Check your mail like a hawk. I had this last year and missed their letter asking for ID verification. Delayed everything by 2 months smh

Code 810 with early filing is pretty normal - they're probably just doing their usual verification checks since you filed so early in the season. I wouldn't stress too much unless you get a letter asking for docs. Most of these clear up automatically within 2-3 weeks once they finish processing the backlog from holiday season.

Have you guys had any issues with tax software handling these kinds of rental income situations? I tried using TurboTax last year and couldn't figure out where to report services received as rental income.

This is such a helpful thread! I'm dealing with a similar situation where my tenant handles snow removal in winter and takes $150 off rent each month during snow season. Based on what everyone's saying here, it sounds like I should be reporting my full rent amount ($2200) as income for all 12 months, then claiming the snow removal as a maintenance expense during those winter months when the service is actually provided. One question though - do I need to issue a 1099 to my tenant for the snow removal services? Since it's over $600 for the year, I'm wondering if there are any reporting requirements on my end beyond just the Schedule E entries. Also, for documentation purposes, would it be smart to have the tenant submit invoices or receipts for the work even though they're doing it themselves? I want to make sure I have proper backup in case of an audit.

Here's another important consideration with MTM that people often miss: if you make the election, you can't cherry-pick which securities it applies to. It applies to ALL your securities that are held in connection with your trading business. I made this mistake thinking I could keep some investments separate. You need to clearly segregate investment accounts from trading accounts BEFORE making the election. Investment positions can be excluded, but you need clear documentation.

One MTM example that helped me understand: I had $120,000 in realized gains in 2024, and on December 31st, I had $45,000 in unrealized losses and $15,000 in unrealized gains. Without MTM: Only my $120,000 realized gains would be taxable. With MTM: My taxable income would be $120,000 - $45,000 + $15,000 = $90,000. But the real benefit came the next year. Those positions that were "marked to market" started 2025 with a new basis. When I actually sold them later, I only had to pay tax on the gains from the January 1st price, not my original purchase price. Saved me from the wash sale headache too!

I messed up on this last year... I didn't file a 5500 for our S-corp health insurance arrangement (5 employees) and then got a notice from the DOL. Turns out we had set up our health insurance as a formal group plan with a third-party administrator, which technically did require a 5500 filing even though we were small. Had to file a late 5500 and pay some penalties. So definitely double-check how your health insurance is structured! Don't just assume you're exempt because you're small.

Based on what you've described - 3 employees total and paying a portion of individual health insurance premiums directly from your business account - you're very likely exempt from Form 5500 filing requirements. Since you have fewer than 100 participants and you're paying from general business assets rather than maintaining a formal plan with assets, you fall under the small employer exemption. However, Emma's experience above is a great reminder that the structure matters. If you're simply reimbursing individual premiums, that's typically a health reimbursement arrangement (HRA) which is generally exempt. But if you have a formal group plan through an insurance carrier or third-party administrator, different rules might apply. I'd recommend documenting exactly how your arrangement is structured - are you reimbursing employees for individual policies they purchase, or do you have a group health plan where you pay premiums to an insurer? Keep records of your setup in case you ever need to demonstrate your exemption status. The key is being able to show you don't have a formal ERISA plan that requires 5500 filing.

I got this letter last month too!! Found out it happened because I had a W-2 from a job I worked for only 2 weeks and forgot to include it on my return. Wasn't identity theft at all, just me messing up lol. Still had to go through verification tho.

I went through this same situation about 6 months ago and it was stressful at first, but turned out fine. The key thing to remember is that receiving an identity verification letter doesn't necessarily mean your identity was actually stolen - the IRS has become much more cautious and flags returns for various reasons. In my case, it was triggered because I had started a side gig and reported 1099 income for the first time. The verification process took about 2 weeks once I called (took me several attempts to get through), and my refund was released 5 weeks after that. Make sure you have your prior year return, current year return, and the letter when you call. Also, try calling early in the morning (8 AM) or later in the afternoon - I had better luck getting through during those times. Don't panic, this is more common than you'd think and gets resolved once you verify your identity.