I went through this exact situation in 2022. Had a $4,700 refund coming, but when it hit my account it was only $1,200. Called the TOP number in a panic and found out I had defaulted student loans from a program I never completed. The kicker? I had moved three times and never received any of the notices they claimed to have sent. I immediately contacted the Department of Education, got on a rehabilitation plan (9 monthly payments), and successfully got my loans out of default. This year my full refund came through without any issues. The most frustrating part was that if I had known about the potential offset beforehand, I could have addressed it BEFORE filing my taxes. There are options like loan rehabilitation that can prevent the offset, but they only work if you start them before the offset occurs.

I just want to emphasize how important it is to act quickly if you discover you have offsets pending. I learned this the hard way when I found out about a state tax debt that was going to offset my federal refund. The key thing people don't realize is that some agencies (especially for student loans) offer "offset bypass" programs if you contact them BEFORE the offset happens. For example, if you can set up a payment plan or loan rehabilitation program with the Department of Education before your refund is processed, they can often remove you from the offset list for that year. I called the TOP hotline in January, found out about a $2,800 debt, immediately contacted the creditor agency, and was able to negotiate a payment plan that allowed me to keep my full refund. But this only works if you're proactive - once the money is already taken, your options become much more limited. So definitely make that call ASAP, and if you do find offsets, don't just accept it as inevitable. Contact the creditor agency right away to see what arrangements you can make. Time is absolutely critical here.

One thing I do every year is use the official IRS Free File lookup tool to see what options I qualify for: https://apps.irs.gov/app/freeFile/ Even if you make too much to qualify for free filing, it's a good starting point for finding legitimate providers since they all have to meet IRS security standards to be part of the program. The bottom line is if a site is too small to be listed anywhere on IRS.gov in some capacity, I personally wouldn't trust them with my SSN and financial data, no matter how cheap they are. Not worth the risk of identity theft!

Great advice in this thread! I'd also recommend checking the Better Business Bureau rating and looking at recent complaint patterns. Sometimes a company can be IRS-authorized but still have terrible customer service or billing practices. One red flag I've learned to watch for: sites that require you to enter all your personal info (SSN, bank details, etc.) before showing you the final price breakdown. Legitimate services should give you a clear fee structure upfront based on your tax situation, not hold pricing hostage until you've already committed your data. Also worth noting - if you're military, many of the major tax prep companies offer free filing regardless of income level. VITA (Volunteer Income Tax Assistance) programs are another free option if you have a straightforward return and want in-person help from IRS-certified volunteers.

I might be in the minority, but for my first year with a partnership, I just bit the bullet and hired a CPA. Cost me about $800, but they handled all the K-1 generation, made sure our allocations were correct, and found deductions I would have missed. Plus they showed me exactly what they did so I could potentially DIY in future years. Sometimes paying a professional for year one is worth it just for the peace of mind and education. My CPA literally walked me through each form so I understood what was happening.

As someone who just went through this exact process for the first time, I can share what worked for me. I ended up using a hybrid approach - I used TaxAct Business to prepare the 1065 return (which automatically generated the K-1s), but before jumping in, I spent time understanding our partnership agreement and how different income/expense categories should be allocated. The key insight I wish someone had told me earlier: the K-1 forms are literally just printouts from your business tax return software. You don't create them separately - they're generated automatically once you complete Form 1065 with all your partnership details and allocations entered correctly. For a first-timer, I'd recommend either: 1) Upgrade to business tax software and take your time working through it methodically, or 2) Pay a professional for year one but ask them to walk you through the process so you understand it for next year. The worst thing you can do is guess on partnership allocations since the IRS scrutinizes these pretty carefully. Also, definitely file for an extension if you're running short on time - partnerships have a March 15 deadline, but an extension gives you until September 15 to get everything right.

Has anyone considered the non-tax implications of renouncing citizenship? My cousin did this in 2019 (not for crypto but for business reasons). He moved to Singapore and gave up his US passport. Now his parents are aging and he's having massive issues with just visiting them in the US. Getting visas is complicated, and there's always anxiety about being denied entry. Plus he can only stay for limited periods. He says if he'd understood the practical and emotional impact, he would have explored other tax strategies first. There's also the permanence factor - once you renounce, it's extremely difficult to ever get citizenship back. What if the crypto market crashes? Would giving up your passport still be worth it?

This is such a timely discussion for me. I've been dealing with crypto taxes for three years now and it's gotten increasingly complex as my portfolio has grown. The renunciation route honestly crossed my mind briefly when I saw my tax bill last year, but reading these responses really puts things in perspective. The emotional and practical costs that people are mentioning - visa complications, family separation, permanent decisions - these are things you can't put a dollar value on. I think I was so focused on the immediate tax savings that I wasn't considering the lifetime implications. The Puerto Rico option that Isabella mentioned sounds particularly interesting since you keep your US citizenship. Has anyone here actually gone through the Act 60 process? I'm curious about the practical aspects of establishing residency there - is it just about spending 183 days per year, or are there other requirements like buying property or starting a business? Also really appreciate the recommendations for taxr.ai and the various tax strategies mentioned. It sounds like there are quite a few legitimate ways to optimize crypto taxes without taking such drastic measures. Sometimes the obvious solution isn't always the best one.

one thing nobody mentioned - a lot depends on which states r involved!! some states r SUPER aggressive about claiming residents (looking at u California and New York) while others barely care. where r u now and where u thinking of going?? that makes a huuuge difference in how careful u need 2 be!!

You're smart to think about this ahead of time! One important thing to add - even if you maintain residency in your home state, you'll still need to be aware of the temporary state's rules for non-residents earning income there. Some states have "convenience of employer" rules where they'll tax remote work income even if you're just temporarily present. Also, consider setting up a paper trail that shows your intent to return home. Keep paying bills at your parents' address (even if it's just a small utility or subscription), maintain memberships in local organizations, keep your car registered in your home state, etc. The more ties you maintain, the stronger your case for keeping your original state residency. And definitely keep that detailed calendar someone mentioned - not just for tax purposes, but because if you do need to file as a part-year resident anywhere, you'll need to know exactly how much income was earned in each state during your time there.