Has anyone had experience with the IRS actually catching and auditing someone over 1098-T scholarship overages? I'm in the same boat with my son having about $14k in excess scholarship and I haven't been reporting it for two years now...starting to get nervous after reading this thread!

Your tax preparer's casual approach is really concerning. The IRS has specific rules about scholarship income, and Publication 970 clearly states that scholarship amounts exceeding qualified education expenses are taxable to the student. Even though your daughter is your dependent, she still needs to file her own return if she has taxable income above the filing threshold. The $16,000 difference you mentioned would likely put her over the standard deduction limit, meaning she'd need to file and pay taxes on that excess amount. The college reports this information to the IRS via Form 1098-T, so they have the data to potentially flag discrepancies. I'd strongly recommend getting a second opinion from a CPA who specializes in education tax issues. While many people might not get caught, intentionally ignoring reportable income isn't worth the risk of penalties, interest, and potential audit issues down the road. Better to handle it correctly from the start.

Thank you everyone for all this helpful information! I'm the original poster and I just wanted to update that I successfully completed my Schedule 1 using the advice here. You were all absolutely right - Line 16 is just the simple sum of lines 1-15 in the far right column. I ended up with $13,360 total ($8,700 business income + $410 capital gain + $4,250 unemployment) and made sure to transfer that exact amount to Line 8 on my Form 1040. I double-checked my math three times after reading about the software errors some of you experienced! One thing I learned from this thread is that I should probably consider getting help with next year's taxes since my side business is growing. The tips about taxr.ai and Claimyr are bookmarked for future reference. Really appreciate this community - you saved me from potentially making costly mistakes!

As someone who's been dealing with tax preparation for years, I want to emphasize something crucial that came up in this thread - the importance of keeping detailed records throughout the year. I see you mentioned business income of $8,700 from your side gig, and that's exactly the kind of income that can get complicated quickly. For next year, consider setting up a simple spreadsheet or using accounting software to track your business income and expenses monthly. This will make Schedule 1 much easier and could potentially save you money through deductions you might be missing. Business expenses like equipment, software, home office deductions, and even mileage can significantly reduce that $8,700 taxable income. Also, since you mentioned not trusting tax software after it messed up your state taxes, you might want to look into having a tax professional review your return before filing - especially with business income involved. The peace of mind is often worth the cost, and they can catch things that might save you more than their fee.

I'm in the exact same boat as everyone here! Filed my Michigan return on February 3rd and it's been stuck in manual review since February 10th. This thread has been such a relief to find - I was starting to think I was the only one dealing with this frustrating waiting game. Like so many others have mentioned, I've been obsessively checking the eServices portal multiple times a day hoping for any kind of update. It's become this anxious habit where I refresh the page expecting something different, but it's always that same message about manual review and "appreciating patience." Reading through everyone's experiences and timelines has really helped me understand that this is just Michigan's standard fraud prevention process during peak filing season, not some red flag on my specific return. The explanation about batch processing and automated verification checks makes so much more sense than what I was imagining. I'm definitely going to follow everyone's advice and switch to weekly portal checks instead of this daily obsession. It's clear that checking more often just adds stress without actually helping anything move faster. Based on all the shared timelines here, it sounds like those of us who filed in early February should hopefully start seeing some movement in the next few weeks. Thanks Oliver for starting this incredibly helpful discussion - this community support has been amazing for managing the anxiety! 🙏

I'm dealing with this exact same situation! Filed my Michigan return on January 26th and it's been in manual review since February 2nd. Finding this thread has been such a huge relief - I was starting to panic thinking I had done something wrong on my return. Like everyone else here, I've been caught in that obsessive daily portal checking cycle. I probably refresh that eServices page 4-5 times a day hoping for any kind of change, but it's always the same "manual review" message. It's become this compulsive habit that's definitely not helping my stress levels! Reading through all these shared experiences has really opened my eyes to how common this process is during Michigan's peak filing season. The explanations about fraud prevention, batch processing, and automated verification make so much more sense than what I was imagining in my head. What gives me the most hope is hearing that most people eventually get their returns processed without needing to provide additional documentation. The "no mail is good news" rule seems to hold true for almost everyone here. I'm definitely joining the weekly check club instead of my current daily obsession! Based on all the timelines shared in this thread, it sounds like those of us who filed in late January should hopefully start seeing some movement very soon. Thanks Oliver for creating this incredibly supportive discussion - knowing we're all in this waiting game together makes it so much more bearable! 🙏

This is a frustrating situation that many field workers face. While the tax deduction landscape changed significantly in 2018, there are still some important distinctions to understand about your specific situation. Since you mentioned you don't have a regular office and travel to different client sites daily, this could potentially change how your mileage should be classified. The IRS distinguishes between: 1. **Commuting** - travel from home to your regular workplace (not deductible) 2. **Business travel** - travel between work locations or to temporary work sites (should be reimbursable) If you're truly going to different temporary work locations each day rather than one fixed workplace, your employer's policy of treating the first 90 miles as "commuting" may not align with IRS guidelines. Here's what I'd recommend: - Document that you have no fixed office location - Keep records showing you visit different client sites - Research IRS Publication 463 which covers travel expenses - Present this information to your employer's HR/finance department While you can't currently deduct unreimbursed employee expenses on your personal taxes, you may have grounds to argue for better reimbursement from your employer based on the temporary work location rules. The key is demonstrating that your daily travel pattern doesn't fit the traditional "home to office" commute model.

I've been following this thread and want to add something important that might help your case. The IRS actually has a specific ruling about workers who have no fixed office location - it's called the "home office deduction" principle, but it also applies to travel reimbursement policies. If your home is your principal place of business (which sounds like it might be, since you get assignments there and have no fixed office), then travel from your home to temporary work locations should be considered business travel, not commuting. This is covered under IRS Revenue Ruling 99-7. The key factors the IRS considers are: - Do you perform administrative tasks at home? - Do you receive work assignments at home? - Is your home where you store work materials/tools? - Do you have no other fixed business location? If you can answer "yes" to these questions, you have a strong argument that your employer's 90-mile "commute" exclusion is incorrect. Your home should be treated as your business headquarters, making all travel to client sites reimbursable business travel. I'd suggest documenting these factors and presenting them to your employer along with Revenue Ruling 99-7. Even though you can't deduct unreimbursed expenses personally, this ruling could help you get proper reimbursement from your company.

Just a quick tip from a former bank employee: make sure the SSNs on the 1099-INT forms match your children's Social Security cards exactly. Sometimes banks make errors, especially with children's accounts that might have been set up as custodial accounts. I've seen cases where the parent's SSN accidentally got associated with the child's account, which creates a real headache when tax forms are generated. Might be worth double-checking before you file!

Great question! I went through this same situation last year with my daughter's savings account. Here's what I learned that might help: In FreeTaxUSA, you'll want to navigate to the "Income" section, then look for "Interest and Dividends." From there, you should see an option for "Child's Interest and Dividends (Form 8814)." This is where you can elect to report your children's interest income on your own return instead of filing separate returns for them. Since each child only earned about $45 in interest, using Form 8814 is definitely the way to go. You'll need to enter each child's information separately - their full name exactly as it appears on their Social Security card, their SSN, and the interest amount from each 1099-INT. One helpful tip: make sure you have both kids' Social Security cards handy when you're entering this information, as the software is pretty strict about matching the names exactly. Also, keep those 1099-INT forms with your tax records even though you're reporting the income on your return. The whole process should only take a few minutes once you find the right section in the software. Don't worry about the small amounts affecting your tax situation significantly - with interest that low, it's mainly just a reporting requirement.