I'm actually in graduate school, so I'm past the 4-year limit for AOTC. And I file independently, so no worries about the dependent situation. Would the loan disbursement date still be the determining factor for the LLC just like it is for AOTC?

Yes, the same timing rules apply to both the LLC and AOTC - it's when the payment is made to the institution that matters. For loan proceeds, that's the disbursement date to the school. Graduate school definitely limits you to the Lifetime Learning Credit, but at least you can claim that for an unlimited number of years. One other thing to watch for: make sure you're only claiming tuition and required fees, not room and board or other expenses, as qualified education expenses. The rules are pretty strict about what qualifies.

In TurboTax, when you get to the education section, there's a screen that asks about your 1098-T. After you enter the 1098-T info, it will ask if you had additional qualified expenses not reported on the form. That's where you can add the extra qualified expenses. Just make sure you have documentation to back it up!

Really appreciate the idea about the Chamber of Commerce - never would have thought of that! And good point about setting up systems for the future. Do you find QuickBooks easy to use for someone who's not naturally organized?

QuickBooks Self-Employed is pretty user-friendly, even for the organizationally-challenged! It connects to your bank accounts and payment apps, then automatically sorts transactions. You just need to review them occasionally to make corrections. The mobile app is super convenient - you can snap pictures of receipts on the go, and it has automatic mileage tracking. My accountant did an hour-long setup session with me to customize categories for my specific business, which made a huge difference. The key is consistent small efforts rather than trying to sort everything at tax time.

I checked out the NATP site and found three CPAs in my area who list cryptocurrency experience! Thanks for this tip - seems much more targeted than just googling "accountant near me" which is what I was doing.

What if you sell land that was gifted to you? My parents gave me some property a few years back and I'm thinking about selling. Would I use their purchase price as my basis or something else?

With gifted property, you generally take the donor's basis (what your parents paid originally) as your basis. This is different from inherited property, which gets a stepped-up basis to fair market value at the time of death. However, there's a special rule if the fair market value at the time of the gift was LESS than the donor's basis and you sell at a loss. In that case, you use the fair market value at time of gift to calculate the loss. It's a bit complicated, but Publication 551 from the IRS explains this in detail. Also keep in mind that if your parents paid gift tax when they gave you the property, you might be able to add some of that gift tax to your basis, potentially reducing your gain when you sell.

Also check for any local taxes! Some cities have their own income taxes that apply to capital gains too. Philadelphia got me with this - had to pay city tax on top of federal and state.

1 Thanks for this suggestion! I just checked my paystubs and you're absolutely right - my first employer continued to withhold for Colorado even after I moved to Washington. No wonder I owe so much! Is there any way to fix this after the fact or am I just stuck paying what I owe now?

9 Unfortunately, you generally can't fix it after the tax year has ended - you'll need to pay what you owe now. But you should immediately contact your payroll department to correct it for this year so you don't have the same problem next tax season. For this year's taxes, make sure you're filing as a part-year resident for Colorado and indicating the correct dates you lived in each state. That will at least ensure you're only paying Colorado tax on income earned while you were actually living there.

18 Colorado and Washington don't have a reciprocity agreement, but that's actually not relevant in this case anyway. Reciprocity agreements typically apply to people who live in one state but work in another. Since Washington has no income tax, there's no double taxation issue here. The problem is more about proper withholding and filing correctly as a part-year resident. The OP needs to file a part-year return for Colorado, reporting income earned while a resident there (plus any Colorado-sourced income after moving).

16 That makes sense, thanks! I was confusing reciprocity with something else. Sounds like moving to a no-income-tax state should be beneficial in the long run, even if it causes some confusion in the transition year.

That's an interesting option I hadn't thought about. Would I still need to file anything special for 2022 and 2023 to show that I'm now applying that excess to 2024? Or does just paying the penalty take care of it?

You would need to file Form 5329 for tax years 2022 and 2023 to pay the 6% excise tax for each of those years. Then when you do your 2024 taxes, you would indicate that you're applying prior year excess contributions to your 2024 contribution limit. The important thing is that you don't make a full contribution for 2024 if you're applying the excess from 2022. For example, if the 2024 limit is $7,000 and you're applying $4,630 from 2022, you would only be able to contribute an additional $2,370 for 2024. It's a good option if you're short on cash but still want to maintain your retirement savings.

The Roth income limits also increased for 2024. For single filers, the phaseout range is now $146,000-$161,000. So if OP's income is similar to 2022 (around $140k), they might be fully eligible this year without any phaseout.

That's a good point. With the new higher income phaseout ranges, OP might not run into the same problem for 2024. But they still need to address that 2022 excess contribution issue regardless of their current situation. Leaving it unresolved means continuing to pay that 6% penalty year after year.