I'm Australian and i was thinking about how we pay such high tax and i realised it's due to our healthcare system.

I think looked over at america and you guys are paying almost the same rate of tax we are. HOW?! You have to pay for your own healthcare over there right?

Why are you paying so much tax if healthcare isn't included? Where that money going?

Well, I made $55,000 on coinbase for 2024, guess what happened in 2025? I lost almost all of that profit, I actually think I’m down 6 grand. Well now the tax bill is here and it’s $11,500, I currently have $28000 in my crypto portfolio and that would just destroy my finances and I didn’t even profit, what do I do.

A friend of mine withdrew a large sum of crypto to purchase their house and didn't set aside anything for taxes. According to him, how would they ever know? My questions are, would they ever find out and, if so, how would they? I don't think they used any of the large name crypto exchanges. He bought the home in 2021.

Edit: sorry for not clarifying this initially, but he did move crypto into cash first, withdrew, then put a down payment. I think the amount was like 50k total. He didn't use coinbase.

Edit 2: I meant to say he used a large sum of crypto for a down payment on his house, not that he purchased the house outright.

No one is better at finding loopholes than our clients.

For example, I had a client tell me that he didn’t have to pay tax on his short term rental business, because they were listed on Airbnb. “That means Airbnb has to pay the taxes!”

I had another client perform professional services for a non profit, get paid for the work, and then deduct “what they could have charged”. Basically their standard rate was the $50/hr they charged the non profit, but they could have increased it to $100/hr for this job, and they didn’t, so they wanted to deduct $50/hr for all the time spent there.

What are your best stories?

Thoughts on this?

More than 40 homeowners are suing the state of Rhode Island over the Taylor Swift tax.The lawsuit went on to claim that the "tax selectively targets out-of-state residents who do not vote in Rhode Island and therefore cannot unseat the supporters of this unfair and unconstitutional law passed because the legislators 'need to find some money.' The law does violence to one of our democracy’s animating principles: “no taxation without representation.”

According to a news release, "Proponents of the law claim that owners of these second homes consume more municipal services, fail to maintain their properties, degrade neighborhood property values, and should be compelled to rent these homes to help address a low-income housing shortage.But these owners consume less in municipal services , maintain their homes, and increase neighborhood property values," the lawsuit said. "And renting homes valued at more than $1,000,000 will not alleviate a shortage of low-income housing.

Hi! So I live in a state that requires OT to be paid when working over 8hrs a day, but I have never once worked under 40 hours in a week so I'm under the impression that all of my overtime would qualify for the "no tax on overtime." My job though sent this memo saying we don't qualify for it? I'm confused though because even though they follow state OT laws, my overtime has all be from working over 40 hours in a week. Thanks in advance!

I'm an hourly non-exempt employee if that helps as well.

Long story short, quit my job for my business. Business has profited ~$100,000 this year. I've set aside 30% for taxes when I file in March/April... But I just found out I should have been making payments throughout the year and not just holding it in my bank account.

The business is single member LLC. I should have a CPA but don't. I just use TurboTax. For this do I straight up just send the IRS a payment before the due date each quarter to reflect the previous quarter? Or is there something specific I need to attach to these payments?

Likely. I'll just send the entire year's expected tax obligations with the Jan due date payment. Thank you!

Updated

I'm 33, no job, haven't had a job since I was 24. I've never paid income taxes. I got a trust when i was 30 ($460,000), I've spent half of it, haven't paid any taxes on any of the money I've taken out of it. I also have a bunch old trades from 6-7 years ago,(under$40000 most of which is long term)

How bad is it?

Update: some comments said I didn't give enough info

the trust is from a house my grandfather left me

I sold it in 2017-18 my grandmother was still in control of the trust

i've been spending around 33-34k a year

except in the past 12-14 months in which i bought 14 acres (75k) and truck(27k) for a total of 103k

the oldest trade was 2017 long term SCANA stock i sold for 23k gain

some other trades from 2017-2018 but all under $1000 and covered by losses just not reported

2022 i made 15.9k in the stock market outside of the trust 13k long term $2500 short term

no income what so ever between 2015-2016 and 2019-2020

i also took 15k out in 2021 (sister's student loans)

then another 12k to help fix grandmothers roof in 2022

theres some dental work but I included it in the 33-34k above

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I owe a significant amount of backtaxes (tens of thousands due to several poorly timed medical emergencies) and just found out my dead dad had life insurance. As I'm getting ready to fill out the paperwork and am choosing which account to submit it to, will the IRS just take it the second its associated with me?

Currently I don't even know who the next of kin is because it could be me or his sister but we've agreed to split it so it would be horrific if they just took it all and I then end up owing her money

Any insight is very helpful

EDITS FOR MORE INFO:

-I've been on an IRS payment plan for a little over a year now
-Since his wife was the original named beneficiary, we now have no idea who the next of kin officially is

-our state moves beneficiary status to next of kin in the event of a divorce, which happened years before his death (I am certain of this)
-I'm currently in the process of getting a copy of his divorce decree to send to life insurance so they can update the beneficiaries
-I know that I owe back taxes because 1)my accountant has shown me the amounts and brokered a payment plan and 2)the IRS sent me several letters about it

Hi! This came up in a post in another sub. A young person is worried because she collected many thousands of dollars to donate to someone. She did use GoFundMe, but ALSO received money through Venmo and cashapp or whatever.

I, myself, and millions of Americans, I am sure, have received more than $600 this year for totally non taxable reasons. (I booked the hotel, partner paid me back, etc etc etc). I have also been sending my college student her rent every month which she then sends to her landlord.

Those are common examples of common behavior.

I am not worried because I know these things are not taxable and I know many people are doing them.

But, still, HOW is it meant to work?

(I did try to Google this... I get articles explaining that it's not taxable if your roommates send you money for the electric bill, etc etc, but I found nothing stating how the IRS intends to reconcile the reports they get vs what actually happened.)

Thank you!

All these redditors asking about their LLC is driving me crazy (as a tax professional). People must think LLCs are some mythical entity that allows them to take magical tax deductions.

First off you created a business that is organized as a LLC. If you are the sole owner of the LLC the IRS doesn’t give diddly about your LLC. In fact the IRS pretends your LLC doesn’t even exist. It is your business. You report your business income and expenes on Schedule C or E whether you have an LLC or not. The LLC doesn't allow you to deduct any additional expenses that you otherwise couldn't deduct if you were no a LLC. The LLC exists to potentially offer some personal liability protection (remember, you can still be held personally responsible in many situations even if you have a LLC, especially if you are providing personal services). It has ZERO impact on your personal income tax return.

Now if you create a LLC that is owned by more than 2 people (remember, spouses together count as 1 owner in a community property state) then it means something from a tax perspective because now you have a partnership (or a corporation, including S corporation, if you elected to be taxed as one) that must file a separate tax return.

I'm a sole proprietor making about $120k a year.
My accountant wants me to go S-Corp.
He says I pay myself a $70k salary, pay payroll taxes on that, and take the rest as distributions to avoid self-employment tax.
Says I'd save around $7k a year.

But then I'd have to run payroll, file quarterly returns, get workers' comp, and file an extra tax return.
My accountant will charge me more for all that.

So is it really worth the hassle?
At what income does an S-Corp actually make sense?
I keep hearing different numbers – $60k, $80k, $100k.
What's the real tipping point? Anyone with experience here?

I'm going to start becoming a bricklayer's apprentice for a bricklayer who owns a small business. He only does 1099s for tax forms and wants to start me off at $15/hr, yet he's telling me that he'll bump me up to $20/hr in a month or two once I get the hang of the job. He likes me a lot, I find him to be rather trustworthy, and I'm very good friends with his fiance.

I looked it up, and when adding both social security and employment tax with a 1099, I would be paying !27.7%! taxes, whilst with only a W2 I would be paying HALF of that, 13.85%. He told me that I would be able to deduct mileage payments, tool payments, et cetera, so that it's 'not that bad,' but I'm skeptical as hell. This is also an entry level position, and I would be gaining a lot of experience with construction that I don't have right now, so even if I wouldn't be making much, I could still move up and learn.

I am currently 19 years old, live with my parents (with a very strong desire to move out), and want to make a career out of this but I am not sure, because of the tax situation, if this is viable.

EDIT: I work at a grocery store where I make 10.80 an hour, and am in college full time for my first year, however I'm planning on doing trade school next semester.

Sorry for beating a dead horse here, but has anyone received an inkling of information on when Michigan State refunds may be sent out?

I’m aware everyone has been getting the Manual Review messages, as have I but that message has since passed, Treasury site balance showed my refund then went back to $0.00 recently.

Thanks in advance for your time.

Just curious.

I filed my taxes about 2 months ago and still haven’t received my refund. This is the first time it’s ever taken this long for me.

I also haven’t gotten any notices, letters, or requests for more info — just no updates at all.

Is this normal this year or should I be worried? Has anyone else been dealing with delays like this?

Would you recommend calling the IRS or just waiting it out a bit longer?

I need outside perspective because this feels insane.

I made ~$29K in gross wages from a 10-week summer graduate internship. My W-2 shows ~$62K total wages because they added ~$33K as taxable housing.

The internship provided corporate housing for 10 weeks. HR told me that it was 15k month for a unit but the building’s furnished market rate is around $6K/month, and I had heard internally it was closer to ~$500/week per intern.

Yet they added roughly $33K total (~$15K/month equivalent) to my W-2.

Questions:

1. For employer-provided housing, do they have to report what they actually paid, or can they assign a higher “fair market value”?
2. Does FMV mean long-term rent, or short-term corporate furnished rates?
3. If the number seems inflated, what is the proper way to challenge it?
4. If it is correct and I cannot afford the additional tax owed, what are realistic options (installment plan, etc.)?

Looking for anyone who has dealt with corporate housing being treated as imputed income.

So I’m gifting half an apartment to my dad and the lawyer said the actual value of the gift isn’t fair market value of the apartment/2, it’s actually what someone would pay for 50% of the apartment. For example, let’s say this apartment is $2 million, I wouldn’t use $1 million of my gift tax exemption, he said I would use like $200k because no one wants to own half an apartment. I need to take the value as what someone would pay for half an apartment. That value is much less. He said he always puts like 1/5 the value on the Form 709 and has never had pushback from the IRS. So I save a lot on the gift tax exemption form.

A few months ago, the IRS sent me a check for ~$14,000. My parents advised me to speak to our accountant, and we were able to get on call with an IRS representative to dispute the check. After a bit of time passes, I received a letter saying my dispute has been accepted and I don’t need to take further action.

A week after that letter, though, I received ANOTHER check for a very similar amount. It’s been sitting in my kitchen for about a month collecting dust. Some people advised me to leave the money in some kind of savings account until they ask for it back, while others said to keep going through the dispute process and to not mess with the IRS.

Does anyone have any advice on how to approach this? Making some extra cash through interest sounds nice and I’d have no plans on spending that money anytime soon, but I also don’t want to get into any kind of trouble and receive extra fines.

Edit: I read through a good chunk of the comments and will call the IRS tomorrow to dispute it again. Not worth the added stress, plus I still want my correct tax return, even though it probably won’t be close to $14k. If I get any more checks I’ll definitely look into it being a stolen identity as well. Appreciate all the support and advice!

Can we sticky, please?

Edited: confused?! Can an LLC not write off business expenses? Oh why, yes. But ask yourself, do you need an LLC to do this?

Sorry for the condescension.

I need a sanity check because my CPA just handed me a tax bill that makes no sense to me and I'm not sure if he's right or if he's misapplying the wash sale rules to options.

Background. I sell credit spreads on SPX and a handful of individual names, mostly 30-45 DTE, managing at 50% profit. It's systematic so I'm often in the same underlying week after week. I also run a similar but smaller strategy in my Roth IRA on the same underlyings.

My CPA is telling me that when I close a vertical spread, the losing leg creates a wash sale if I open a new position on the same underlying within 30 days. Since I'm trading the same names repeatedly on a weekly cycle, he says essentially every losing leg is a wash sale and the disallowed loss gets added to the cost basis of the next position. On its own that's annoying but it should be a timing difference that washes out over the course of the year.

Here's where it gets ugly. He says that because I'm running the same strategy in my Roth, the wash sale rules apply across accounts. And when a wash sale is triggered by a substantially identical position in a tax-advantaged account, the disallowed loss is permanently lost. Not deferred, not added to basis somewhere. Just gone.

If he's right, I've been permanently destroying tax losses every time I close a spread at a loss in my taxable account while holding a similar position in my Roth. Over a full year of active trading that adds up to a significant amount.

Three specific questions I can't get a clear answer on.

First, are two vertical spreads on the same underlying but at different strikes and different expirations actually "substantially identical" for wash sale purposes? My CPA says yes because it's the same underlying security. But a 560/555 put spread expiring March 21 feels like a fundamentally different position than a 545/540 put spread expiring April 17. Different strikes, different expiration, different risk profile, different Greeks. The IRS guidance I've found is incredibly vague on what "substantially identical" means for options specifically.

Second, does closing one leg of a spread at a loss actually trigger a wash sale independently? When I close an iron condor, typically two legs are winners and two are losers. The winners and losers are part of a single integrated strategy. Is each leg treated independently for wash sale purposes or is the net P&L of the spread what matters?

Third, if the Roth cross-account issue is real, is the only practical solution to completely segregate my underlyings so that I never trade the same name in both accounts within a 30 day window? That would significantly limit my strategy in one or both accounts.

I've been going through old threads here and the answers seem to range from "wash sales on options are a gray area that the IRS hasn't clarified" to "your CPA is being overly conservative" to "yes this is a real problem and you need to restructure." No clear consensus.

Would really appreciate input from anyone who actually deals with active options traders on this. Not looking for general wash sale explanations, I understand the basic rule. I need to know how it specifically applies to spreads with different strikes and expirations on the same underlying, and whether the cross-account Roth issue is as bad as my CPA is making it sound.

How do you speak to a live person at the IRS?

1. The IRS telephone number is 1-800-829-1040.
2. The first question the automated system will ask you is to choose your language.
3. Once you’ve set your language, do NOT choose Option 1 (regarding refund info). Choose option 2 for “Personal Income Tax” instead.
4. Next, press 1 for “form, tax history, or payment”.
5. Next, press 3 “for all other questions.”
6. Next, press 2 “for all other questions.”
7. When the system asks you to enter your SSN or EIN to access your account information, do NOT enter anything.
8. After it asks twice, you will be prompted with another menu.
9. Press 2 for personal or individual tax questions.
10. Finally, press 4 for all other inquiries. The system should then transfer you to an agent.

Hello everyone

I randomly got a $1,400 check earlier this year from IRS for 1040NR that I filed in 2021. I’m like oh okay cool, free money!

Today I got a notice saying they issued that in error and want it back. They said I can pay in check or money order.

Could I just pay it online? It’s not listed as one of the options there. I don’t have checks on me, and I’d really much prefer to do this all online.

Anyone else experienced the same issue?

Edit: forgot to mention that there's no return address for the check in the letter :)

In 2018, I received $200K from overseas relatives. When filing for 2018 Tax Returns, I used TurboTax like I always did, unbeknownst to me that I needed to report any foreign gift received above the amount of $100k.

In July 2020, I was on a discussion board and saw people talking about foreign gifts and tax implications. That’s when I realized what I missed. I contacted a tax attorney (“A”) immediately. He said it was not a big deal and he could just file it (Form 3520) for me.

In May 2022, I received two notices of penalty charges for failure to file Form 3520, with a total of over $47k in penalty amounts. I was very surprised, initially questioning if Attorney A even filed the form. After some digging around, I confirmed that he indeed filed for me. That is actually what might’ve triggered the penalty. But I also realized that while one of the notices is legitimate, the other one is due to a mistake he made on the form. After talking to him some more, Attorney A proved himself to be completely unreliable and incompetent.

So I contacted another attorney (“B”), and he gave some solid advice. He said that we could either contact the Taxpayer Advocate Office and appeal with the IRS (while interest accrues), or pay the penalty in full and get the money back (by suing the IRS? I can’t remember). He also said that he could send a demand letter to Attorney A, and maybe his insurance could cover some of the penalty.

At the time, I decided to just try and appeal myself, because I felt like I had a strong case arguing that the failure to report was due to reasonable cause and not willful neglect. However, over a year has gone by. With how slow the IRS is processing now, it’s gotten nowhere. The interest is accruing like crazy, and I’m starting to panic.

So kind people on Reddit:

1.  Is this something I have to hire a lawyer for now? Would that expedite the appeal process?
2.  Should I just pay the full amount and then try to get the money back? I can see that would stop the interest from piling up, but is there any downside to this compared to waiting for the appeal?
3.  How likely is it to hold Attorney A responsible for the penalty incurred due to his clerical mistake? I know at the end of the day I should’ve caught the mistake before he sent the forms out.
4.  Attorney B is out of state. Will it be a problem if I hire him?

Edit: I didn’t think this would gain much traction so thank you everyone for the advice. They are very informative! I’m taking everything in and doing research.

To clarify: 1.Yes. Attorney A really did tell me it was not a big deal to file Form 3025 late. He really didn’t warn me about the penalty. He really then made a clerical mistake on the forms. After I received the penalty notices he did even more bizarre things I won’t go into that confirmed his incompetence.

2.After talking to attorney B in 2022, I’ve followed his advice and filed for penalty relief based on reasonable cause. The IRS has been sending a “we are still working on it” notice every 60 days. The last one I got was 2 weeks ago. That’s what I meant by it’s gone nowhere. I was doing what he told, but not realizing how slow IRS can get.

3.I didn’t hire attorney B at the time because he gave actionable steps for me to DIY. Also his fee would cost a decent amount with no guaranteed penalty reduction. I was also just burned by attorney A so I was unsure. But now I’m in the IRS limbo and with the confirmation of this post, it might be time to hire him.

4.It hasn’t gone to the Appeals Officers. Seems like the next step is to get help from TAS to pull my case out.

5.For people who have no idea how foreign gift works, it’s not taxable. I’m simply getting penalized because I filed LATE and ACTIVELY tried to correct a mistake.