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11 If you're stuck and don't want to use those services, here's a direct way to find it: In TurboTax Free, after entering your income info, go to: 1) Federal Taxes 2) Deductions & Credits 3) Look for "Recover Rebate Credit" or "Stimulus Payment" If you still don't see it, check if you accidentally told TurboTax you already received the payments. You might need to go back and change your answer to the question "Did you receive Economic Impact Payments in 2020?
17 I found it! It wasn't under Deductions & Credits for me though. It was under "Other Tax Situations" on my version. Thanks for pointing me in the right direction!
3 Anyone else having an issue where TurboTax keeps saying I'm not eligible for the stimulus money even though I know I am? I was claimed as a dependent in 2019 but not in 2020, and I've checked all the requirements.
Just wanted to add that AMTI is one of those things that becomes relevant in very specific situations. The main triggers that cause regular people to suddenly have to deal with AMT: 1. Exercising incentive stock options (ISOs) 2. Large long-term capital gains in certain brackets 3. Having multiple children AND a high income 4. Claiming certain business depreciation methods For most W-2 employees with standard deductions, you'll never have to worry about this. TaxAct and other software calculate it automatically for you anyway.
Is AMTI the same as AMT? Or is one a calculation used to determine the other? So confusing...
AMTI (Alternative Minimum Tax Income) is what's used to calculate your AMT (Alternative Minimum Tax). AMTI is your income figure after certain adjustments and with fewer deductions allowed than in the regular tax system. The software uses your AMTI figure to determine if you need to pay AMT. First it applies your exemption amount (the number OP mentioned), then calculates the tax on what remains. If that tax amount is higher than your regular tax calculation, you pay the AMT instead. Think of it as two parallel tax systems running side by side, and you pay whichever results in the higher amount.
I had this exact issue last year! The way my accountant explained it to me was: imagine there are two different ways to calculate your taxes. The normal way with all the standard deductions, and the AMT way which allows fewer deductions. The government makes you calculate both and pay whichever is HIGHER. AMTI is just what your income looks like under that second calculation method. The "exclusion" is similar to a standard deduction for the AMT calculation.
Just a heads up to make sure you're claiming the right education credit! The American Opportunity Credit is usually better than the Lifetime Learning Credit for undergrads because the max is $2,500 instead of $2,000, AND 40% of it is refundable even if you don't owe taxes. But AOTC can only be claimed for 4 years per student, while the Lifetime Learning has no limit. Also, AOTC requires the student to be pursuing a degree and enrolled at least half-time, while LLC doesn't have those requirements.
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.
Has anyone tried using the IRS's Interactive Tax Assistant for education credits? I found it super helpful last year when trying to figure out which education credit to claim. You answer some questions and it tells you which credit you qualify for.
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.
Your brother should know that even if the IRS doesn't immediately come after him for not filing, it can cause problems later in life. I didn't file for two years during college because I thought my income was too low to matter. Fast forward five years, and I couldn't get approved for a mortgage because the lender required tax transcripts for the past seven years. Had to file those returns retroactively and it delayed our home purchase by months. The IRS eventually creates a substitute return for non-filers, but they don't include any deductions or credits you might be eligible for. They basically assume worst-case scenario for your taxes. Tell your brother it's much easier to deal with this now than years down the road.
Did you get penalized when you finally filed those old returns? Was it complicated to do the back filing?
I didn't get penalized because I was actually owed refunds for both years - turns out I had way too much withheld from my paychecks. There's generally no penalty when the IRS owes you money, but you only have 3 years to claim those refunds. Back filing wasn't too complicated, but it was annoying having to track down old documents and W-2s from employers I no longer worked for. I had to contact the IRS for wage transcripts since one employer had gone out of business. The whole process took about a month to gather everything and file. If I'd owed money, I would have faced failure-to-file penalties plus interest for those years.
Has anyone mentioned to this kid that if he's due a refund, he's literally leaving his own money on the table? When I was 18, the only reason I filed taxes was because I got back almost all the federal taxes that had been withheld from my part-time job. It was like a bonus check!
Nia Thompson
Whatever you do, DON'T use those "pennies on the dollar" tax relief companies you see on TV. My brother paid one of them $5,000 and they literally just filled out forms he could have done himself. Complete waste of money. Your best bet is to find a local EA (Enrolled Agent) who specializes in back taxes. They're usually more affordable than CPAs but still have full authority to represent you before the IRS. Mine charged around $350 per tax year to prepare returns plus $500 to handle setting up my payment plan.
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Mateo Rodriguez
ā¢What's the difference between an EA and a CPA? Is one better than the other for tax issues?
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Nia Thompson
ā¢An EA (Enrolled Agent) specializes exclusively in taxes and is licensed directly by the IRS, while CPAs have a broader accounting background and are licensed by states. For pure tax issues, especially back taxes and IRS problems, EAs often have more specialized experience and can be more affordable. CPAs are great for complex financial situations where you need broader accounting expertise along with tax knowledge. Neither is inherently "better" - it depends on your specific needs. For straightforward back tax filing and IRS negotiations, an EA is usually sufficient and cost-effective. For business owners or people with complex investments and financial planning needs, a CPA might be worth the higher cost.
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GalaxyGuardian
Has anyone tried the IRS Fresh Start program? I heard it helps people with back taxes but don't know much about it.
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Aisha Abdullah
ā¢Fresh Start isn't actually a program you apply for - it's a set of policies the IRS implemented to make it easier for taxpayers to resolve tax debts. It includes expanded installment agreements, easier Offer in Compromise qualifications, and some tax lien relief. The main benefits: you can now get installment agreements with simplified procedures if you owe up to $50K (used to be much lower), and they made it easier to qualify for Offers in Compromise by changing how they calculate your ability to pay. You don't apply for "Fresh Start" specifically - you just take advantage of these more flexible options.
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