That's amazing! I didn't know about this policy. Do you know if it would apply to my situation since I missed 2021 and 2022? Could I get the penalties waived for just 2021 or would it not work since I missed multiple years?

The First Time Penalty Abatement typically only applies to the first tax year in which you had an issue, so in your case, it would likely only apply to 2021. It wouldn't cover 2022 because by then, you no longer had a "clean compliance history" due to the 2021 issue. The good news is that getting the penalties waived for even one year can make a significant difference. For your 2021 tax year, this could potentially save you hundreds or even over a thousand dollars depending on your original tax amount. After you file all your returns, you can call the IRS and specifically request a "First Time Abatement" for the 2021 tax year. Just make sure you've filed all your back taxes before making the request.

I used FreeTaxUSA for my previous year returns and it worked great. They charge like $15 for prior year federal returns and their interface is easy to use. You just need to make sure you're in the right tax year when you start - they have separate sections for each year.

Oh that's something I hadn't considered at all! I bought the furniture back in October but didn't actually set it up and start using it until November. Does the "placed in service" date mean when I bought it or when I actually started using it? And what's this half-year convention thing?

The "placed in service" date is when the property is ready and available for its intended use - so that would be November when you set it up, not when you purchased it in October. The half-year convention is a simplification rule that assumes you placed assets in service halfway through the year, regardless of when you actually started using them. So for the first year of a 7-year property with straight-line depreciation, you'd take 1/14th of the cost (half of 1/7th). However, if you place more than 40% of your total assets for the year in service during the last 3 months, you have to use the mid-quarter convention instead, which is more complicated and bases your first-year depreciation on which quarter you placed the asset in service.

I use TurboTax Self-Employed and it handles depreciation pretty well. When you get to the business expenses section, there's a separate category for assets that need to be depreciated. Just follow the prompts and it'll ask for purchase date, cost, and business use percentage. It automatically applies the correct MACRS schedule for office furniture (7 years). Office furniture isn't "listed property" so you'd select "no" for that question.

What about the LLC protection itself? Does it actually do anything for you besides potential tax benefits? Like protecting personal assets if a trade somehow went catastrophically wrong?

The LLC provides some asset protection, but it's limited for trading activities. It mainly protects against business creditors, but since brokerages require personal guarantees, the protection for trading losses is minimal. The main benefit was being able to establish a separate business entity for tax purposes. For catastrophic trading scenarios, the LLC wouldn't protect me from losses on trades I authorized. Where it does help is separating my trading assets from personal assets for general liability purposes. I still maintain separate accounts, separate records, and never commingle personal and business funds, which strengthens both the liability protection and the tax treatment as a business.

Does making the mark-to-market election mean ALL your investments have to be treated that way? I have some long-term holdings I definitely don't want treated as ordinary income when I eventually sell.

This is really helpful, thanks! Is there any way to check for the "approved" status, or do they only tell you once the refund is actually sent? The IRS tracker just shows "accepted" with no further details.

The "Where's My Refund" tool on the IRS website or app will update to show "approved" status once they reach that stage. It will then give you an actual refund date. Some people never see the "approved" status and just go straight to "refund sent" if the processing happens quickly. If you filed electronically with direct deposit and have a simple return, you might see your refund in your account before the tracker even updates. The tool sometimes lags behind the actual processing by a day or two. But if you're at 21+ days since acceptance with no update, that's when you might want to call and check if there's an issue.

Credit Karma (now Cash App Taxes) is reliable. I've used them for 3 years with no issues. Processing time has nothing to do with which software you used - it depends on your return complexity and IRS workload. Check the IRS "Where's My Refund" tool or IRS2Go app for the most current status. If it's only been 3 days since acceptance, just give it time. Most refunds come within 21 days.

Can a real estate agent really provide documentation that would satisfy the IRS though? I'm worried about getting audited and having to justify my numbers.

What you want is documentation showing how you arrived at a reasonable allocation, not necessarily an official appraisal. The IRS recognizes that determining exact land values isn't an exact science. A realtor can provide comparative market analyses (CMAs) of similar properties showing their land-to-building ratios, which demonstrates you used a reasonable method based on actual market data. If you're particularly concerned about audit risk, you could have the realtor write a brief letter explaining the methodology used to determine the typical ratio in your area, and keep this with your tax records. The key is being able to show you made a good faith effort to determine an accurate and reasonable allocation, rather than just making up numbers.

Is this still true with the 2025 tax year changes? I thought there was something about this rule being modified.