That's a good point I hadn't considered. Do you know if California has state inheritance taxes? That's where my uncle's house was located.

California doesn't have a separate inheritance tax, so you don't need to worry about that specific issue. California generally follows the federal approach regarding the step-up basis for inherited property. However, if you're not a California resident but the property was located there, you might need to file a non-resident California return to report the sale. California can tax non-residents on income derived from California sources, which could include capital gains from property located within the state.

I did! I received about $75k from my mother's estate in 2023 and had to make an estimated payment. The key is whether there was a capital gain between the date of death and the sale date. In my case, the house appreciated about $30k between her death and when it sold 8 months later. My share of that gain was enough that I needed to make an estimated payment to avoid underwithholding penalties.

Omg yes! I thought I was just being dense but the instructions are so much worse this year. I actually called my tax preparer friend to explain the Cash App reporting requirements and she was like "yeah the IRS made everything more confusing this year for some reason.

Right?! I'm glad it's not just me! I think they rewrote a bunch of the instructions to account for the new tax law changes, but in the process they made simple things like understanding your standard deduction way more complicated than necessary. I miss the clear flowcharts they used to have. I think the Cash App reporting is especially confusing because they don't clearly explain the difference between personal transfers and business income.

Yes, they do report to the IRS, but there's a threshold. For 2024 taxes (filed in 2025), you should receive a 1099-K if you received more than $5,000 in payments. But even if you don't receive a form, you're still legally required to report all income, even if it's below the reporting threshold.

I did check both parts, and all of our kids were qualifying children under 17, so we didn't have any "other dependents" to claim. And we didn't receive any advance payments in 2021 that would affect the 2022 return - we actually opted out of those. What's confusing me is that with 4 kids, we should have gotten the full $8,000 ($2,000 × 4), but when I look at the actual credit amount on our Form 1040, it's significantly less. I'm wondering if maybe our tax software or preparer made a calculation error on Form 8812.

In that case, I would recommend looking specifically at the calculations on Form 8812, particularly around the refundable portion. For 2022, the refundable portion was limited to 15% of your earned income above $2,500. So if somehow your "earned income" was calculated incorrectly (which is different from AGI), that could limit the refundable portion. Another thing to check is if you had any other non-refundable credits that used up your tax liability, potentially limiting how much of the non-refundable portion of the CTC you could use.

I used TurboTax to amend my 2022 return specifically for Form 8812 issues. It was pretty simple - they walk you through which forms need to be changed and calculate everything for you. Just make sure you have a copy of your original return handy because you'll need to enter some of the original information first before making changes.

I thought it was just 4 years total regardless of what "year" you're in academically? My advisor told me as long as you haven't claimed it 4 times already you can still get it.

Your advisor is partially right, but there's more to it. You can claim AOTC for up to 4 tax years, but there's also a requirement that you must be enrolled in one of the first 4 years of post-secondary education (what the IRS considers your freshman through senior years). If you're in what would academically be considered your 5th year or greater (like if you're working on a second bachelor's or have been in school longer than the typical 4-year program), you generally wouldn't qualify regardless of how many times you've claimed it before. The Lifetime Learning Credit doesn't have this restriction, which is why it's available for graduate students and lifelong learners.

How do the 1098-T forms work with this? Mine always seems to have different amounts than what I actually paid because of timing of the payments vs when classes start.

I hadn't considered a Certified Acceptance Agent. Is there any downside to using one compared to submitting directly? Does it take longer to process when going through an agent?

There's really no downside in terms of processing time - in fact, it can be faster because CAAs reduce the likelihood of rejections due to documentation errors. The IRS processes the application the same way regardless of submission method. The only real downside is the cost. Most CAAs charge between $200-300 for their service, which includes document verification and submission. But considering the hassle of potentially having to resubmit if something goes wrong (plus the risk of sending original documents through the mail), many find it worthwhile. In my experience, using a CAA actually shaved weeks off the process because everything was submitted correctly the first time.

From my understanding, you need the current year's Form 1098, not the previous year's. That's what my tax preparer told me. Maybe that's why it was rejected?

You actually need the most recently issued Form 1098, which would typically be from the previous tax year. When applying early in the year (like now for 2025 filing season), you'd use the 2024 mortgage interest statement since the 2025 one wouldn't be available yet. The IRS specifically wants to see that you have an ongoing mortgage interest situation that creates a tax need. If you're applying mid-year, you might also include recent mortgage statements showing continued interest payments. The key point is demonstrating a continued tax purpose for needing the ITIN, not just a one-time situation.