Random question - has anyone used the new safe harbor for small rental activities? I think if your adjusted basis in the property is under a certain amount, you can potentially avoid some of the passive activity loss limitations. Worth looking into maybe?

One thing that might help clarify your situation - since you mentioned this is through an LLC partnership, make sure you understand your ownership percentage and how that affects the losses flowing through to you personally. If you're not a 100% owner, your K-1 will only show your proportionate share of the $38,000 in renovation expenses. Also, keep detailed records of any time you spend managing this rental property (even during renovation phase) - hours spent coordinating contractors, researching materials, visiting the property, etc. This documentation becomes crucial if you want to qualify for the active participation exception or potentially the real estate professional status in future years. The fact that you haven't had tenants yet doesn't disqualify you from the rental activity treatment, but it does mean you'll want to be extra careful about demonstrating that this is indeed intended as a rental business and not just a personal investment that might be reclassified by the IRS.

Has anybody else tried using business expenses they don't have receipts for? I'm in a similar situation (got about $32k on 1099-NEC) and used some of my apartment for work, plus my personal laptop, but don't have specific receipts for those. FreeTaxUSA let me enter them, but now I'm nervous.

The $4.5k-$5k tax bill is definitely normal for your situation! As others mentioned, self-employment tax is the big killer - you're paying both sides of Social Security and Medicare taxes (about 15.3%) plus regular income tax. A few things that might help going forward: 1. **Track everything better this year** - get a separate business checking account and run all business expenses through it. Makes record-keeping so much easier. 2. **Home office deduction** - if you use part of your living space exclusively for work, you can deduct that percentage of rent/utilities. Even a corner of your bedroom counts if it's your dedicated workspace. 3. **Equipment depreciation** - that laptop, desk, chair, etc. can be depreciated over several years rather than deducted all at once, which might spread out the benefit. 4. **Mileage** - track any driving for work (client meetings, picking up supplies, etc.) at 65.5 cents per mile for 2023. The phone at 50% business use sounds totally reasonable. I'd also look into whether any of your college courses relate to your work - sometimes continuing education can be deductible. Don't stress too much about this year's bill - it's a harsh welcome to self-employment taxes, but now you know what to expect and can plan accordingly!

Just a warning - don't skip reporting this! I didn't report $230 of excess scholarship income a few years ago because my tax software didn't prompt me to, and I got a letter from the IRS about 8 months later asking for additional tax payment plus a small penalty. Schools report the scholarship amounts to the IRS on form 1098-T, so they can match that against your return.

I had this exact same issue last year! The key is that most tax software doesn't automatically flag excess scholarships as taxable income, even though it should. What worked for me was manually entering it in the "Other Income" section. In most tax programs, look for something like "Other Income" or "Additional Income" - it's usually in the main income section but might be buried under "Less Common Income" or similar. Enter the $156 with a description like "Excess Scholarship" or just "SCH" and it should flow to Schedule 1, Line 8. The important thing is that this excess amount is definitely taxable income that needs to be reported. The IRS gets a copy of your 1098-T from your school, so they'll expect to see that excess amount somewhere on your return if it exists. Don't risk having to deal with correspondence from the IRS later - it's much easier to just add it now!

Another option if you filed with a tax preparer: call them! I lost all my docs in a computer crash and my accountant had copies of everything going back 7 years. Most preparers keep records for at least 3-5 years by law.

Just to add a timeline perspective - I requested transcripts by mail using Form 4506-T and it took exactly 12 days to arrive. Online was instant but I needed the mailed copy for some reason I cant remember. Just FYI if ur on a deadline!

Pro tip: If you're calling about an extension, make sure you're using the right number. The IRS has different lines for different issues.

I've dealt with this exact same issue! What worked for me was using a landline instead of a cell phone - the connection seemed more stable. Also, make sure you're not on speakerphone or using Bluetooth headphones, as those can cause connection issues. Another trick is to press a random number key every few minutes during the hold time to keep the line "active" - sometimes the system drops calls it thinks are inactive. Hope this helps and you can finally get through! 🤞