Pro tip: Take clear photos of your donated items and get an itemized receipt from the charity. The IRS has been getting stricter about documentation for noncash donations. I use the Salvation Army donation value guide to determine FMV - you can find it online and it makes filling out Form 8283 much easier.

This is exactly the kind of situation that trips up a lot of taxpayers! You're absolutely correct in your understanding. Since your total noncash donations ($630) exceed $500, you must file Form 8283, but you only need to complete Section A, Part I because neither category individually exceeds $500. One thing to keep in mind - make sure you're grouping your items correctly. The IRS considers "clothing" as one category and "household goods" as another, so your $250 in clothing and $380 in household items would be treated as separate groups for the $500 threshold test. Also, don't forget that you'll need contemporaneous written acknowledgment from the charity for any single contribution of $250 or more. Since both your clothing donation ($250) and household goods donation ($380) meet this threshold, make sure you have proper receipts from the organizations. The IRS has been paying closer attention to noncash donations lately, so keeping good records and photos of donated items is more important than ever. Sounds like you're on the right track though!

This thread has been incredibly helpful! I was in almost the exact same situation as the original poster - making around $30k and maxing out my 401k, then getting confused about IRA limits. What really clicked for me reading through these responses is the distinction between "earned income" (which includes your 401k contributions) and "taxable wages" (Box 1 on your W-2, which doesn't). I had been looking at Box 1 and thinking that was my limit for IRA contributions. It's also reassuring to see multiple people confirm this with actual experience and even official IRS confirmation. The tax code can be so confusing, especially when you're trying to optimize multiple retirement accounts at once. Thanks to everyone who shared their knowledge and resources - this community is awesome for getting reliable tax advice!

This is exactly the kind of question that shows how unnecessarily complex the tax code can be! I went through this same confusion when I started maximizing both my 401k and IRA contributions. To add to all the great explanations here: think of it this way - your employer reports your full gross wages to the Social Security Administration and for Medicare purposes regardless of your 401k contributions. That's the same income base the IRS uses for determining IRA contribution eligibility. One thing I didn't see mentioned is that this rule also applies to other pre-tax deductions like health insurance premiums, HSA contributions, and flexible spending accounts. None of these reduce your "earned income" for IRA purposes, even though they all reduce your taxable wages in Box 1 of your W-2. The IRS basically wants to make sure you can't game the system by loading up on pre-tax deductions to artificially lower your earned income and then claim you can't contribute to retirement accounts. It's actually designed to help savers, not hurt them!

You're absolutely correct that loan repayments aren't taxable income - you're just getting your own money back. And unfortunately, these repayments can't be counted toward EITC since they're not "earned income" from work. Just wanted to add one important point that others haven't mentioned: if you're lending money to family members regularly, it's smart to keep simple records even for interest-free loans. A basic written note stating the loan amount, date, and repayment terms can save you headaches if the IRS ever questions large deposits in your bank account. Also, if your brother ever can't pay you back, having documentation helps if you need to claim it as a non-business bad debt deduction. Nothing fancy required - even a simple text message thread discussing the loan terms could work as documentation.

Great question! You're absolutely right - loan repayments are not taxable income since you're just getting your own money back. The IRS doesn't consider this "new" income. Regarding EITC, loan repayments unfortunately can't count as earned income. The EITC specifically requires income from employment, self-employment, or certain disability benefits. Since loan repayments aren't wages or earnings from work, they don't qualify. One tip: even though this was an informal family loan, consider keeping some basic documentation (even just text messages about the arrangement) in case you ever need to explain large deposits to the IRS. It's not required, but it can save headaches if questions come up later. If you had charged your brother interest, only that interest portion would be taxable income - but since it sounds like this was interest-free, there's nothing to report on your taxes at all.

I'd strongly recommend documenting everything thoroughly regardless of how you classify these expenses. Take photos showing the condition before and after the work, keep all invoices and contracts, and write a brief explanation of what problems you were solving (drainage issues, tenant damage to lawn). The repair vs. improvement distinction can be subjective, and good documentation helps support your position. For drainage work that fixes existing problems, you're generally on solid ground treating it as a repair. For the re-seeding to restore tenant damage, that also leans toward repair classification. One additional consideration - if you do treat these as repairs on Schedule E, make sure your total repair expenses don't seem disproportionate to your rental income. Large repair deductions sometimes trigger additional scrutiny, so having that documentation ready is especially important. Also consider consulting with a tax professional if the amounts are significant relative to your overall tax situation. The $5,800 you spent could result in substantial tax savings if properly classified, making professional advice cost-effective.

Something to consider that might help with your situation - the IRS has specific guidance on "betterments" versus repairs in Treasury Regulation 1.263(a)-3. A betterment is something that materially increases the value, substantially prolongs the useful life, or adapts the property to a new or different use. For your grading work to fix drainage issues, this sounds like you're correcting a defect rather than making a betterment. The regulation specifically mentions that work to correct pre-existing defects is generally considered a repair. Since the drainage problems were causing the backyard to be unusable, fixing this restores the property to its expected functional state. The re-seeding after tenant damage also fits the repair category since you're restoring the property to its condition before the damage occurred. The key test is whether you're putting the property back to how it was, versus making it better than it was. Given that this is $5,800, I'd definitely recommend keeping detailed records as others mentioned, and consider having a tax professional review your situation. But based on what you've described, both expenses sound like they qualify as repairs that you can deduct immediately on Schedule E rather than having to capitalize and depreciate over time.

Great question! I was in a similar situation a few years ago and can confirm what others have said - the math is $48,350 (0% LTCG bracket) + $15,950 (standard deduction) = $64,300 total you can realize tax-free as a single filer with no other income. One thing I'd add that hasn't been mentioned much - be really careful about the timing of any sales if you're close to that limit. Since you're unemployed now, this is actually the perfect time to do this strategy. But if you think you might get a job later this year, remember that even a few months of employment income could push you over the 0% bracket. Also, don't forget to keep good records of your cost basis and purchase dates. The IRS has been cracking down on people who can't properly document their long-term holding periods. I learned this the hard way when I had to dig through old brokerage statements during an audit. The strategy you're considering is completely legitimate and can save you thousands in taxes - just make sure you execute it carefully!

This is exactly the kind of strategic tax planning that can make a huge difference during unemployment! One additional consideration I'd mention is to be mindful of any estimated tax payments you might need to make if you do realize significant gains. Even though your federal tax liability might be zero, if you have substantial capital gains (like the $60k+ range being discussed), you might still need to make estimated payments to avoid underpayment penalties - especially if you had tax liability in prior years. The IRS safe harbor rules can be tricky to navigate when your income profile changes dramatically. Also, since you're job hunting, consider the timing of when you might start earning employment income again. If you land a job in Q4 of this year, even a few months of salary could push some of your capital gains into the 15% bracket. You might want to front-load your investment sales earlier in the year while you're certain about your income situation. The unemployment period is actually a unique opportunity for this type of tax optimization that many people don't think to take advantage of. Just make sure you're not selling investments you might need to buy back soon - you don't want to trigger wash sale rules if you're planning to reinvest the proceeds.