I didn't even think about state taxes! I was in Illinois for college. Do you know if they're more aggressive than the IRS about pursuing old unfiled returns?

Illinois actually follows the federal statutes of limitations pretty closely for most tax matters, generally 3 years from filing or due date (whichever is later). However, like the IRS, they technically have no time limit for unfiled returns. That said, Illinois typically receives information from the IRS and educational institutions, so if the IRS hasn't flagged your account, Illinois likely hasn't either. State tax authorities usually have even fewer resources than the IRS for pursuing older, smaller cases. If you haven't received notices from Illinois by now, it's even less likely they'll pursue this than the federal government would.

Yes, he should check the box indicating that someone can claim him as a dependent when filing his own return. This is important because it affects his standard deduction amount and eligibility for certain credits. Being claimed as a dependent doesn't eliminate his obligation to file his own return if he meets the filing requirements (which for 2024, for dependents with only earned income, would be income exceeding $14,600). He'll need to report his taxable scholarship income (the portion exceeding qualified education expenses) as income on his return.

Do you know if property management time counts toward the 750 hours? I spend about 10 hours a week managing our rentals, but I'm not sure if that's enough to qualify.

Yes, property management time absolutely counts toward the 750 hours requirement, so your 10 hours weekly would give you about 520 hours annually. However, that alone wouldn't reach the 750-hour threshold. The bigger issue is that you also need to spend more than half your total working time on real estate activities to qualify as a real estate professional. So if you have a full-time job outside of real estate (say 2,000 hours/year), your 520 hours of property management wouldn't meet the "more than half" test. This is why it's often easier for one spouse to qualify if they're primarily focused on real estate activities.

How do you determine the split between land and building value for depreciation purposes? My county tax assessment breaks it down, but I've heard that's not always the best method.

This is a good point I hadn't considered! My last US address was in Florida before moving to Germany. I still have my Florida driver's license though it's expired now. Would I still need to worry about state tax issues even though Florida doesn't have state income tax?

You're in a good position having your last residence in Florida since they don't have state income tax. States without income tax (like Florida, Texas, Nevada, etc.) don't generally pursue former residents for tax purposes. The bigger concern is for people from high-tax states like California or New York, where state tax authorities sometimes argue that you never truly "left" if you maintain certain connections. In your case with Florida, as long as you're filing your federal returns properly, you shouldn't have to worry about state tax complications.

This is so true! I got absolutely destroyed on taxes because I had UK investment funds that were classified as PFICs. The forms are ridiculously complicated (Form 8621) and the taxation is punitive compared to US-based investments. I ended up selling all my foreign funds and only investing through US brokerages now.

Thanks for the tip about FreeTaxUSA! Did it handle the scholarship question well? That's my biggest concern - making sure we properly categorize what's taxable vs. non-taxable.

FreeTaxUSA handled the scholarship situation really well. It specifically asks whether scholarship money was used for qualified expenses (tuition, books, required fees) versus non-qualified expenses (room and board, living expenses). It also provided clear explanations about which portions of scholarships are taxable and which aren't, something TurboTax didn't explain as clearly in my experience. The program walks you through it step by step and even has a help section specifically addressing graduate student scholarships and fellowships.

What about tax credits that weren't available before? I heard the income thresholds change when filing jointly and you might qualify for different credits?

7 What's the best way to track mileage? Is there an app you recommend or is the old-fashioned paper log still better?

13 I recommend a digital solution over paper logs. Apps like MileIQ, Everlance, or TripLog automatically track your trips using GPS and let you classify them as business or personal with a simple swipe. The most important thing is consistency. The IRS wants to see regular tracking, not estimates or reconstructed logs created after the fact. Even with an app, take a moment each day or week to classify your trips while they're fresh in your mind. Also document the business purpose for trips - just having the mileage isn't enough if you get audited.

15 Leasing can be simpler for taxes since you generally deduct the actual lease payments as a business expense based on your business use percentage. No Section 179 or depreciation calculations to worry about. But leasing usually costs more over time than buying. If you buy using Section 179, you get a bigger deduction upfront, which sounds like what you're looking for to reduce this year's tax bill. The trade-off is smaller deductions in future years.