That's a good point I hadn't considered. Do you know if state tax agencies are generally easier to deal with than the IRS? And do they also have programs like the Fresh Start or Offer in Compromise?

In my experience, state tax agencies can actually be easier to deal with than the IRS. The phone wait times are usually shorter, and you can often make an in-person appointment at a local office. Many states do have their own versions of settlement programs similar to the IRS Offer in Compromise, though they might call them different things. For example, California has an "Offer in Compromise" program that's similar to the IRS version, while New York calls theirs an "Offer in Settlement." The qualification requirements and terms can vary significantly by state, so definitely look into your specific state's options.

Did the attorney deal with both federal and state taxes? And how did they handle years where you didn't have documents?

Wait, seriously? I thought any Energy Star certified door would qualify. Is there a way to check if my door meets this "Most Efficient" standard after the fact? The packaging is long gone.

Actually I need to correct myself - for exterior doors, you're right that Energy Star certification is still sufficient. The "Most Efficient" requirement applies to other categories like water heaters and HVAC. What did change is the maximum credit amount - it's now 30% of costs up to $250 for a single door (or up to $500 total if you replaced multiple doors). You should be able to find the Energy Star certification information on any documentation that came with the door or by looking up the model number on the manufacturer's website.

I got mine processed without any delay. Make sure you filled out Form 5695 correctly - that's where you calculate the credit. Also, if you claimed other credits like solar or EV, those sometimes get additional scrutiny.

I didn't even think about state taxes! I was in Illinois for college. Do you know if they're more aggressive than the IRS about pursuing old unfiled returns?

Illinois actually follows the federal statutes of limitations pretty closely for most tax matters, generally 3 years from filing or due date (whichever is later). However, like the IRS, they technically have no time limit for unfiled returns. That said, Illinois typically receives information from the IRS and educational institutions, so if the IRS hasn't flagged your account, Illinois likely hasn't either. State tax authorities usually have even fewer resources than the IRS for pursuing older, smaller cases. If you haven't received notices from Illinois by now, it's even less likely they'll pursue this than the federal government would.

Yes, he should check the box indicating that someone can claim him as a dependent when filing his own return. This is important because it affects his standard deduction amount and eligibility for certain credits. Being claimed as a dependent doesn't eliminate his obligation to file his own return if he meets the filing requirements (which for 2024, for dependents with only earned income, would be income exceeding $14,600). He'll need to report his taxable scholarship income (the portion exceeding qualified education expenses) as income on his return.

This is a good point I hadn't considered! My last US address was in Florida before moving to Germany. I still have my Florida driver's license though it's expired now. Would I still need to worry about state tax issues even though Florida doesn't have state income tax?

You're in a good position having your last residence in Florida since they don't have state income tax. States without income tax (like Florida, Texas, Nevada, etc.) don't generally pursue former residents for tax purposes. The bigger concern is for people from high-tax states like California or New York, where state tax authorities sometimes argue that you never truly "left" if you maintain certain connections. In your case with Florida, as long as you're filing your federal returns properly, you shouldn't have to worry about state tax complications.

This is so true! I got absolutely destroyed on taxes because I had UK investment funds that were classified as PFICs. The forms are ridiculously complicated (Form 8621) and the taxation is punitive compared to US-based investments. I ended up selling all my foreign funds and only investing through US brokerages now.

How strict is the IRS about the 750+ hour requirement for real estate professionals? I work full-time in property management (40hrs/week) but I'm concerned about documenting all those hours precisely. Do they require minute-by-minute logs?

The IRS is quite strict about the 750+ hour requirement, and the burden of proof is on you if audited. While you don't need minute-by-minute logs, you do need contemporaneous documentation that can substantiate your time - calendar entries, appointment books, logs, or similar records made regularly at or near the time of the activity. Working full-time in property management should easily meet the 750+ hour threshold (that's only about 14.5 hours weekly), but you'll need to ensure you're tracking which hours are spent on which properties and activities. The IRS has successfully challenged many real estate professional claims in tax court when taxpayers couldn't provide adequate documentation of their time. Be especially careful if you have a separate non-real estate job, as you'll need to show real estate activities exceed your time in that other job.

When you dispose of a passive activity in a fully taxable transaction, your suspended losses from that specific activity are freed up and can be used in this order: 1. First against any gain from disposing of that specific passive activity 2. Then against net income/gain from all other passive activities 3. Any remaining losses can offset your non-passive income So yes, you can use those previously suspended losses against any passive income, and potentially against non-passive income too if there's any left after offsetting the gain on sale.