Make sure you're also checking if you're eligible for the Lifetime Learning Credit if the American Opportunity Credit doesn't work for your situation! It's worth looking into both to see which one benefits you more.

Hey Nia, I totally get the anxiety you're feeling - I went through something very similar last year! The good news is that you're being responsible by trying to get this right, and the IRS really isn't as scary as it seems for situations like yours. A few things that might help ease your worry: First, you can absolutely set up a payment plan with the IRS if you can't pay the full amount at once. They offer installment agreements that can be as low as $25-50 per month depending on your situation. You can even apply online through their website. Second, regarding last year's return - while it's true your dad should have reported that $3,500 in excess scholarship income, the fact that you're correcting things going forward shows good faith. If you do decide to amend last year's return (which is generally the right thing to do), you can include a statement explaining that you were unaware of the scholarship taxation rules and are voluntarily correcting the error. Also make sure you're maximizing any education credits you qualify for - the American Opportunity Credit could potentially offset a significant portion of what you owe. Don't let the anxiety paralyze you - take it one step at a time and remember that the IRS works with people who are trying to comply with tax law.

Has anyone else noticed that syndication sponsors are being super aggressive with cost segregation studies lately? I just got one that claimed 85% bonus depreciation in year 1 on a property that's clearly not that front-loaded with short-life components. Makes me nervous about audit risk.

This is a great question that many syndication investors struggle with! The short answer is yes - you can generally use your $135k in depreciation losses from the new syndication to offset your $135k in Section 1231 gains from the sales, assuming both are passive activities for you as an LP. Here's what's happening: Your new syndication's cost segregation study creates passive activity losses, while your sale gains are likely passive income since you weren't materially participating in those properties either. The passive activity loss rules allow these to offset each other within the same tax year. A few important considerations: 1. Make sure both activities qualify as passive (sounds like they do as an LP) 2. Be aware that some of your gain might be depreciation recapture taxed at 25% rather than capital gains rates 3. Any excess losses get suspended and carried forward to future years Regarding the "benefit" of upfront depreciation - it's not just about offsetting rental income. It creates valuable tax deferral, and if you have suspended losses when you eventually sell a property, those losses can offset ANY type of income (not just passive). This is why cost segregation studies are so powerful for wealth building through real estate. I'd definitely recommend working with a CPA who specializes in real estate syndications to make sure you're maximizing these opportunities properly!

I noticed nobody mentioned that sometimes the two numbers in Box 19 could be from the same locality but for different time periods if you moved during the year. In my case, one was for Jan-July and the other was Aug-Dec after our city slightly changed their local tax rate mid-year. Make sure you check if that's your situation before you assume they're from different localities.

I'm dealing with this exact same issue right now! I have two different local taxes in Box 19 - one from the city where I work and another from the township where I live. After reading through all these suggestions, I tried looking more carefully in TaxSlayer and finally found the "Local Taxes" section that wasn't obvious at first. For anyone still struggling with this: after you enter your main W-2 information, there's a section specifically for local taxes where you can add multiple entries. Don't try to add it as another state like I initially did - that will mess up your calculations completely. Each local tax needs to be entered separately with the exact locality name as shown on your W-2. I'm still in the process of completing mine, but at least now I know where to enter the information correctly. Thanks to everyone who shared their experiences - this thread was way more helpful than TaxSlayer's help documentation!

6 Is anyone using TurboTax instead of H&R Block? I'm having the exact same issue with negative foreign tax values in TurboTax and wondering if there's a similar fix.

I've been dealing with international dividend taxation for several years now, and I wanted to add some clarification that might help others avoid confusion. The foreign tax credit is definitely worth claiming - it's essentially getting back taxes you've already paid to another country. The $300 threshold for the simplified method ($600 if married filing jointly) is per tax year, so if you're consistently investing in international stocks, you'll want to track this annually. One thing I learned the hard way: keep good records of your foreign tax credits. If you can't use the full credit in one year because your US tax liability is lower than the foreign taxes paid, you can carry the unused portion forward for up to 10 years. But you'll need Form 1116 for carryovers, even if the original amount was small enough for the simplified method. Also, make sure the foreign taxes you're claiming actually qualify - they need to be income taxes, not other types of foreign taxes or fees. The 1099-DIV should clearly show "Foreign Tax Paid" in Box 7 if it qualifies for the credit.

One thing to watch out for when comparing platforms: some will advertise a big refund upfront but then hit you with fees at the very end of the process. I've had situations where Platform A showed a $50 higher refund than Platform B, but then charged $75 more in filing fees, making it actually worse overall. Make sure you go all the way to the payment screen on each platform to see the TRUE final amount you'll receive after all fees are deducted!

Great question! I've been doing this for years and it's totally allowed. The IRS only cares about the one return you actually submit - they have no visibility into how many different software programs you used to prepare it. I'd definitely recommend trying both TurboTax and H&R Block for your situation since you have both W-2 and freelance income. In my experience, TurboTax tends to be more user-friendly for self-employment stuff and walks you through business deductions really well. H&R Block sometimes catches things differently though. A few tips from someone who does this annually: - Keep a spreadsheet of all your numbers so you enter them exactly the same way in each platform - Don't just look at the refund amount - factor in the filing fees too since they can vary significantly - Pay attention to how each platform categorizes your freelance expenses, as that's usually where the biggest differences show up You're being smart about maximizing your refund. Just remember to only hit "submit" on whichever platform gives you the best net result after fees!