Omg yes! I thought I was just being dense but the instructions are so much worse this year. I actually called my tax preparer friend to explain the Cash App reporting requirements and she was like "yeah the IRS made everything more confusing this year for some reason.

Right?! I'm glad it's not just me! I think they rewrote a bunch of the instructions to account for the new tax law changes, but in the process they made simple things like understanding your standard deduction way more complicated than necessary. I miss the clear flowcharts they used to have. I think the Cash App reporting is especially confusing because they don't clearly explain the difference between personal transfers and business income.

Yes, they do report to the IRS, but there's a threshold. For 2024 taxes (filed in 2025), you should receive a 1099-K if you received more than $5,000 in payments. But even if you don't receive a form, you're still legally required to report all income, even if it's below the reporting threshold.

I did check both parts, and all of our kids were qualifying children under 17, so we didn't have any "other dependents" to claim. And we didn't receive any advance payments in 2021 that would affect the 2022 return - we actually opted out of those. What's confusing me is that with 4 kids, we should have gotten the full $8,000 ($2,000 × 4), but when I look at the actual credit amount on our Form 1040, it's significantly less. I'm wondering if maybe our tax software or preparer made a calculation error on Form 8812.

In that case, I would recommend looking specifically at the calculations on Form 8812, particularly around the refundable portion. For 2022, the refundable portion was limited to 15% of your earned income above $2,500. So if somehow your "earned income" was calculated incorrectly (which is different from AGI), that could limit the refundable portion. Another thing to check is if you had any other non-refundable credits that used up your tax liability, potentially limiting how much of the non-refundable portion of the CTC you could use.

I used TurboTax to amend my 2022 return specifically for Form 8812 issues. It was pretty simple - they walk you through which forms need to be changed and calculate everything for you. Just make sure you have a copy of your original return handy because you'll need to enter some of the original information first before making changes.

Thank you so much for this explanation! So basically I should just bypass the depreciation question in TaxAct somehow? Would selecting "straight line" be the safest if I have to choose something, or should I go back and re-enter it differently to avoid that question entirely? The truck is 100% business use if that matters for the inclusion amount you mentioned.

If TaxAct won't let you proceed without selecting a depreciation method, I'd recommend going back and re-entering the vehicle information but categorize it as a leased vehicle expense rather than an asset to be depreciated. Most tax software has a specific section for business vehicle expenses where you can indicate it's leased rather than owned. If you absolutely have to choose a depreciation method as a workaround, straight-line would be the most conservative choice, but it's not technically correct since you don't depreciate leased assets. The 100% business use is great - it means you can deduct 100% of the lease payments (minus any inclusion amount). The inclusion amount is based on the fair market value of the vehicle and lease term - for a 3-year lease on a heavy vehicle, it's often minimal.

Does this same "no depreciation for leases" rule apply to regular lighter vehicles too? I've been doing it wrong for years if so...

I thought it was just 4 years total regardless of what "year" you're in academically? My advisor told me as long as you haven't claimed it 4 times already you can still get it.

Your advisor is partially right, but there's more to it. You can claim AOTC for up to 4 tax years, but there's also a requirement that you must be enrolled in one of the first 4 years of post-secondary education (what the IRS considers your freshman through senior years). If you're in what would academically be considered your 5th year or greater (like if you're working on a second bachelor's or have been in school longer than the typical 4-year program), you generally wouldn't qualify regardless of how many times you've claimed it before. The Lifetime Learning Credit doesn't have this restriction, which is why it's available for graduate students and lifelong learners.

How do the 1098-T forms work with this? Mine always seems to have different amounts than what I actually paid because of timing of the payments vs when classes start.

1 Does the 5-year compliance thing mean I can't have ANY issues with taxes for 5 years? What if I file on time but can't pay everything that year? Would they bring back all my old debt too??

5 The compliance requirement means you need to file all required returns on time and pay any new tax obligations when they're due. If you can't pay a new tax bill in full, you need to work with the IRS immediately on a payment arrangement. If you violate the terms, then yes, the IRS can potentially revoke your OIC and reinstate the original tax debt, minus whatever payments you've made. They don't do this for minor issues, but it's a serious consideration - you're essentially promising to be a model taxpayer for those 5 years.

19 I used one of those companies and it was a complete waste of money. Paid them $4,000 up front and all they did was put me on an installment plan I could have set up myself for free on the IRS website. They promised they'd get me an OIC but after taking my money they said I "didn't qualify" - something they should have known from the beginning.

12 Wow thanks for the warning! Sounds like these companies are just preying on desperate people. I'll steer clear and either try to handle it myself or find a reputable local tax professional instead.