Is the 1098-T required to claim the credit? My school is weird and doesn't always send them on time.

While the 1098-T is helpful documentation, it's not technically required to claim the Lifetime Learning Credit. If you don't receive one or it's incorrect, you can still claim the credit using your own records of qualified education expenses. Keep documentation like receipts, cancelled checks, credit card statements, and any official statements from your educational institution showing you paid qualified expenses. The burden is on you to prove eligibility if audited, so good record-keeping is important even without the 1098-T.

You can definitely claim both credits in the same tax year, but not for the same student. If you and your wife are both in school, you could potentially claim AOC for one person and LLC for the other, depending on eligibility. That's a great way to maximize education tax benefits on one return!

Do you know if the reps had to pay back any of the business deductions they'd claimed? I've been deducting home office, internet, phone, etc., as a 1099 and I'm worried if I get reclassified I'll owe a ton for those past deductions.

From what I understand, the reps didn't have to pay back deductions they had legitimately claimed while operating under the 1099 status. The IRS generally doesn't penalize workers in these situations since you were filing based on the classification given to you by the company. However, going forward after reclassification, they could no longer claim those business deductions as W-2 employees. That's definitely something to consider in your calculations - while you save on the employer portion of FICA taxes as a W-2, you lose those valuable business deductions. In some cases, especially if you have significant legitimate business expenses, remaining a 1099 might actually be more financially beneficial despite the higher self-employment tax.

Yes! I managed to negotiate a 12% increase in my commission rate when my company reclassified me from 1099 to W-2 last year. The key was coming prepared with exact numbers showing: 1) The taxes they'd now be paying (7.65% of your income) 2) The benefits costs they'd incur 3) The exact business deductions I'd be losing 4) Market rates for W-2 sales reps with my performance level I presented it as a business case rather than a demand. They actually appreciated the transparency and realized keeping top performers was worth the adjustment.

That's really helpful, thanks for the specific percentage figure and the breakdown of what to include in the negotiation. I'll definitely put together that kind of detailed analysis before approaching them. I'm curious though - did your overall take-home pay end up being higher, lower, or about the same after the transition? And did you notice any benefits to being W-2 beyond just the tax situation?

What about if the stock value dropped between when I received it and when I sold it? Can I claim a loss in that case? My employer gave us stock at $75/share but by the time I sold it had dropped to $58.

Yes, if the stock value dropped between when you received it and when you sold it, you can absolutely claim a capital loss. In your example, if your stock was valued at $75 per share when granted (and that amount was included in your W-2 income), but you sold at $58 per share, you would have a capital loss of $17 per share. This loss can be used to offset capital gains from other investments, and if your total capital losses exceed your gains, you can deduct up to $3,000 of the excess loss against your ordinary income. Any remaining loss can be carried forward to future tax years.

In TurboTax, when you enter your 1099-B information, there should be a screen that says something like "Review your 1099-B entries" after you input the initial information. On that screen, you can select the specific stock transaction and click "Edit" or "Update." There should be a field labeled "Cost basis" where you can manually enter the correct amount instead of using what's on the form.

Can you get these transcripts if you haven't filed for several years? I thought your online access gets restricted if you're not in compliance?

You're right that online access might be restricted for non-filers. In that case, you can still get them by mail using Form 4506-T. It takes a few weeks but gives you exactly what income the IRS has on record. Even if your friend can't access his own transcripts directly, a tax professional with proper authorization (Form 2848 Power of Attorney) can access these transcripts on his behalf through the tax pro's account. This is another reason working with a professional is valuable in catch-up situations.

Did you get hit with huge penalties? I'm in a similar situation and I'm terrified of what I might owe with all the added penalties and interest.

Wait, so if these forms don't even exist anymore, why would my preparer mention using different forms? Now I'm really confused and wondering if I should find a new tax person. Do you have any suggestions for how to find a good tax preparer?

I'd be concerned if your preparer is actually referring to these outdated forms, as they haven't been used since 2017. They might be using simplified language to describe your tax situation, but it's a red flag if they're literally talking about filing these forms recently. For finding a good preparer, I recommend looking for an Enrolled Agent (EA) or CPA who specializes in individual taxes. Ask friends for recommendations, check Google reviews, and interview potential preparers before hiring. Ask questions like: How long have you been preparing taxes? What continuing education do you complete? How do you stay current with tax law changes? A good preparer should be able to clearly explain why your refunds differed and shouldn't mind questions.

Good point! I had something similar happen when I moved from Illinois to Indiana mid-year. The state portion made a massive difference.