Do you know if this works if you used the free version? I always use different free services each year depending on which one will let me file for free, so I'm not sure if they save returns for the free users.

Yes, it generally works even with the free versions! I've used the free version of TurboTax for years, and they still save all my returns. The only difference is how long they store them - some free versions might only keep them for 3 years while paid versions might store them for 7+ years. Even if you used different services, it's worth checking all of them. Just make sure you're logging in with the same email you used when you filed in 2020. Sometimes people forget which email they used for tax services.

This worked for me! My return kept getting rejected and I was panicking. Tried the $0 AGI trick and it went through immediately. Thanks for the tip!

Are there any downsides to filing when you don't have to? Like does it trigger any extra scrutiny or anything?

There are really no downsides to filing when not required. It doesn't trigger extra scrutiny or increase your audit risk. The IRS actually appreciates voluntary compliance. Filing an unnecessary return might be a slight inconvenience, but many tax software options are free for simple returns with low income. Plus, getting in the habit of filing annually helps you understand the process better for when you do have more complex tax situations in the future.

Yes, that changes things! Any amount of capital gains (including crypto) technically requires filing, regardless of how small the amount. The IRS is particularly focused on cryptocurrency transactions. Even $200 in crypto gains should be reported.

That's a really good point I hadn't considered fully. My daughter did have an internship last summer and works part-time during school, probably earning around $14,000 for the year. Would that be enough to utilize most of the credit?

With $14,000 in earnings, your daughter should have enough tax liability to utilize a good portion of the non-refundable part of the AOTC. After the standard deduction (around $13,850 for 2023), she'll have a small taxable income. Even with minimal tax liability, she'll still get the $1,000 refundable portion, plus whatever portion of the $1,500 non-refundable part her tax liability allows. So while she might not get the full $2,500, she'll likely get significantly more than $1,000. Definitely worth calculating both scenarios to see which benefits your family more overall.

Yes, scholarships definitely impact the AOTC calculation! Tax-free scholarships that are used for qualified education expenses (tuition and required fees) reduce the amount of expenses eligible for the credit. However, if the scholarship is used for room and board (by including it as taxable income), then it doesn't reduce qualified expenses.

Thanks for this explanation. I actually did get some kind of pandemic-related credit in 2023 now that I think about it. I'll have to check my old return. Do you know if there's a simple way to compare the two returns side by side to spot the differences?

Most tax software allows you to view or download PDF copies of your previous returns. I'd suggest opening both your 2023 and 2024 returns and comparing the following sections: adjusted gross income, taxable income, total tax, and tax credits. The key differences will usually jump out when you see them side by side. Pay special attention to any lines that have numbers in one year but are blank or zero in the other - those are often the special credits that might have disappeared. If you used online tax software, many have a comparison feature that will highlight year-over-year differences automatically.

Filing status makes a massive difference! I accidentally filed as Single instead of Head of Household last year and had to file an amended return. The refund difference was almost $2,000! Definitely worth checking.

What about component depreciation or cost segregation studies? I've heard those can front-load even more depreciation. Are those worth doing for a small investor with just 1-2 properties, or are they only worthwhile for larger portfolios?

Cost segregation studies absolutely can be worth it even for small investors with 1-2 properties, especially for properties with higher improvement values (like $300K+ in building value). These studies typically identify 20-30% of a building's components that can be depreciated over 5, 7, or 15 years instead of 27.5 years. The sweet spot is usually properties purchased in the last 1-3 years with significant improvement value. The studies themselves typically cost $3,000-$7,000 depending on property size and complexity, but can generate tax savings of $15,000-$50,000 in the first year for many properties. Just make sure you work with a reputable firm that has experience defending their studies in IRS audits if needed.

Yes, you still have to pay depreciation recapture even if you sell at an overall loss. The IRS treats the depreciation recapture as a separate calculation from your capital gain/loss. So you could have a capital loss on the sale but still owe depreciation recapture tax on all the depreciation you claimed (or should have claimed) during ownership. It's one of the nastier surprises in real estate taxation.