That's really helpful info. Does "placed in service" mean when we buy the property, or is there something specific we need to do to consider it "placed in service" for tax purposes?

Placed in" service generally means when the property is ready and available for its intended use - so for a rental property, it would typically be when'it s ready to be rented out to tenants. If you purchase a property'that s already tenant-ready, the placed-in-service date would likely be the purchase date. However, if you buy a property that needs substantial renovations before it can be rented, the placed-in-service date would be when those renovations are complete and the property is ready for rental. This is an important distinction because it determines which'year s bonus depreciation percentageapplies.

Good point about depreciation recapture! One strategy to deal with this is using 1031 exchanges when you sell to defer both the capital gains and the depreciation recapture. We've been doing this for years - selling properties and rolling the proceeds into larger ones without paying tax.

That's super helpful, thanks! I'm in my 5th year of college (took a gap year), so maybe I hit the AOC limit? I didn't realize there was a 4-year maximum. Should I manually select Lifetime Learning Credit instead? And I definitely have receipts for books - how do I add those to FreeTaxUSA since they're not on my 1098-T?

Yes, if you've already claimed the AOC for 4 years, you'll need to use the Lifetime Learning Credit instead. In FreeTaxUSA, when you get to the education credit section, it should ask about previous years. Make sure to indicate you've already used the AOC for 4 years, and it should switch you to the LLC automatically. If not, there should be an option to manually select which credit you want. For books and supplies, FreeTaxUSA should have a section where you can enter additional qualified education expenses not reported on the 1098-T. Look for a field labeled something like "Course Materials" or "Additional Education Expenses" within the education credit section. Enter the total amount you spent on required textbooks and materials there. Keep those receipts in case of an audit!

This happened to me too - box 7 was checked and messed everything up! The amounts included my spring semester that I prepaid in December. When I adjusted for that, my credit calculation started working correctly.

I think the Home & Business would actually be perfect for your situation with the online craft sales. It's specifically designed for people with a small business or self-employment income. The Deluxe version doesn't include all the business expense categories and Schedule C support that you probably need. Let me figure out how to get this to you without violating any terms of service. Might need to check what the other commenter mentioned about transfers not being allowed.

Thanks for the info! That makes sense about the Schedule C support. I didn't realize how many business deductions I might be missing with just the Deluxe version. Please let me know what you find out about transferring it.

I second this! Been using FreeTaxUSA for 3 years now. It handles my freelance work and investment accounts perfectly. Federal filing is free and state is only like $15. No idea why people still pay $100+ for TurboTax.

That's exactly the kind of distinction I was wondering about! Did you have to provide any specific documentation to the IRS to prove it was a waiver and not a scholarship? My financial aid letter does say "tuition waiver" and "non-disbursing" but I'm worried that might not be enough.

We kept copies of her financial aid award letter that specifically called it a "tuition waiver" and noted it was "non-disbursing." We also kept documentation showing no tuition was ever billed to her student account - just the other expenses like room and board, books, etc. Our accountant said the specific terminology on the financial aid documents is crucial. The fact that yours says "non-disbursing" is very helpful. That's exactly the kind of language that indicates no support was actually provided - there was simply no charge applied. Definitely bring those documents to your accountant appointment!

This is a really good point! The 1098-T reporting can make a huge difference. My son's school didn't include his tuition waiver in Box 5, and we had no issues excluding it from support calculations. But my nephew's university did include his waiver in Box 5, and they ended up having to pay kiddie tax.

Wait, are you sure the penalty is gone? I thought Biden brought back the healthcare mandate? I've been worried about this for my 2024 taxes.

The federal penalty for not having health insurance (the individual mandate) was reduced to $0 starting in 2019, and that's still the case for federal taxes. The American Rescue Plan didn't reinstate the penalty. Some states like California, Massachusetts, New Jersey, Rhode Island, and DC have their own individual mandates with penalties, so if you live in one of those states, you might still face a state tax penalty. But on your federal return, there's still no penalty for not having coverage.

The federal penalty is $0 now, but it's not an "audit" if they're asking about it - it's just verification. I think the IRS systems still flag returns with no coverage marked, but they don't actually charge a penalty. They just want to make sure you really don't have coverage vs. forgetting to include your insurance info.