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I'm seeing that language in   https://www.irs.gov/pub/irs-pdf/p5977.pdf   which is referenced at the bottom of the IRS page explaining the Residential Clean Energy Credit https://www.irs.gov/credits-deductions/residen[product key removed]y-credit 

You’ve got it mostly right. As a GP in a non-integrated oil & gas venture, your IDC deduction generally isn’t an AMT add-back—that exception is in §57(a)(2)(E). The catch is the 40% limitation: you can only reduce AMTI by up to 40% of your pre-IDC AMTI. In practice, this means you usually keep the bulk of the IDC deduction, but if the IDC is very large relative to your income, some gets added back for AMT. TurboTax can handle the math, but it often misclassifies O&G losses as passive or doesn’t flow the exception properly. If you go this route, you’ll likely need the desktop version in forms mode (not the online one) or a CPA who’s comfortable with oil & gas K-1s. So yes, the IDC deduction still works really well even under AMT - you just need to be aware of the 40% cap and make sure the software is set up correctly.

You’re right - under IRC §263(c), intangible drilling costs (IDCs) for a general partner are usually treated as active losses, not passive. TurboTax has a history of defaulting them to passive, which is a known limitation. The fix is to override the K-1 entry so the IDC shows as a non-passive loss on Schedule E (Part II, column H). Unfortunately, you can’t do that in the online version - you’ll need TurboTax Desktop (Forms mode) or a tax pro to reclassify it correctly. IDC gives you a big upfront tax break, and with Fieldvest you can find vetted operators so you’re not guessing who to invest with.

@user17569064898 wrote: "File Form 5695, Residential Energy Credits when you file your tax return for year in which your residential energy property was put in service.   I'm curious where you are seeing the sentence.   At any rate, the law says "when the original installation of the item is completed".  My interpretation of that is that the credit applies when it is installed, regardless if the utility company has approved it or not.

Yep, you’re seeing a real gap in TurboTax. California killed the IDC deduction starting 2024, but TurboTax Premier online hasn’t updated the logic - so it still flows the federal IDC loss straight into the CA return. The fix is manual: on Schedule CA (540) you need to add the IDC back to income so it doesn’t reduce your CA taxable amount. If you’ve already filed, you’ll need to amend. No workaround in the software right now other than doing the manual adjustment or having a tax pro prep the CA return. The IDC deduction still works great at the federal level, giving you a big first-year write-off against W2 income.

It's 2025 and the IRS just told me they never received MY W-2, although I did and put it in my TT filing.  They told me to have my employer send the W-2 to the Social Security Administration as they collected such information and forwarded it to the IRS.   Does this make sense?  What is the address of the Social Security Administration that I should use, or a phone number?  

Basis rules mean you can’t deduct more than your outside basis, and the order matters. You add income first, then subtract losses like IDC, and only then apply depletion - but depletion is capped at whatever basis you have left. In your numbers: $532 income – $410 IDC = $122 left. You can only use $122 of depletion this year, and the extra $635 gets suspended/carryforward. So no, you can’t take the full IDC and full depletion if it pushes basis below zero.

No way to use IDC against California state taxes anymore - starting 2024 the state made you add it back on Schedule CA. The good news is you still get the full federal deduction, which is usually the bigger lever for high earners. For state, you’ll need other moves (max retirement, muni bonds, maybe entity structuring if you open a business). So the benefit is still very real at the federal level, but for high earners in California, you just can’t use IDC to lower your California state taxes anymore.

Hi Cindy, it looks like the tax reform custom scenario calculator is “coming soon”, according to the website. Any idea when “soon” might be? The scenarios offered in the article don’t fit me all, and I’m chomping at the bit to see where my taxes are headed. Thanks!

With pure W2 it’s tough - outside of maxing 401k/HSA/mega backdoor Roth and looking at state muni bonds, there aren’t many big levers. For high earners, one of the few real offsets is direct oil & gas investing. The IRS allows you to deduct intangible drilling costs (70–80% of your investment) against W2 income in year one. That can be a huge lever if you’re writing big checks to the IRS. The trade-off is risk—drilling doesn’t always hit—so it’s critical to work with a qualified, trustworthy operator. Platforms like Fieldvest exist to vet operators and match accredited investors with solid projects so you’re not flying blind. If you want something safer, stick to retirement space and tax-efficient investing. If you want bigger deductions, energy is one of the few places the tax code still rewards.

I've just learned about the military subtraction for retirement pay. After reviewing my 2024 tax return, I found that the subtraction was not included.  Do I amend my 2024 tax return?  If so, how, or do I include the 2024 subtraction with the 2025 subtraction when submitting the 2025 tax return?

Speaking from experience running a small clothing brand that buys blanks from wholesalers like YouApparel and ShirtSpace: the cleanest way to handle taxes is to treat blank shirts and decorating materials (ink, film, pretreat, packaging) as inventory that flows through Cost of Goods Sold (COGS), not general office supplies. What works for me: • Track inventory with a simple SKU list by style, color, size, and unit cost. Keep a running log of materials used per job. Do a quick count monthly and a full count at year end. • On Schedule C, I report all sales as gross receipts and compute COGS as: beginning inventory + purchases + direct materials and production labor − ending inventory. My owner time is not deductible as labor. Mailers and boxes used to ship finished goods go in COGS. • I do not expense everything when purchased. If I buy 500 blanks in December and only print or sell 200, only the cost of those 200 hits COGS this year; the rest is ending inventory. If you qualify for the small business inventory simplification (Section 471(c)), you can treat inventory as materials and supplies or follow your book method. In practice, you still deduct when items are used or sold, not the day you buy them, so you still need basic counts. Two tips: 1) Job costing beats guesses. Attach a quick job sheet to each order showing blanks pulled, ink or film used, and press time. It helps pricing, reorders, and taxes. 2) Sales tax is separate. Use a resale certificate when buying blanks and collect or remit sales tax in states where you have nexus. Bottom line: treat blanks and production materials as inventory/COGS, keep consistent records, and have a CPA confirm your method.

Any and every time I’ve talked to someone at the irs they give me the run around.  honestly I think my wife knows more about taxes and stuff than they do. She had to explain one of the new tax laws to one of the agents…    I would just like to receive some kind of communication, it says my refund was accepted, than processing, and I even had a code that you see on your transcript before it’s deposited now nothing. 

Issue not resolved yet. Didn't get reply on X(-formerly twitter).   The product is not working as expected.  Possible to return turbo tax and issue me a refund? I have already wasted enough of my time.