Wait - I thought Head of Household was only for single parents with kids? Can you really claim HOH with a parent as your dependent?

Based on everything discussed here, it sounds like you have a strong case for claiming your mother as a dependent and filing Head of Household. Here are the key points that work in your favor: 1. **Dependency Test**: Your mom's Social Security likely doesn't count as taxable income since she has no other income sources, so she should pass the gross income test (<$4,700 for 2023). 2. **Support Test**: You're clearly providing more than half of their support with mortgage, utilities, groceries, and major repairs like that $3,800 roof. 3. **Marriage Issue**: Since neither your mom nor stepdad file tax returns, the usual restriction about married people filing jointly doesn't apply. 4. **Head of Household**: Since they live with you and you maintain the household, you qualify for HOH status. One thing to consider - could you potentially claim both your mother AND stepdad as dependents? If his Social Security is also non-taxable and you're supporting both of them, you might qualify for two dependency exemptions. That could increase your tax benefits significantly. I'd recommend documenting everything carefully - keep those receipts and create a detailed record of all support you provided throughout the year. This will be crucial if the IRS ever questions your filing status.

Has anyone had experience with what happens if you file with the incorrect W-2? My HR department is saying it could take 3-4 weeks to issue a corrected W-2, but I'm supposed to receive a large refund this year that I really need soon.

I just went through this exact situation last month! My employer made the same mistake - they put my Limited Purpose FSA contributions in Box 10 when they should have just been excluded from my taxable wages in Box 1. Here's what worked for me: I contacted both HR and our FSA administrator (in my case it was HealthEquity) at the same time. The FSA administrator actually reached out to HR on my behalf and helped expedite the correction since they deal with this type of reporting error frequently. While waiting for the corrected W-2, I also gathered all my benefit enrollment documents showing I specifically elected the Limited Purpose FSA, not the Dependent Care FSA. This documentation was super helpful when explaining the error to both HR and later to my tax preparer. One thing to note - make sure when you do get the corrected W-2 that they completely remove those contributions from Box 10. They shouldn't move them to another box, they should just disappear from the W-2 entirely since Limited Purpose FSA contributions are handled the same way as regular healthcare FSA contributions (just excluded from taxable wages). The whole process took about 10 days for me, which was much faster than the 3-4 weeks HR initially estimated. Good luck!

Just wanted to chime in as someone who's been managing inherited rental properties for several years. The passive loss rules can definitely be confusing, but you're on the right track with the active participation exception. One thing I'd add to all the great advice here - make sure you understand how the depreciation recapture will work when you eventually sell the property. With such a high stepped-up basis and substantial annual depreciation, you'll be recapturing potentially hundreds of thousands in depreciation at a 25% rate when you sell, even if the property appreciates. This doesn't mean you shouldn't take the depreciation (you should!), but it's worth factoring into your long-term planning. Also, consider whether you might benefit from a 1031 like-kind exchange when you eventually sell. This can defer both the capital gains and depreciation recapture taxes if you reinvest in another rental property. With your property value, this strategy could save you significant taxes down the road. The $25,000 active participation allowance is definitely your best immediate option given your situation, but don't forget to think about the bigger picture tax planning too!

This thread has been incredibly helpful! I'm in a somewhat similar situation with an inherited property, though not quite as high-value as yours. One aspect I haven't seen mentioned is the importance of getting your depreciation method election right from the beginning. With such a substantial stepped-up basis, you might want to consider whether the standard straight-line depreciation over 27.5 years is optimal, or if you should explore bonus depreciation on certain components through a cost segregation study (as Sarah mentioned earlier). The timing of this decision matters because once you start depreciating using one method, changing it later requires IRS permission via Form 3115. Also, since you mentioned this is a late 2023 inheritance, make sure you're aware of the mid-month convention for rental property depreciation. Your first year depreciation will be prorated based on the month you placed the property in service, not a full year's worth. Given the complexity and the substantial tax implications (both current benefits and future recapture), I'd really recommend consulting with a tax professional who specializes in rental property taxation. The potential tax savings and compliance benefits far outweigh the cost of professional advice in a situation like this.

Congratulations on your recent marriage! I totally understand the stress of waiting for funds you really need. As someone who's been through this exact situation, here's what I've learned: H&R Block generally doesn't deposit earlier than your DDD - that April 12th date is pretty firm. The only exception might be if your bank has an early direct deposit policy (some credit unions and online banks like Chime release funds 1-2 days early), but that would be your bank's decision, not H&R Block's. A few things that might help ease your anxiety: • Your refund is already approved if you have a DDD - that's the good news! • Set up account alerts so you're notified when it hits rather than checking constantly • The deposit usually happens very early morning (often between midnight-6am) Since you mentioned this is for your first apartment together, maybe use this week to finalize other moving preparations? The money will be there on the 12th. Hang in there - I know those 7 days feel like forever when you're waiting for something important! 💙

Hey Jordan! First off, congratulations on your marriage! 🎉 I totally get the stress you're feeling right now - waiting for money you desperately need is nerve-wracking. From my experience with H&R Block over the past few years, they're pretty strict about sticking to the DDD the IRS gives them. I've never seen them release funds early - that April 12th date is most likely when you'll see it hit your account, usually in the early morning hours. The silver lining is that having a DDD means your refund has already been approved and processed by the IRS! That's the hardest part done. Now it's just the waiting game. A few things that helped me when I was in a similar situation: • Stop checking your account every 3 hours - set up mobile alerts instead so your bank will notify you when it hits • The deposit typically posts between midnight and 6am on your DDD • Use this week to handle other apartment prep stuff - utility setup, address changes, etc. I know those 7 days feel like an eternity, but your money is coming! Try to stay busy with wedding thank-you notes or apartment planning. You've got this! 💪

This is such a helpful thread! I'm a CPA who works with a lot of small partnerships, and I see this confusion about Form 8825 and Form 1065 line 16 constantly. A few additional points that might help: 1. Make sure you're using the correct depreciation method for each asset type. Most residential rental property uses straight-line over 27.5 years, but some improvements might qualify for different recovery periods. 2. For your roof and HVAC improvements - these are definitely capital improvements that need to be depreciated separately. The roof would typically follow the same 27.5-year schedule as residential rental property, but HVAC systems often qualify for 15-year depreciation. 3. Don't forget about the mid-month convention for real estate - depreciation starts in the middle of the month the property was placed in service, regardless of the actual date. 4. Keep detailed records of when each improvement was completed and placed in service. The IRS is particularly strict about depreciation start dates. One thing I always tell my clients is to create a depreciation schedule spreadsheet that tracks each property and improvement separately. This makes it much easier to complete Form 4562 and ensures consistency between Form 8825 and Form 1065. If you're planning to continue doing your own returns, investing in proper fixed asset tracking software (like some mentioned here) really pays off in the long run. The initial setup takes time, but it prevents a lot of headaches later!

Just wanted to add something that might help with the Form 4562 requirement that several people mentioned. When you're preparing Form 4562 for your partnership, make sure to complete Part III (MACRS Depreciation) for your rental properties and improvements. The key sections you'll need are: - Line 19a-c for your 27.5-year residential rental property (buildings) - Line 19d for any 39-year nonresidential property if applicable - Lines 17-18 for any shorter recovery period assets (like certain improvements) One thing that trips up a lot of people is that you need to list each individual asset or group of similar assets separately on Form 4562, not just lump everything together. So your new roof and HVAC system should each be listed as separate line items with their respective placed-in-service dates and costs. Also, don't forget that the totals from Form 4562 should tie to both your Form 8825 line 18 AND your Form 1065 line 16 (assuming you only have real estate assets as discussed earlier). If those numbers don't match, you know there's an error somewhere in your calculations. The Form 4562 instructions are actually pretty detailed if you need help with the specific lines - they include examples for rental property that can be really helpful for first-time filers.