One thing nobody's mentioned yet - is there any chance you paid for your Spring 2023 semester during 2022, even though you didn't attend? Sometimes schools bill for the next semester in December of the previous year. If you DID pay any qualified education expenses for undergraduate studies in 2022 (even if you didn't attend those classes), you might have a case for AOTC. The timing of PAYMENT is what matters for tax purposes, not when you attended classes. Worth checking your bank/credit card statements from late 2022 to see if you made any payments to your undergrad institution!

This is a really complex situation that highlights how tricky education credits can be! Based on what you've described, your uncle's tax advisor is likely correct. The key issue is that once you've completed your undergraduate degree (which you did in December 2022), the IRS generally considers your "first four years of higher education" to be complete, regardless of whether you actually took four full academic years to finish. The fact that your only 1098-T for 2022 has the graduate student box checked is a major red flag for AOTC eligibility. The IRS specifically excludes graduate-level coursework from AOTC, and medical school is definitely considered graduate education. However, don't despair! You should absolutely look into the Lifetime Learning Credit instead. While it's not as generous as AOTC (max $2,000 vs $2,500, and it's non-refundable), it's designed exactly for graduate students and continuing education. You can claim LLC for qualified tuition and fees paid for your medical school courses. The LLC is calculated as 20% of up to $10,000 in qualified education expenses, so if you paid $10,000+ in medical school tuition/fees in 2022, you could get the full $2,000 credit. Make sure to keep all your receipts and documentation for medical school expenses - books, lab fees, and required course materials may also qualify.

2 Has anyone tried TaxSlayer? I'm also looking to switch from TurboTax and trying to understand all the options. FreeTaxUSA seems popular here but I'm wondering how it compares to other alternatives.

I made the switch from TurboTax to FreeTaxUSA last year and it was absolutely the right decision. Your situation sounds very similar to mine - W-2 plus some freelance income and a mortgage. FreeTaxUSA handled everything perfectly. The Schedule C for freelance work was straightforward, and all the mortgage interest deductions were included without any issues. The interface isn't as flashy as TurboTax, but honestly, I found that refreshing - no constant upselling or trying to trick you into expensive add-ons. The $15 state filing fee is so much better than what I was paying with TurboTax. And their customer support, while email-only, has been reliable when I've needed help. One tip: if you do switch, you can import your prior year return from TurboTax which makes the transition really smooth. FreeTaxUSA will automatically carry forward relevant information and ask you about any changes. For someone with your tax situation, I'd say FreeTaxUSA is definitely worth trying. The money you'll save compared to TurboTax is significant, and the functionality is basically the same for straightforward returns like yours.

Quick question about S-Corp basis - does anyone recommend a specific spreadsheet template for tracking this monthly? My accountant only updates it annually and I want to monitor things throughout the year so I don't accidentally create a basis issue with my distributions.

Amy, your understanding is mostly correct! Let me clarify the key points that seem to be causing confusion: 1. **Basis calculation**: Yes, your basis increases monthly by your share of S-Corp income ($9,750) and decreases by distributions of the same amount. So if you distribute all profits monthly, your basis essentially stays at your initial $125. 2. **Taxation vs. distributions**: This is where many people get confused. The $9,750 monthly profit is taxable to you regardless of whether you distribute it or not. You pay taxes on it through quarterly estimated payments. The distribution itself doesn't create additional taxable income - you've already been taxed on the underlying profit. 3. **Tax-free distributions**: You're right that you could withdraw your initial $125 investment tax-free since that's your basis from contributed capital. But ongoing profits are always taxable when earned by the S-Corp, even if you don't distribute them immediately. Think of it this way: S-Corps are "pass-through" entities, meaning all profits flow through to your personal tax return whether you take the money out or not. The basis tracking just ensures you don't get taxed twice on the same income when you eventually do take distributions. Your monthly approach of distributing $9,750 after paying yourself the $11,250 salary is perfectly fine and very common for S-Corp owners.

Those codes are pretty standard when the IRS needs to review something! Code 150 means they received and processed your return, 570 is just a temporary hold (usually for verification), and 971 means they're mailing you a notice explaining what they need. I had the exact same sequence last year and it took about 4 weeks total to clear up. The notice I got was just asking me to verify my identity online through ID.me, which was actually pretty quick once I got around to doing it. Try not to stress too much - these holds are super common this year and most resolve without any major issues. Just keep an eye on your transcript updates (they refresh on Fridays) and watch for that notice in the mail! 📬

I went through this exact situation last year! Those codes are actually pretty routine - 150 means your return was processed, 570 is a temporary refund hold, and 971 indicates they're sending you a notice explaining why. In my case, I got a CP05 notice about 10 days after the 971 date asking for identity verification. Once I completed the ID.me process (took about 20 minutes), my refund was released within 2 weeks. The whole thing from start to finish was about 5 weeks. I know the waiting is stressful when you really need the money, but try to stay patient. Check your transcript every Friday for updates and keep an eye out for that notice in the mail. Most of these holds resolve pretty smoothly once you provide whatever verification they need. Hang in there! 💪

Something important to consider that nobody's mentioned: Section 179 deduction vs. regular depreciation. If you choose actual expenses, you could potentially deduct the business portion of your vehicle in year one with Section 179 instead of spreading it out over several years. BUT this is a terrible idea if you're not going to continue using the vehicle for business! The recapture would hit you all at once. For someone who only drove 4K miles and doesn't plan to continue, standard mileage is almost certainly the better long-term strategy. Also, remember that with standard mileage, depreciation is already built into the rate (currently $0.67/mile), along with gas, maintenance, etc. You're still getting depreciation benefit without the recapture headaches.

Based on everything discussed here, I'd strongly recommend going with the standard mileage rate for your situation. Here's why: You drove 4K miles over 6 months and don't plan to continue - this is exactly the scenario where standard mileage shines. That $2,400 deduction (4K miles × $0.67) is clean, simple, and won't create future tax complications. The actual expenses method showing $4,800 might look appealing, but consider these red flags for your situation: - You'd be locked into actual expenses forever for this vehicle - Depreciation recapture when you sell the car could wipe out your current savings - The record-keeping burden is significant for just 6 months of driving - You bought the car in 2019, so you've already taken personal depreciation The standard mileage rate already includes depreciation, gas, maintenance, insurance, and other operating costs. For a part-time driver who's stopping, it's designed to be fair without creating future headaches. Your tax software is doing the math correctly, but it's not considering the long-term implications. Sometimes the smaller, cleaner deduction is the smarter choice. You'll thank yourself later when you sell the car and don't have to deal with depreciation recapture calculations.