when you RECEIVE payments from other people for goods or services exceeding $600 per year. Your own deposits never count toward that threshold because you're not receiving money from anyone else - you're just converting your physical cash to digital form. You mentioned this is "pocket money" you already had, so there's definitely no tax liability here. Just keep doing what you're doing to help your family, and don't stress about the tax implications of these deposits!

Anyone know if reporting income from a 1042-S affects your eligibility for the Foreign Tax Credit? I have both 1042-S and 1099-INT forms this year and I'm trying to figure out if I can claim FTC for both income types since some tax was withheld on the 1042-S.

I went through this exact same situation two years ago when I transitioned from F-1 student status to permanent resident. The key thing to remember is that you're absolutely on the right track - you do need to report this income on your Form 1040 even though you received a 1042-S. One thing I learned the hard way is to make sure you check if your bank has your updated residency status on file. Since you're now a resident, you should submit a new W-9 to replace any W-8BEN they have on file. This will ensure you get proper 1099-INT forms next year instead of dealing with this 1042-S situation again. Also, don't forget that if you had any tax withheld earlier in the year when you were still a non-resident (from other sources), you can claim credit for those withholdings on your 1040. The timing of your status change matters for determining what credits you're eligible for throughout the tax year.

One thing that hasn't been mentioned - make sure you're charging each other a reasonable interest rate! If it's too low (below the Applicable Federal Rate), the IRS can recharacterize part of the loan as a gift and create tax headaches. But if it's too high, your parents might face usury law issues depending on your state. When my parents loaned me money for my house, we set the rate at exactly the mid-term AFR for the month we signed the paperwork, which was around 2.5% at the time. The IRS publishes these rates monthly, so it's easy to find the appropriate rate.

Has anyone mentioned that you need to actually record the mortgage or deed of trust with your county for this to work? My wife and I did a similar loan with her parents and we skipped that step thinking the promissory note was enough. BIG mistake - we got audited and lost the entire mortgage interest deduction for that year!