Is there ANY legitimate reason to use one of these companies? Like what if your tax situation is really complicated or you owe hundreds of thousands of dollars?

There are very limited situations where professional representation makes sense. If you're facing criminal tax charges, have a complex business situation with multiple years of unfiled returns, or owe massive amounts (typically $250,000+) with significant assets to protect, then you should hire a tax attorney (not a "tax relief" company). For most people owing under $100,000 with relatively straightforward situations, you can handle it yourself. The IRS has standardized procedures for payment plans, offers in compromise, etc. They follow their own internal guidelines regardless of who's asking. A decent tax preparer can give you guidance for a fraction of what these companies charge.

Yeah I signed a contract but it was so vague about what they actually promised to do. Just said they'd "represent" me and "work toward resolution" without any specifics. I paid by direct withdrawal from my checking account, so I don't think I can dispute it like with a credit card. Been thinking about the BBB complaint though, good idea.

That doesn't work. Business donations still have to go on Schedule A as charitable contributions. The only exception is if you donate inventory, but as a product reviewer, these aren't really inventory in the traditional sense - they're compensation. The IRS is pretty clear about this distinction.

Thanks for clarifying. I thought there might be a workaround there, but it seems like the IRS has all the bases covered. It's unfortunate that receiving products and then donating them still results in the full tax burden without any direct offset.

That's a good point! We do have mortgage interest and state taxes. I'll have to run the numbers and see if these donations might push us over the standard deduction threshold. If they do, at least I'd get some tax benefit from the donations.

So to be clear, if I have spring 2022 expenses for undergrad and fall 2022 expenses for grad school, I need to choose one credit type for the whole year? I can't apply AOTC to spring and Lifetime Learning to fall?

You actually CAN claim both credits in the same tax year, but not for the same student. Since you're just claiming for yourself, you need to pick which credit gives you the better benefit. Most people in your situation would benefit more from claiming AOTC for your eligible undergrad expenses, since it's worth up to $2,500 and 40% of it can be refundable. The Lifetime Learning Credit is only worth up to $2,000 and is non-refundable. Look at your qualified expenses for each program and calculate which approach gives you the better result.

This trips up so many people! I'm a tax preparer and this is probably the most common mistake I see with education credits. Always check when the payment was actually made, not when the school billed you.

Would this cause any issues with the IRS matching systems? I'm worried that if I don't enter the exact forms as they were sent to the IRS, it might trigger some kind of mismatch or audit flag.

It shouldn't cause issues as long as the total interest amount you claim matches what was reported on your 1098 forms. The IRS matching system is primarily concerned with the total interest amount, not how you entered it into your tax software. That said, it's always best to keep copies of your 1098 forms and mortgage statements to document exactly how you calculated your deduction in case you're ever questioned. As long as you can show that your total claimed interest matches what was reported to the IRS, you should be fine.

I had this issue with TurboTax last year. What worked for me was entering the forms separately and when it wouldn't accept the $0 principal, I just put $1 instead. Then for the form from my new lender, I entered the correct principal balance as of year-end. TurboTax combined the interest amounts correctly for my deduction.

Thanks for bringing that up! Unfortunately, she already closed on the sale in April without setting up a 1031 exchange, and she's planning to retire with the proceeds rather than buying another investment property. I definitely should have mentioned that in my original post. I'm more concerned with making sure I've got the tax calculation right so she knows exactly what she'll owe. I realized I should also check if she's eligible for any state-specific tax breaks since this is a pretty significant capital gain and she's in her 70s.

Yes, that's an important consideration. The bonus depreciation taken would still be subject to recapture, but at ordinary income tax rates (not just the 25% rate that applies to straight-line depreciation). Make sure you separate out the portion that was taken as bonus depreciation from the regular depreciation when calculating the tax. Also remember that for improvements made in 2020, they would have been eligible for 100% bonus depreciation, so likely the entire cost was written off in that year. You'll need to recapture all of that at ordinary income rates.