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Just to add a bit more info - I'm a software developer and created my own script to handle my crypto taxes last year. The key thing to know is that Form 8949 has a summary section at the top, but you MUST include all transactions in the detailed section. What I did was print the summary page and then attach a spreadsheet with all individual transactions labeled "See attached statement for details" which satisfies the reporting requirements. Most tax software will generate this format automatically.
That's a really helpful suggestion! Did the IRS accept your return with the spreadsheet attachment without any issues? And did you organize the spreadsheet in exactly the same format as Form 8949 or did you use a different layout?
Yes, the IRS accepted it without any issues. I organized the spreadsheet to match Form 8949's column structure exactly - description of property, date acquired, date sold, proceeds, cost basis, gain/loss, etc. I made sure to include all the same information that would be on the official form. I also included subtotals at the bottom of each page and made sure those matched what I reported on the summary section of the official 8949. The key is making sure your attachment contains all the required information in a clear, organized format that an auditor could easily follow if needed.
Has anyone used CoinTracker or Koinly for this? I've heard mixed things but wondering if they're worth trying.
There's another option nobody has mentioned! If your parents CAN claim you but choose not to, they can still claim the education expenses on THEIR return, even if you file your own return for your income. That might be more beneficial overall if they're in a higher tax bracket. My parents and I worked it out this way - I filed my own return for my part-time job, but they claimed me as a dependent and took the education credits. We calculated both ways and they saved way more, so they gave me some of the savings. Win-win!
Would this work if the student paid for tuition themselves from their own savings? My son is using money from his 529 plan that's in his name, not mine.
That's a great question - yes, it can still work! What matters is who can claim the student as a dependent, not who actually paid the expenses. Even if your son paid his tuition from his own 529 plan, as long as he qualifies as your dependent (under 24, full-time student, you provide more than half his support), you can claim the education credits on your return. The IRS doesn't track whose bank account paid the school - they care about dependent status.
Has anyone run into trouble with the IRS questioning your support calculation? I'm nervous about claiming I provide more than 50% of my support when it's honestly hard to calculate exactly. I pay my tuition with loans in my name, buy my own food, and pay for my car, but my parents provide housing and health insurance.
I had to prove this during an IRS review last year. They wanted documentation for EVERYTHING. Make sure you keep records of all your expenses, income, loans, etc. The housing part is tricky - they count the fair rental value of your parents' support.
Been a landlord for 15 years. Here's the simple version: Regular rental activity = passive income = NO self-employment tax, even with QBI. The confusion happens because QBI requires "trade or business" activity, which sounds like it would trigger SE tax, but the IRS specifically carved out rental real estate as an exception. You only pay SE tax if you're basically running a hotel/B&B type operation OR if you're a real estate dealer (buying/selling properties as your primary business). Just collecting rent, handling repairs, finding tenants, etc. won't trigger SE tax.
What about short term rentals like Airbnb? I have a vacation property I rent out and I'm taking QBI on it, but now I'm worried about the self employment tax thing.
Short-term rentals exist in a gray area that depends entirely on the level of services you provide. If you're just providing the basic rental with minimal services (cleaning between guests, basic amenities), it's still generally treated as rental income without SE tax. If you're providing substantial services like daily cleaning, breakfast, concierge services, guided tours, etc., then it starts looking more like a hotel operation and could trigger SE tax. The more your rental resembles a hotel experience rather than just a place to stay, the more likely you'll face SE tax. This is true even if you're using Airbnb or similar platforms.
Anyone know if property management fees count toward the "services" that might trigger self employment tax? I own the properties but pay a company to handle everything.
Using a property management company actually strengthens your position that it's passive income not subject to self-employment tax. When you hire a management company, you're further removed from the day-to-day operations, which reinforces the passive nature of your investment. The management company might need to pay self-employment tax on their fees (depending on their business structure), but you as the property owner are just collecting passive rental income. This arrangement makes it very clear that you're an investor, not running an active business, so you can still potentially qualify for QBI without worrying about SE tax.
Just wanted to add that you should also check if your college grant looks at AGI (adjusted gross income) or total income. If it's AGI-based, you might have some options to reduce your reportable income. For example, you could make a deductible IRA contribution before the tax filing deadline, which would lower your AGI for 2024. The contribution limit is $7,000 for 2024 if you're under 50. Even if you don't have much savings, you could potentially use part of your December paycheck to make this contribution.
Do you know if HSA contributions work the same way for reducing AGI? I have a high-deductible health plan and wondering if I could make a last-minute HSA contribution to lower my income for financial aid.
Yes, HSA contributions absolutely work for reducing your AGI! For 2024, you can contribute up to $4,150 for individual coverage or $8,300 for family coverage. And you're right, you can make these contributions all the way up until the tax filing deadline (normally April 15, 2025) and still have them count for your 2024 taxes. It's actually one of the best tax advantages available because the money goes in pre-tax, grows tax-free, and comes out tax-free when used for qualified medical expenses. Definitely a great strategy for reducing AGI for financial aid purposes.
Double check with your financial aid office ASAP!! Different grants have different income verification methods. Some use FAFSA's prior-prior year, some look at calendar year, and others might even look at academic year income. I lost a scholarship because I assumed it was based on tax year income, but they actually were looking at a different 12-month period. Biggest financial mistake of my college career :
This! Financial aid rules are super confusing and inconsistent. My roommate and I both applied for the same grant, but they calculated our eligibility completely differently because of how our parents' income was reported.
Lara Woods
Make sure to send your response via certified mail or some international equivalent that gives you tracking and delivery confirmation! I had a similar situation and the IRS later claimed they never received my response. Without proof of delivery, I had to go through the whole process again.
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Eleanor Foster
β’That's a great tip! Do you know which international shipping methods the IRS accepts as proof of delivery? I'm in Germany so I assume Deutsche Post has some options, but not sure which ones the IRS recognizes.
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Lara Woods
β’Any service that provides tracking and delivery confirmation should work. DHL, FedEx, and UPS are all recognized by the IRS. Deutsche Post's registered mail service (Einschreiben) should also work fine. The key is getting a tracking number and delivery confirmation you can save. The IRS doesn't specify which carriers they prefer - they just need verifiable proof you sent it by a certain date and that they received it.
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Adrian Hughes
Just want to point out - since you already PAID your taxes, this is mostly a paperwork issue and not something to panic about. The IRS cares most about getting their money, which they already have. I had a similar situation (though domestic) and just sent in the signed form with a brief explanation. Never heard anything else about it. They just needed to check the box that they had my signature.
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Molly Chambers
β’This isn't entirely accurate. An unsigned return is technically not a valid return, even if taxes were paid. The IRS can assess failure-to-file penalties in some cases if they don't receive a valid signed return, regardless of payment.
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