I've heard that the EITC is different for each tax year because of inflation adjustments. Does anyone know what the threshold was for 2021? I'm trying to figure out if I should amend my return.

Just wanted to add some context about why you might be behind on your taxes - the IRS has been dealing with massive processing delays, especially for amended returns. Your February 2022 amended return not getting processed until December 2022 is unfortunately pretty typical of what many people experienced during that period. For your current situation, as others have mentioned, you're just over the 2022 EITC threshold. But definitely keep those expanded 2021 rules in mind that @Freya Pedersen mentioned - if you were between 19-24 in 2021, you might have qualified under the special COVID provisions even if you didn't think you were eligible at the time. The income limits were much higher that year, so it's worth double-checking your 2021 situation. Also, make sure you're calculating your AGI correctly. Your AGI should generally be close to your earned income if you're just filing a basic return with W-2 income. If there's a big difference between your W-2 wages ($13,100) and your calculated AGI ($16,800), you might want to double-check that calculation or see if there are other income sources you forgot about.

Your mom definitely cannot use your 1098-T form for education tax credits if she's not claiming you as a dependent. The IRS is very clear on this - only the person who claims the student as a dependent can claim education credits like the American Opportunity Credit or Lifetime Learning Credit. The "reimbursement" and "keeping scholarships" explanations don't make sense from a tax perspective. Scholarships are managed between you and your school, not through anyone's tax return. If she's talking about FAFSA, that's a completely separate financial aid process that doesn't require your 1098-T form. Here's what I'd recommend: File your taxes ASAP claiming yourself as independent and use your 1098-T to claim any education credits you're eligible for (like the American Opportunity Credit if you qualify). Once your return is processed, it will prevent anyone else from claiming those same benefits. Make sure you keep all documentation showing you paid qualified education expenses if you're claiming credits. And don't give her your 1098-T - there's no legitimate tax reason she needs it if she's not claiming you as a dependent.

I'm a tax professional and want to add some clarity about the specific situation you described with the 2021 income reporting. It sounds like your mom might be confusing several different tax concepts here. The mention of reporting your income as "below $6,700" in 2021 suggests she may have been trying to ensure you qualified as her dependent under the gross income test (which was $4,300 for 2021, actually). However, if you're now 22, living independently, and paying your own expenses, you likely don't meet the dependency tests regardless of income. The "keeping scholarships" comment is particularly concerning because it suggests a fundamental misunderstanding of how scholarships work. Scholarships are awarded and maintained based on academic performance, enrollment status, and the specific terms set by the scholarship provider - not by who claims what on their tax return. What your mom might actually be thinking about is maximizing education benefits across both your returns, but she's going about it the wrong way. If she has legitimate education-related expenses (like Parent PLUS loan interest), she can claim those deductions without needing your 1098-T. But the education credits associated with your 1098-T can only be claimed by whoever claims you as a dependent - which in this case would be you. My advice: Have a direct conversation with her about what specific tax benefit she thinks she's missing out on, then you can address the actual issue rather than this confusing 1098-T request.

I'm dealing with a similar situation right now and this thread has been incredibly informative! One aspect I haven't seen mentioned yet is the timing of when to make this change during the tax year. Since we're already partway through 2025, would it be better to wait and make the accounting method change effective for the 2026 tax year, or can we still implement it for 2025? I'm worried about mid-year complications with the Section 481(a) adjustment calculations. Also, for those who have made this switch - how do you handle the ongoing reconciliation between your accrual books and cash method tax returns? Do you maintain separate records or use some kind of worksheet to track the differences each year? I want to make sure we set up a sustainable system that won't create headaches down the road.

Just wanted to add another perspective from someone who made this exact switch two years ago. One thing that really caught me off guard was how the change affected our quarterly estimated tax payments. Since we moved from accrual (where income was recognized when billed) to cash method (income recognized when received), our cash flow timing changed significantly. Under accrual, we had steady quarterly income recognition even if payments came in irregularly. With cash method, our taxable income now fluctuates based on when customers actually pay, which made estimated tax planning much trickier. We had one quarter where we received several large payments and owed way more than expected, followed by a quarter with very little taxable income. My advice: once you make the switch, work with your accountant to develop a new estimated tax payment strategy that accounts for your actual collection patterns rather than your billing schedule. This is especially important for service businesses with longer payment cycles. Also, make sure your payroll processing company understands the change if you're taking distributions or salary adjustments based on "book" income versus "tax" income. The disconnect between the two can create confusion when planning compensation.

Has anyone considered using an HSA (Health Savings Account) in this situation? If your Blue Shield plan is HSA-eligible (high deductible health plan), you could put pre-tax money into an HSA up to $3,850 for individual coverage (2023 limit). This would give you some tax benefits without having to worry about the 7.5% threshold for itemizing. The money goes in pre-tax, grows tax-free, and comes out tax-free for qualified medical expenses. Would be a way to offset some of the tax impact from that stipend income at least!

I'm dealing with a very similar situation at my workplace! We had the same transition from multiple insurance options to just one, and several of us opted for the stipend route to keep our existing providers. One thing I learned the hard way is to make sure you're setting aside enough for quarterly estimated tax payments if your employer isn't withholding enough from the stipend. Since it's treated as regular income, you might end up owing at tax time if the withholding doesn't account for the bump in income properly. Also, definitely explore that HSA option someone mentioned if your plan qualifies. I wish I had known about that earlier - it would have helped offset some of the tax burden from the stipend. The pre-tax savings can be significant, especially if you're in a higher tax bracket. Have you checked with your benefits department about whether they might consider setting up a formal HRA structure for next year? Sometimes HR departments are open to exploring these options once they realize how many employees are affected by the tax implications.

Just to add some practical advice - whether or not you form an LLC, definitely keep track of ALL your business expenses for your photography work. Gear, software, travel to shoots, portion of home used exclusively for business, etc. These are deductible regardless of how you're classified. If you are properly an independent contractor (which doesn't sound like the case here), you'd report these on Schedule C. If you're an employee, some expenses might be eligible as unreimbursed employee business expenses, though the tax benefits are more limited since the 2017 tax law changes. But the classification issue is the bigger concern. If you're being treated like an employee, you should be classified as one, LLC or not.

One thing nobody's mentioned yet - if you do decide to form an LLC (for your legitimate freelance photography, separate from your employment situation), consider talking to an insurance agent about professional liability insurance. An LLC provides some protection, but having insurance is even better protection against potential lawsuits from unsatisfied clients. I learned this the hard way when a wedding client sued me after claiming I missed important moments. My LLC helped, but having insurance would have saved me thousands in legal fees even though I eventually won the case.