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Hey, I had the exact same problem! If your return got accepted with 0 AGI, that means you didn't file taxes last year OR there was some processing issue with your previous return. The IRS system uses the prior year AGI as identity verification. For anyone else reading this with similar issues: if you don't know your PIN and can't remember your exact AGI from last year, using 0 as your AGI is the standard fallback option recommended by the IRS themselves. This works especially well if: - You didn't file last year - Your previous return is still processing - You filed on paper last year instead of electronically
Does this zero AGI trick work for everyone? I'm having a similar issue but I definitely filed and had income last year. Feels weird to put in zero when that's not accurate.
It doesn't work for everyone, but it's an official IRS recommendation for certain situations. If you definitely filed electronically last year and your return was processed normally, you should use your actual AGI from line 11 of your 1040 form. The zero AGI option is mainly for people who didn't file last year, had a return still processing, or filed by paper. In your case, I'd recommend double-checking your actual AGI very carefully - even a small difference (like entering $45,231 instead of $45,213) will cause a rejection.
Had the same problem. Found out TurboTax creates a different PIN each year that you set during the filing process. For me the problem was I had entered my AGI wrong - I was looking at line 7 instead of line 11 on my 1040. Double-check that.
This! I made the exact same mistake. The form changed from 2020 to 2021 and the AGI moved to a different line. I was using the wrong number.
Just a heads up - even if your income was below the filing threshold, you might still want to file if you had any federal taxes withheld from your paychecks. You could be due a refund! The IRS only gives you 3 years to claim refunds, so 2018 would still be within that window if you file soon.
Oh that's a really good point I hadn't considered! I did have some taxes taken out of my paychecks that year. Do you know if I'd still be able to get that money back even though it's been a few years?
Yes, you can still get that money back! For 2018 returns, you have until April 15, 2022 to file and claim any refund owed to you. After that date, any unclaimed refund becomes property of the Treasury. If you're due a refund, there's actually no penalty for filing late. The penalties only apply when you owe taxes. So this might be a win-win - you comply with the IRS request and potentially get some money back at the same time.
For anyone else who runs into this situation - I learned the hard way that even if you're under the filing threshold, if you received the Premium Tax Credit (Obamacare subsidy) during that year, you ARE required to file a return regardless of income. The IRS came after me for this exact reason.
Also worth noting that if you had self-employment income over $400, you're required to file too, even if your total income is below the standard threshold. Made that mistake my first year doing gig work.
Umm, aren't we forgetting about the "economic substance doctrine"? The IRS can disallow transactions that don't have a real economic purpose beyond tax avoidance. If you sell and immediately rebuy the exact same crypto, they might argue there was no real economic purpose. I'm not a tax pro but I read about this somewhere. Maybe someone here knows more?
That's more applicable to complex corporate tax shelters than to individual investors making normal investment decisions. As long as you have a legitimate investment purpose (which it sounds like OP does - they believe in the long-term prospects), tax-loss harvesting is a widely accepted practice. Even traditional brokerages recommend it for stock portfolios. The key is having investment intent beyond just tax savings. The fact that OP genuinely wants to maintain investment in this crypto should be sufficient.
Don't forget another benefit - if your losses exceed your gains plus the $3000 limit for ordinary income, you can carry forward the unused losses to future tax years! I had $7500 in crypto losses last year, used $3000 against my income, and am carrying forward $4500 to use this year. It's not just a one-year benefit. Think of it as the government letting you spread a large loss over multiple tax years, which is actually pretty reasonable when you think about it.
One thing that hasn't been mentioned yet - make sure to check if you need to file a Form 3520 (Annual Return To Report Transactions With Foreign Trusts and Receipt of Certain Foreign Gifts). The threshold for reporting foreign inheritances is pretty high though - $100,000 from a nonresident alien individual or foreign estate. Since your spouse was a US citizen, you likely don't need to file this form, but it's something to be aware of for others dealing with foreign inheritances.
Thanks for bringing this up! My understanding was that since my husband was a US citizen, I don't need to file Form 3520 even though the property is in the UK. Is that correct? Are there any other international forms I should be aware of besides FBAR and the Form 8938?
You're correct. Since your husband was a US citizen, you don't need to file Form 3520 for this inheritance, even though the property is located in the UK. The form is specifically for gifts or inheritances from foreign persons (non-US citizens/residents). Beyond FBAR (FinCEN Form 114) and Form 8938, you might want to be aware of Form 8833 if you're claiming benefits under the US-UK tax treaty, but that's typically not needed for straightforward inheritances. Also, if you maintain any financial accounts in the UK after settling the estate, remember you'll need to continue reporting those on FBAR and potentially Form 8938 in future years if they meet the threshold.
Just a heads up - I'm a dual citizen too and when I inherited from my UK family, I found that currency exchange rate timing can make a big difference. The IRS will want to see values converted to USD, but the rate fluctuates daily.
Ravi Sharma
Don't forget to check if your state offers education credits too! I'm in New York and we have a separate college tuition credit that gave me another $400 on my state return. TurboTax should walk you through this too, but sometimes the state credits are easy to miss.
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Paolo Romano
ā¢I hadn't even thought about state credits! I'm in California - does anyone know if there are education credits here too? Turbo Tax hasn't mentioned anything about state-specific education stuff yet in my filing process.
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Ravi Sharma
ā¢California doesn't have a specific education credit like some states do, unfortunately. However, California does conform to some federal tax benefits related to education. For example, if you have student loan interest, that deduction carries over to your California return automatically. While you won't get an additional education credit on your state return, the money you save from the federal AOTC will still make a big difference in your overall tax situation. Make sure you're claiming all qualified expenses including required course materials and books, not just tuition!
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Freya Larsen
Quick tip that saved me last year: if you've already filed but realized you missed claiming the education credit, you can file an amended return (Form 1040-X). I did this last April after realizing I could claim the AOTC, and got an additional refund of $1,500!
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Omar Hassan
ā¢How far back can you amend returns for this? I totally missed claiming education credits for 2023 too. Is it too late?
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