Just wanted to add a few important points that might help maximize your education tax benefits! First, make sure you're not double-dipping on expenses. If your parents are claiming you as a dependent, they might be eligible for the education credits instead of you - this is something to coordinate with them since only one person can claim the same student's expenses. Second, timing matters! For the American Opportunity Credit, you can only use it for four tax years per student, so if you're planning to be in school longer, you might want to strategize which years to claim it versus saving it for when your expenses are highest. Also, don't forget about your 1098-T form from your school - this shows the tuition and fees paid to the institution and is required documentation for claiming education credits. Sometimes the amounts on the 1098-T don't match what you actually paid due to timing differences, so keep your own payment records too. One more tip: if you have any scholarships or grants, those might reduce the amount of qualified expenses you can claim for credits. The IRS has specific rules about how to handle "tax-free" educational assistance, so factor that in when calculating your eligible expenses. Given all the complexity around education tax benefits, it's definitely worth double-checking everything or getting help to make sure you're getting the maximum benefit you're entitled to!

Great thread everyone! As someone who works in tax preparation, I wanted to add a few practical tips that might help you navigate these education expenses more effectively. First, keep a dedicated folder (physical or digital) for ALL your education-related receipts and documentation throughout the year. This includes not just tuition receipts, but also syllabi that mention required equipment, emails from professors about mandatory software, and any correspondence about online class requirements. Having everything organized makes tax season much less stressful. Second, for those computer and internet expenses everyone's discussing - the key phrase the IRS looks for is "required for enrollment or attendance." If your program requires specific technology and you can document that requirement, you have a much stronger case for claiming it as a qualified expense. One thing I haven't seen mentioned yet is that if you're working while in school, you might also qualify for work-related education expenses as a separate deduction if the education maintains or improves skills needed for your current job. This is different from the education credits and could provide additional benefits in some situations. Also, consider whether taking the standard deduction versus itemizing is better for your overall tax situation. The education credits work with either approach, but other education-related expenses might only help if you're itemizing. The bottom line is that education tax benefits can be quite valuable, but the rules are complex and change frequently. When in doubt, it's worth consulting with a tax professional to make sure you're maximizing your benefits while staying compliant with IRS rules.

When my wife needed an ITIN (she's from Brazil, we live there), we used a Certified Acceptance Agent in our country instead of mailing everything to the IRS. Made the process way easier because they verified all her documents locally so we didn't have to send originals or certified copies through international mail. The IRS website has a directory of acceptance agents worldwide. Might be worth checking if there's one near you: https://www.irs.gov/individuals/international-taxpayers/acceptance-agents-1

I went through this exact situation last year! As others mentioned, you definitely need to get your wife an ITIN even when filing separately - it's required for the spouse field on your tax return. A few practical tips from my experience: 1. Don't stress about the "date of entry" field being blank - just attach a brief statement explaining she's never entered the US 2. Make sure to get a certified copy of her passport (not just a regular photocopy) 3. The process took about 12 weeks for us, so plan accordingly One thing I wish I'd known earlier: you can actually request expedited processing if you're facing a hardship due to the delay. We didn't know about this option and just waited the full processing time. Also, keep copies of everything you send - the IRS sometimes requests additional documentation and it helps to have everything on hand. The good news is once you get through this first year, you'll have her ITIN for all future tax filings. It's a pain initially but worth getting it sorted out properly.

Had the same thing happen to me last year! The letter can look a bit confusing at first but it's actually good news. Mine was from overpaying estimated taxes. Just make sure the amount matches what you think you overpaid, and if everything looks right, sit tight - the refund should come automatically. No action needed on your part unless there's an error.

Just want to add that if you're curious about the exact reason for the credit, you can also request a free account transcript from the IRS website or by calling their automated line. It'll break down all the transactions on your account so you can see exactly where the credit came from - whether it was estimated payments, withholding adjustments, or credits like the Child Tax Credit. Sometimes it helps to understand the "why" even if you don't need to take action!

Just wanted to add another consideration that might help with your situation - timing your repayment strategically within the tax year. Since you mentioned having capital gains and other income this year, you might want to coordinate the timing of your LTD repayment with other tax planning moves. For example, if you have control over when you realize additional capital gains or take other distributions, you could potentially time the repayment to maximize the benefit of the Section 1341 credit. The credit is calculated based on your prior years' tax situation, but how much it helps your current year depends on your current tax bracket. Also, don't forget to consider state tax implications. Some states don't recognize the federal claim of right credit, so you might need to handle the repayment differently for state tax purposes. This could affect whether it makes sense to itemize deductions versus taking the credit route. Given the complexity and the substantial amounts involved ($76k repayment plus $11k in taxes already paid), I'd really recommend getting a consultation with a tax professional who has experience with disability insurance repayments. The potential tax savings from getting this right could easily justify the cost of professional advice.

I've been following this discussion and wanted to add a few additional considerations that might help with your situation: 1. **Documentation timing**: Make sure you request detailed statements from your LTD carrier showing exactly what periods each payment covered. Sometimes these payments don't align perfectly with calendar years, which can complicate the tax credit calculation. 2. **SSDI taxation going forward**: Since you mentioned ongoing SSDI payments, be aware that these may also become partially taxable depending on your total income (including pension and capital gains). The provisional income test could push some of your SSDI into taxable territory, so factor this into your overall tax planning. 3. **Medicare implications**: With the substantial income changes you're experiencing, make sure to consider how this affects your Medicare premiums if you're enrolled. The Income-Related Monthly Adjustment Amount (IRMAA) could apply based on your modified adjusted gross income. 4. **Record retention**: Keep all documentation related to this repayment situation for at least 7 years. The IRS may have questions about the claim of right credit calculation, especially given the large amount involved. The complexity of your situation really does warrant professional help, but armed with all the great information in this thread, you'll be well-prepared for those conversations. Good luck with getting this sorted out!

I want to echo what others have said about avoiding the rental route - it's absolutely not worth the risk. As someone who works in tax compliance, I've seen the IRS come down hard on these arrangements, and the penalties can be career-ending. However, I do want to offer some hope for your timeline. The IRS has actually streamlined their EFIN processing significantly for the 2025 season. If you submit a complete, error-free application now, you're looking at closer to 4-5 weeks rather than the traditional 6-8 weeks. The key is making sure everything is perfect the first time - any errors or missing documents will reset your timeline. For the PTIN, definitely apply today. It's straightforward and you'll have it immediately. In the meantime, consider reaching out to local tax preparation offices, enrolled agents, or CPAs who might need seasonal help. Many are actually looking for qualified preparers right now and would be open to a legitimate subcontractor arrangement. This gives you income, experience, and a legal way to prepare returns while your own credentials process. The temporary partnership route that others mentioned is really your best bet. It's completely legal, gives you practical experience, and positions you well for when your own EFIN comes through. Don't let impatience derail what could be a successful long-term career!

As someone who just went through the EFIN application process myself, I want to add that the IRS has also improved their communication this year. You'll actually get email updates at key stages of your application review, which helps eliminate the guesswork about timing. One thing I learned the hard way - when gathering your business documentation, make sure your business address on your state registration exactly matches what you put on the EFIN application. I had to resubmit because my state filing used "Street" while my EFIN application used "St" and that small difference caused a delay. Also, if you're planning to work from home initially, the IRS now accepts a simple business use statement for your home office rather than requiring complex documentation. This has streamlined things significantly for solo practitioners. The partnership route everyone's suggesting really is the way to go. I reached out to about 6 local preparers and 4 were interested in some kind of arrangement. Most were looking for 70/30 or 60/40 splits depending on who provides the software and handles the administrative work. It's actually a win-win since many established preparers want help during busy season but don't want permanent employees. Don't give up on starting this season - there's definitely still time to do this properly!