Is nobody going to mention that the AOTC can only be claimed for 4 tax years per student? I made this mistake with my older kid and tried to claim it for a 5th year when he took longer to graduate. Got a nasty letter from the IRS and had to pay it back plus interest.

Great question about the AOTC! You're absolutely right that as the parent claiming your daughter as a dependent, you get to claim the AOTC on your return - not her. The fact that the federal loans are in her name doesn't change this at all. Regarding the income limitations you mentioned - they actually ARE factored into the AOTC, but you're right that it's not super obvious on Form 8863. The form assumes you've already determined you're eligible based on income before you even start filling it out. For 2025, the AOTC phases out between $90,000-$100,000 for single filers and $180,000-$200,000 for married filing jointly. If your MAGI is above these thresholds, you can't claim the AOTC at all. One thing to double-check: when calculating your qualified expenses, make sure you reduce the total by any scholarships your daughter received. The IRS requires you to subtract tax-free educational assistance (like scholarships and grants) from the total qualified expenses before calculating the credit. So if her tuition was $10,000, but she got $3,000 in scholarships, you can only use $7,000 of expenses for the AOTC calculation. The good news is that you're in the perfect position to maximize this credit since you have higher income and can use both the refundable and non-refundable portions!

Quick tip for the OP - make sure you're also factoring in any fees you paid when exercising or selling. Those can be added to your basis as well. Every dollar counts when you're trying to reduce the taxable gain!

Just want to add another important consideration - timing of when you actually paid the AMT matters for your basis adjustment. If you exercised ISOs in December 2014 but didn't actually pay the AMT until you filed your return in April 2015, some tax professionals argue the basis adjustment shouldn't apply until the 2015 tax year. This mainly affects people who did cashless exercises or had complex timing situations. For most people who did cash exercises and paid AMT in the same calendar year, it's straightforward. But if there's any timing complexity in your situation, you might want to double-check this detail. Also, keep really good records of everything - copies of your Form 6251 from 2014, your stock option exercise confirmations, and all the supporting calculations. The IRS has been scrutinizing ISO transactions more closely in recent years, so having bulletproof documentation is crucial if you ever get selected for review.

Anyone else notice that FreeTaxUSA sometimes doesn't import all transactions correctly? I had to manually check every single stock sale against my 1099-B because it missed about 10% of my trades when I tried the import function.

Great question! You're right to be cautious about doing things correctly. As others have mentioned, you definitely don't need to mail your 1099-B to the IRS - Fidelity already sent them a copy electronically. Just make sure when you're entering the data into FreeTaxUSA that you double-check all the numbers match exactly what's on your form. Pay special attention to the cost basis - if it shows "basis not reported to IRS" for any transactions, you'll need to make sure you have your own records of what you paid for those shares. With $3,200 in gains, you're well above the threshold where this needs to be reported, but it's not a huge amount that would typically trigger extra scrutiny. The key is just being accurate and consistent with what your broker reported. Good luck with the rest of your filing!

Thanks for all the detailed responses everyone! This discussion has been incredibly helpful in putting my first-time tax filing anxiety into perspective. After reading through all your experiences and advice, I think I've been overthinking this. The statistics about audit risk for simple returns (under 0.5%!) really put things in context. I love the idea of getting a one-time CPA consultation instead of paying for audit defense - that seems like a much smarter use of money since I'd actually learn something and gain confidence in my return accuracy. I'm going to go with FreeTaxUSA (the price difference from TurboTax is significant) and skip the audit defense. Instead, I'll put that money toward building my emergency fund like suggested, and maybe do the CPA review if I'm still feeling unsure after completing my return. Really appreciate everyone sharing their real experiences - it's so much more valuable than just reading marketing materials from the tax companies!

This has been such a thoughtful discussion! As someone who's been filing taxes for about 8 years now, I wanted to add one more perspective that might help first-time filers. The anxiety around making tax mistakes is totally normal, but here's something that helped me early on: the IRS actually sends you a letter if there's a discrepancy on your return, and it's usually not as scary as people think. Most of the time it's just "Hey, we think you forgot to report this income" or "We need documentation for this deduction" - not an immediate penalty situation. I've gotten a couple of these letters over the years for minor things (like forgetting to include a 1099 from a bank account), and each time I just mailed back the requested documentation and that was it. No audit, no drama, just a simple correction process. The combination of using FreeTaxUSA (which is really reliable) plus the CPA review idea sounds perfect for building confidence. And honestly, once you do it successfully the first time, you'll realize it's much less intimidating than it seems. The tax software really does guide you through everything step by step. You're making smart financial decisions by skipping audit defense and building that emergency fund instead!

You're absolutely correct that loan repayments aren't taxable income - you're just getting your own money back. And unfortunately, these repayments can't be counted toward EITC since they're not "earned income" from work. Just wanted to add one important point that others haven't mentioned: if you're lending money to family members regularly, it's smart to keep simple records even for interest-free loans. A basic written note stating the loan amount, date, and repayment terms can save you headaches if the IRS ever questions large deposits in your bank account. Also, if your brother ever can't pay you back, having documentation helps if you need to claim it as a non-business bad debt deduction. Nothing fancy required - even a simple text message thread discussing the loan terms could work as documentation.

Great question! You're absolutely right - loan repayments are not taxable income since you're just getting your own money back. The IRS doesn't consider this "new" income. Regarding EITC, loan repayments unfortunately can't count as earned income. The EITC specifically requires income from employment, self-employment, or certain disability benefits. Since loan repayments aren't wages or earnings from work, they don't qualify. One tip: even though this was an informal family loan, consider keeping some basic documentation (even just text messages about the arrangement) in case you ever need to explain large deposits to the IRS. It's not required, but it can save headaches if questions come up later. If you had charged your brother interest, only that interest portion would be taxable income - but since it sounds like this was interest-free, there's nothing to report on your taxes at all.