You're absolutely right to be concerned about this! The tax treatment of grant refunds can be tricky, but here's what you need to know: The $2,350 refund is partially taxable. The portion you used for rent (room and board) is definitely taxable income since housing costs aren't qualified education expenses. For the textbooks, it depends on whether they were specifically required by your courses - if they're listed on your syllabi as required materials, that portion would be tax-free. Since you're claimed as a dependent, you'll still need to report the taxable portion on your own tax return (if you file one) as "Other Income" on Schedule 1. My advice: Contact your school's financial aid office and ask for a detailed breakdown of how your grant was applied and refunded. Many schools can provide this information, which will make your tax filing much easier. Also, gather your course syllabi to document which books were truly required. Don't panic about this - it's a very common situation for students with substantial grants. The key is just being accurate about what portion was used for qualified vs. non-qualified expenses. Getting it right now will save you from potential issues with the IRS later!

Hey Kayla! I totally understand your confusion - I went through this exact same situation with my grant refunds last year and it was so stressful trying to figure out what I needed to report. From what you've described, here's the breakdown: The portion of your $2,350 refund that went toward rent would definitely be considered taxable income since housing/room and board are non-qualified education expenses. For the textbooks, you'll need to check if they were listed as "required" on your course syllabi - if so, that portion would be tax-free. If they were just "recommended" or optional study materials, then that portion would also be taxable. The good news is that this is super common for students with substantial grants, so you're definitely not alone in dealing with this! Here are a few practical steps that helped me: 1. Contact your financial aid office and ask for a detailed breakdown of how your grant was applied and refunded - some schools can provide forms that categorize everything by expense type 2. Gather all your course syllabi to document which books were actually required vs. recommended 3. Keep receipts for everything if you haven't already Since your parents claim you as a dependent, you'll still need to report the taxable portion on your own return (if you file one) as "Other Income" on Schedule 1. The dependency status doesn't change whether the grant income is taxable - just affects which return it gets reported on. Don't stress too much about this! It's way better to figure it out now than get a surprise letter from the IRS later. You've got this!

The IRS website says VITA helps people who make $64,000 or less. That's referring to AGI, not gross. The whole point of VITA is to help lower-to-moderate income folks who can't afford paid preparers. Your situation with the retirement contributions bringing your AGI way down is exactly how the system is supposed to work! The only concern I'd have is some VITA sites might struggle with multiple investment accounts depending on how complicated they are.

That's frustrating that you experienced that! While the official IRS guidelines for VITA are based on AGI, you're right that individual sites sometimes apply their own screening criteria for practical reasons. Some sites do a quick gross income check during intake because it's faster than calculating AGI on the spot. If someone gets turned away from one VITA site due to gross income, I'd recommend trying another location or calling ahead to explain your situation. Most sites should honor the official AGI-based eligibility once they understand that your retirement contributions bring you well under the threshold. The IRS training materials are clear that it's supposed to be AGI, but implementation can vary by site unfortunately.

I'm 24 and just did my own taxes for the first time using TurboTax. Is it normal that it took me like 3 whole days to figure it out??? Everyone says it's "easy" but I kept second-guessing everything.

Don't feel bad about taking your time - doing taxes right is way better than doing them fast! I've been doing my own for about 8 years now and still sometimes spend a weekend on them when I want to make sure I'm not missing anything. The second-guessing is totally normal, especially for deductions. I keep a little tax folder throughout the year now where I throw receipts and documents as I get them. Makes tax time way less stressful when everything's already organized. Pro tip: if you're using TurboTax, they have a "review" feature at the end that double-checks everything and explains why certain things were included/excluded. Really helped build my confidence in the early years!

Anyone know which tax software handles this education credit situation the best? I've used TurboTax in the past but I'm in my 5th year of school now and want to make sure I get the right credits.

Your H&R Block tax specialist was definitely mixing up the rules. The Form 1098-T itself has no lifetime limit - you'll receive one every year you're enrolled and have qualified education expenses, and you can use it on your tax return each time. What has the 4-year lifetime limit is specifically the American Opportunity Tax Credit (AOTC). This is the most valuable education credit (up to $2,500 per year, partially refundable), but it's limited to 4 tax years per student and can only be used for the first 4 years of undergraduate education. After you've exhausted your AOTC eligibility, you can still claim the Lifetime Learning Credit using your 1098-T information. The LLC is less generous (up to $2,000 per year, non-refundable) but has no year limit and can be used for undergraduate, graduate, or professional courses. So to be clear: keep using your 1098-T every year, but strategically plan which credit to claim based on your situation. Don't let misinformation from a tax preparer cost you money!

I don't think anyone mentioned this, but if you have professional tax software like UltraTax or Lacerte, they can batch generate all these forms for you. I had to do this for a client with 12 missing quarters and it saved a ton of time.

I went through this exact situation with my S-Corp about 6 months ago! Had to file 20+ zero 941s after getting a similar notice. Here's what worked for me: 1. I did file all the back quarters on paper forms - yes, it's tedious but necessary 2. I checked box 18 on each form as others mentioned 3. Most importantly, I included a cover letter explaining that we only do annual payroll in December and that all other quarters have zero wages The key thing that helped me avoid penalties was being proactive. I called the IRS business line (using that Claimyr service someone mentioned - totally worth it to skip the hold time) and spoke to an agent who noted in my file that I was actively resolving the issue. Pro tip: You can download the PDF forms from the IRS website and fill them out electronically before printing. Makes it much faster than handwriting 27 forms. Also, consider sending them certified mail so you have proof of delivery. The whole process took me about 3 hours spread over a weekend, but it completely resolved the issue and I haven't gotten any more notices. Now I just file a zero 941 each quarter after December payroll.