Has anyone used TurboTax to handle this specific situation? I use TurboTax Premier and am wondering if it has a way to handle this properly.

I went through this exact same situation with IBKR prediction contracts last year and can confirm the Schedule 1 approach works perfectly. The key is being very clear in your documentation. I reported the full $23,000 on Schedule 1, Line 8i "Other Income" with the description "IBKR 1099-MISC Prediction Contract Proceeds." Then on the very next line, I entered -$22,350 with the description "Cost Basis Adjustment - IBKR Prediction Contracts per 1099-MISC Instructions." I also attached a one-page statement explaining that IBKR reports gross proceeds on 1099-MISC but doesn't account for cost basis, referencing their own documentation that instructs taxpayers to make this adjustment. No red flags, no audit, no problems. The IRS computers can easily see that you're reporting what matches the 1099 they received while properly calculating your actual taxable gain. Keep all your IBKR statements showing the initial purchase and final sale amounts. This is actually a very common issue with prediction market brokers, so the IRS is familiar with it.

Has anyone successfully claimed both the lifetime learning credit AND used 529 funds in the same year? My wife is in grad school and we're trying to figure out the most tax-efficient way to pay for it since the AOTC isn't available for graduate education.

This is exactly the situation I was in last year! The key thing to remember is that you can't use the same dollar for multiple tax benefits, but you CAN strategically allocate your expenses. Since your 529 covered $7,800 in tuition, you can't claim the tuition deduction (Form 8917) on that amount. However, if you had ANY other qualified education expenses that you paid out-of-pocket - like required textbooks, lab fees, course materials, or even additional tuition beyond what the 529 covered - you can absolutely use those for the American Opportunity Tax Credit. The AOTC is usually much more valuable than the tuition deduction anyway (up to $2,500 credit vs. up to $4,000 deduction), so focus on maximizing that if you have any out-of-pocket expenses. Even if you only spent $500 on books, that could still get you a $500 credit through the AOTC. Make sure to keep all your receipts and document which expenses were paid by which source. The IRS is pretty clear about this in Publication 970 - you just need to show that you're not "double-dipping" on the same expenses.

I went through almost the exact same situation last year! The "double-dipping" issue is super common, especially when dental insurance takes a while to process claims. Here's what I learned: First, don't stress too much about the card being locked - it's really just an administrative thing and won't hurt your credit or future FSA access. When mine got locked, I actually found manual reimbursement wasn't that bad. Most administrators have mobile apps now where you can just snap photos of receipts and submit claims instantly. For spending down your $270 quickly, here are some items that worked well for me: - Electric toothbrush + replacement heads (easily $100-150) - First aid kit restocking (bandages, antiseptic, pain relievers) - Compression socks if you're on your feet a lot - Blue light glasses if you work on computers - A year's supply of any vitamins your doctor has recommended One trick I discovered - if you have any recurring prescriptions, ask your pharmacy if they can fill a 90-day supply instead of 30-day. That can quickly eat up remaining funds and you'll need the medication anyway. The tax situation isn't as scary as it sounds either. You'll just report it as additional income, but since it was originally pre-tax money, you're basically just paying the taxes you would have paid anyway. Keep all your documentation though - the FSA administrator should provide you with the proper tax forms. You're handling this the right way by addressing it proactively rather than just hoping it goes away!

I've been through a very similar FSA situation and wanted to share what worked for me. The key thing to remember is that this is actually a pretty common issue - FSA administrators deal with these "double-dipping" situations all the time, especially with dental and vision claims where insurance processing can be delayed. For your remaining $270, here are some tried-and-true options that can help you spend it down quickly: - Schedule a comprehensive eye exam and order backup glasses or contacts - Stock up on FSA-eligible OTC items like pain relievers, allergy medications, and first aid supplies - Consider a ergonomic assessment or physical therapy consultation for any work-related aches - Purchase a quality thermometer, blood pressure monitor, or pulse oximeter - Get a professional teeth cleaning or fluoride treatment if you're due Regarding the locked card situation - I actually found it liberating in a way. The manual submission process forced me to be more organized about tracking expenses, and most administrators process reimbursements pretty quickly (usually 5-7 business days with direct deposit). The tax implications really aren't that scary. You'll just report the reimbursed amount as income and pay your normal tax rate on it. No penalties or complications. Just keep good records of everything for your tax preparer. One tip: if your plan has a grace period (check with HR!), you might actually have until August to use those funds even after the May plan year ends. That would take a lot of pressure off your timeline. You're handling this responsibly by addressing it head-on rather than ignoring it. These situations always seem more overwhelming than they actually turn out to be!

Has anyone actually had success getting their credits back after filing Form 8862? My credits were denied two years ago, I filed 8862 last year, and still got rejected again with no clear explanation.

I went through something similar with my brother's return last year. The IRS reduced his refund and he needed to file Form 8862 the following year. One thing that really helped was getting a copy of his account transcript from the IRS website - it shows much more detail about exactly what they adjusted and why. The transcript has specific transaction codes that explain the adjustments, which is way more informative than the basic notice they send. Also, make sure your sister keeps excellent records going forward. The IRS tends to scrutinize returns more closely once someone has been flagged for these credits. Things like school enrollment records, medical appointments, and utility bills in her name at the same address as the kids can all help establish that the children lived with her for more than half the year. The good news is that filing Form 8862 doesn't prevent you from claiming the credits again - it just requires extra documentation and verification. Just be thorough and honest when completing it.

Just wanted to chime in about the triathlon training aspect since that's important to you. I'm an EA with my own practice and also train for marathons. The key is setting boundaries with clients. I made it clear from the beginning that I don't work weekends (except maybe a few during peak tax season) and I block off specific training times in my calendar that are non-negotiable. You absolutely can maintain athletic pursuits while being an EA - just structure your practice intentionally!

As someone who's been working in tax preparation for about 3 years now, I can definitely echo what others have said about the EA certification being very manageable while maintaining work-life balance. I passed all three parts in about 8 months while working full-time and training for a half-marathon. One thing I'd add is that your background as a financial advisor will actually be really helpful for the EA exam, especially the individual tax section. You already understand investment products, retirement accounts, and capital gains/losses, which gives you a solid foundation. The H&R Block program is a good start, but I'd recommend supplementing with either Gleim or PassKey EA review materials. The exam tests much deeper knowledge than basic tax prep. For the triathlon training aspect - I actually found that having a structured study schedule helped me stay disciplined with both my training and exam prep. I'd study early mornings before training sessions, which kept me focused and efficient with both activities. One practical tip: consider taking the exams in order (Part 1: Individuals, Part 2: Businesses, Part 3: Representation) rather than all at once. This spreads out the study load and lets you apply what you're learning in real client situations if you're already doing some tax work.