Has anyone tried using the IRS's own free file fillable forms to claim the Lifetime Learning Credit? I'm thinking about doing that instead of paying TurboTax.

I totally feel your pain with TurboTax's sneaky upgrade tactics! I went through the exact same thing last year and it's so frustrating when you're already trying to save money as a student. Here's what worked for me: I ended up switching to FreeTaxUSA which includes the Lifetime Learning Credit in their free federal filing. The interface isn't as polished as TurboTax but it gets the job done and saved me that $49 upgrade fee. They do charge like $15 for state filing, but that's still way less than TurboTax's upgrade. If you want to stick with completely free options, definitely check out the IRS Free File program like Taylor mentioned. Just make sure to go through IRS.gov directly - don't Google the tax companies because they'll redirect you to their paid versions instead of the actual free file versions. One tip: before you abandon your TurboTax progress, take screenshots of all your entered information or print the review pages. That way if you switch services, you'll have all your data organized and won't feel like you're starting from scratch. The Lifetime Learning Credit is worth up to $2,000, so it's definitely worth the effort to avoid paying TurboTax's upgrade fee!

Pro tip: If you're having trouble reaching the IRS, try contacting your local Taxpayer Advocate Service. They can sometimes help push things through faster.

Just want to add another option that worked for me - you can also try updating your direct deposit info through the "Where's My Refund" tool on the IRS website. It's not always available depending on where your return is in processing, but if the option shows up, it's way easier than calling. I was able to change mine online without having to deal with phone wait times at all. Worth checking before you spend hours on hold!

Just a warning - my parents set up an irrevocable trust in 2014 and we've had nothing but headaches. The tax filing requirements are a NIGHTMARE. We have to file a separate trust tax return (Form 1041) every year which costs about $900 with our accountant. Plus the trustee fees are eating into the assets. And now my mom needs some of the money for a special medical treatment but we can't access it because, surprise, it's irrevocable! Our attorney didn't emphasize enough how permanent this decision would be. Consider a revocable trust that converts to irrevocable upon death instead. Much more flexibility during lifetime.

This is such a timely question for me! I'm in a similar situation with my aging parents and have been wrestling with the same decisions. One thing I learned from my estate planning attorney is that the key advantage of an irrevocable trust isn't just the estate tax savings - it's also the "valuation discount" you can get. If your parents are transferring business interests or real estate (like that vacation property), they might be able to claim a discount on the value for gift tax purposes since the beneficiaries won't have immediate control. For your situation with $650K in total assets, you're definitely in the range where an irrevocable trust could make sense, especially with the vacation property appreciation potential. But I'd strongly recommend getting a second opinion from an estate planning attorney who specializes in irrevocable trusts before making the decision. The flexibility concern is real - once it's done, it's done. Some attorneys can build in limited flexibility through trust protectors or distribution standards, but you need to plan for worst-case scenarios upfront. Have you considered what happens if your parents need long-term care or have other major expenses?

As someone who works with international tax compliance, I'd strongly recommend getting professional help before any major windfall. The interaction between US and Mexican tax systems on lottery winnings can be complex. One key point that hasn't been fully addressed - Mexican lottery winnings are typically subject to a 21% withholding tax, but this may not fully cover your US tax obligation depending on your tax bracket. The US taxes lottery winnings as ordinary income, not capital gains, so if you're in a higher tax bracket, you could owe additional US taxes even after claiming the foreign tax credit. Also, don't forget about estimated tax payments. If you win a substantial amount, you'll likely need to make quarterly estimated payments to the IRS for the tax year of the winnings to avoid underpayment penalties. Living abroad doesn't exempt you from these requirements. The FBAR reporting mentioned earlier is crucial too - if lottery winnings push your foreign account balances over $10,000 at any point during the year, you must file FinCEN Form 114 by April 15th (with automatic extension to October 15th).

Just wanted to add another important consideration that I haven't seen mentioned yet - state taxes! Even though you're living in Mexico, if you're still considered a resident of a US state for tax purposes, you might owe state income tax on lottery winnings too. Some states have very aggressive rules about maintaining tax residency even after you move abroad. For example, if you still have a driver's license, voter registration, or property in certain states, they might still consider you a resident for tax purposes. California and New York are particularly notorious for this. On the flip side, some states like Texas, Florida, and Nevada have no state income tax at all, so if you can establish residency there before any big winnings (and it's legitimate), you'd only deal with federal taxes. Given that you mentioned only making $650/month currently, you'd probably qualify for the Foreign Earned Income Exclusion on your regular income, but lottery winnings don't qualify for this exclusion - they're considered "unearned income" and would be fully taxable at both federal and potentially state level. Definitely worth checking your state tax situation as part of your overall planning!

Has anyone actually filled out Form 8606 for a situation like this? I did a backdoor Roth last year with a large traditional IRA balance and honestly had no idea what I was doing on that form. My tax software kept giving me weird warnings about basis calculations.

I'm dealing with a very similar situation and the confusion is real! After reading through all these responses, it seems like the consensus is clear - your financial advisor is correct about the pro-rata rule applying. What really helped me understand this better was realizing that the IRS doesn't care which specific shares or contributions you tell your brokerage to convert. They look at ALL your traditional IRA balances (across all accounts) as one big pool when calculating the taxable portion. The math in your case would be roughly: $7,000 conversion × ($1,300,000 pre-tax ÷ $1,307,000 total) = about $6,965 would be taxable. You'd only get about $35 tax-free from your after-tax contribution. Based on what others have shared here, your best bet might be to see if your current employer's 401k accepts IRA rollovers. If you can move that $1.3M into your 401k, then you could do clean backdoor Roth conversions going forward without any pro-rata complications. I'm definitely going to look into the 401k rollover option for my own situation. Thanks to everyone who shared their experiences - this thread has been incredibly helpful!