Thanks for the additional info! Yes, this would be her first year of the AOTC since she's a freshman. Does it have to be 4 consecutive years or just 4 years total? Like if she takes a gap year, would we lose one of the years?

It's 4 years total for the student's lifetime, not necessarily consecutive. So if your daughter takes a gap year, you won't lose a year of eligibility. You can claim it for any 4 tax years, as long as she meets the other requirements each year (enrolled at least half-time in a degree program, hasn't completed first 4 years of education, etc.). Just keep good records of which years you've claimed it, especially if she transfers schools or takes time off, so you don't accidentally go over the 4-year limit.

I tried it but found it to be too basic for my situation. It didn't help much with the more complicated scenarios like how to handle scholarships vs loans vs out of pocket expenses. The questions were too general.

Thanks for bringing this up - I had no idea about the tax lien or the 5-year compliance period. Does the lien stay on your credit report even after the OIC is accepted and paid? And what exactly constitutes "compliance" for those 5 years? Just filing on time or are there other requirements?

The lien is typically released about 30 days after you complete your OIC payment. However, it will remain on your credit report for several years even after it's released, though the impact lessens over time. Some lenders may be understanding once you explain it's been satisfied through an OIC. Compliance means filing all required tax returns on time and paying all required taxes when due for 5 years. This includes making estimated tax payments if you're self-employed. If you can't pay in full, you need to immediately set up an approved payment arrangement. Even one late filing or missed payment could potentially void your entire OIC agreement and reinstate the original debt plus additional interest.

Did you use a tax professional or DIY the whole OIC process? I've gotten quotes ranging from $2500-4000 just for the professional help with the OIC paperwork.

1 That sounds perfect! Did the course cover self-employment taxes too? Also, was it a one-day thing or spread out over weeks?

22 The course definitely covered self-employment taxes! That was actually a whole module where we learned about Schedule C, business deductions, home office rules, and self-employment tax calculations. It was really thorough. It was spread over 6 weeks with one 3-hour class per week, which was perfect for absorbing the information gradually. We'd learn concepts one week and then apply them with practice scenarios the next week. Much better than trying to cram everything into a weekend workshop. Most community colleges offer similar programs, especially between September and January before tax season starts.

17 Any specific videos you'd recommend for someone just starting? There's so much content out there it's overwhelming.

Thanks for adding this! I do keep detailed rental logs, fortunately. But I'm still confused about the $100 floor and 10% AGI limitation - I thought those only applied to personal casualty losses from federally declared disasters after the TCJA? Does that mean I might not be able to deduct much of anything since this wasn't a declared disaster?

You're right that currently (through 2025) personal casualty losses are only deductible if they're from federally declared disasters. So for the personal-use portion of your property, you likely can't deduct anything unless your area was declared a disaster zone. For the business/rental portion, the $100 floor and 10% AGI limitations don't apply. That portion is fully deductible as an ordinary loss on Form 4684 Section B. So if your property is used 70% for business and 30% personal, you'd potentially be able to deduct 70% of your loss without those limitations.

Yes, security cameras for a rental property would be a deductible expense, but they'd be depreciated as improvements to the property rather than deducted as a casualty loss recovery expense. The business portion would be deductible based on your rental/personal use allocation.

Thanks for the info! That makes sense to depreciate them as improvements. I'll make sure to track the installation costs separately from the repair expenses for the damage.

What about the Social Security overpayment though? I work two jobs and always end up overpaying. Is there a way to adjust for that during the year too?

The Social Security overpayment is trickier because employers don't coordinate with each other. If you know your total earnings will exceed the Social Security wage base ($168,600 for 2024), you can estimate how much you'll overpay. The calculation is basically 6.2% of the amount you'll earn above the wage base across all jobs. Once you have that number, you can adjust your W-4 at your highest-paying job to compensate by adding that estimated overpayment amount to Step 3 of your W-4 or reducing the additional withholding in Step 4(c). Just be careful not to adjust so much that you end up owing a lot at tax time. It's usually safer to get a small refund than to owe penalties.

I'm planning on erring on the side of caution. If your income might put you over the threshold, don't adjust your withholding for the credit. Better to get a refund than owe penalties. You could also do a partial adjustment if you're fairly confident you'll get at least some of the credit.