Has anyone used TurboTax for this situation? I'm wondering if it correctly handles Roth IRA withdrawals for education expenses or if I need to manually override something.

One thing to be extra careful about - make sure you understand the timing rules for "qualified higher education expenses." The IRS requires that the expenses be paid in the same tax year as your withdrawal, and they must be for you, your spouse, your children, or your grandchildren who are enrolled at least half-time in an eligible institution. Also, you need to reduce your qualified education expenses by any tax-free assistance you receive - like scholarships, grants, employer tuition assistance, or even American Opportunity Tax Credit amounts. So if your tuition is $10,000 but you get a $3,000 scholarship, you can only count $7,000 as qualified expenses for the penalty exception. I learned this the hard way when I forgot to subtract my Pell Grant amount and had to amend my return. The IRS caught it during processing and sent me a notice asking for clarification. Fortunately I had kept all my documentation, but it delayed my refund by several months.

I feel your pain on this one! I went through the exact same confusion last year with FreeTaxUSA and the EIC thresholds. It's really misleading how they present the information - you see that $59,899 figure and think you're golden, but that's only if you have multiple qualifying children. As a single person with no kids, your actual EIC threshold is around $17,640 for 2024 taxes, so at $43,750 you're unfortunately well above the limit. I know it's disappointing, especially with those medical expenses you mentioned. One thing that really helped me was double-checking that I hadn't missed any other credits or deductions. Since you mentioned medical expenses wiping out your savings, definitely look into whether you can itemize and deduct medical expenses that exceeded 7.5% of your AGI. Also, if you contributed to a 401k or IRA this year, make sure you're getting credit for the Retirement Savings Contributions Credit if you qualify. FreeTaxUSA should have prompted you about these, but sometimes the software doesn't make it obvious. It's worth going back through those sections to make sure you're not leaving money on the table elsewhere!

I completely understand your frustration with the EIC threshold confusion! This is actually one of the most common misunderstandings during tax season. The $59,899 figure you're seeing is indeed for taxpayers with three or more qualifying children, but as a single filer with no kids, your EIC income limit for 2024 taxes is only around $17,640. At $43,750 in income, you're unfortunately above that threshold, which is why FreeTaxUSA is correctly telling you that you don't qualify. I know it's disappointing, especially with those unexpected medical expenses you mentioned. However, don't give up hope! Since you had significant medical expenses that wiped out your savings, you should definitely check if you can itemize deductions. If your medical expenses exceeded 7.5% of your adjusted gross income (which would be about $3,281 in your case), you might be better off itemizing rather than taking the standard deduction. Also, make sure you're not missing other credits you might qualify for - like the Retirement Savings Contributions Credit if you contributed to a 401k or IRA, or any education-related credits if applicable. Sometimes these lesser-known credits can provide meaningful tax relief even when you don't qualify for the EIC.

As a newcomer to this community, I really appreciate seeing such detailed and helpful responses to tax questions! Reading through this thread has been incredibly educational. I'm in a somewhat similar situation as a college student with scholarships and part-time work income, and I've learned so much from everyone's experiences here. The clarification about only reporting the excess scholarship portion (not the full amount) on Line 1 with "SCH" notation is particularly valuable - I definitely would have made that mistake otherwise. One thing I'm curious about that I haven't seen mentioned yet: does the timing of when scholarship money is actually disbursed matter for tax purposes? My university splits scholarship payments across fall and spring semesters, but some of my qualified education expenses (like textbooks) happen before the scholarship money hits my account. Does this affect how I calculate the taxable portion, or do I just look at the total amounts for the tax year regardless of timing? Also, for those who mentioned keeping detailed records of qualified education expenses - do you recommend any particular method for organizing receipts and documentation? I'm trying to get better about record-keeping before tax season gets hectic. Thanks again to everyone who's shared their knowledge here. It's so helpful to learn from people who've actually navigated these situations rather than trying to decipher IRS publications on my own!

Welcome to the community, Dylan! Your question about timing is really important and I'm glad you brought it up. You're absolutely right to focus on the calendar year totals rather than disbursement timing. The IRS uses what's called the "cash method" for most individual taxpayers, which means you report income when received and expenses when paid, regardless of when they were due or when aid was awarded. For your record-keeping question, I'd suggest going digital if possible! I use a simple Google Sheets template with columns for: Date, Vendor, Description, Amount, Category (tuition/fees/books/supplies), and Receipt Photo Link. Then I take photos of every receipt immediately and store them in Google Drive folders by semester. One tip that saved me during an IRS inquiry - I also note the course number or requirement source for each expense. So instead of just "Textbook - $200," I write "Biology 101 required textbook per syllabus - $200." This level of detail really helps if you ever need to prove an expense was required for your education. The key is building the habit now. I spent 10 minutes each week during college updating my spreadsheet, and it saved me hours during tax season. Plus, having everything organized helped me catch qualified expenses I would have missed otherwise - like that $75 lab manual that reduced my taxable scholarship income! Also consider setting up a separate checking account just for education expenses if possible. Makes tracking so much easier when everything educational is in one place.

Yara, I completely feel for you going through your first tax season post-divorce - that's a lot to handle on your own! The great news is that everyone here is spot-on about code 826 being positive. I wanted to add something that might help with your peace of mind: you can actually call the IRS automated refund hotline at 1-800-829-1954 and use your SSN and refund amount to get a quick status update without waiting on hold for an agent. Also, since you mentioned trying to figure out all the codes and notices solo, the IRS has a really helpful transcript code lookup tool on their website under "Understanding Your Tax Account Transcript" that breaks down what each code means. It's been a lifesaver for me when I see new codes pop up. One thing I learned the hard way - once you see 826, try not to obsess over checking your transcript daily (easier said than done, I know!). The system usually updates once a week, typically overnight on Friday into Saturday. Checking more often than that just adds stress without giving you new info. You're doing great navigating all this complexity! That 826 code really is a good sign that things are moving in the right direction. 🌟

Hey Yara! I just wanted to jump in with a quick reassurance - I had the exact same code 826 situation about 6 weeks ago and was similarly stressed about what it meant (also dealing with some major life changes that made tax season extra complicated). Like everyone else has mentioned, it really is good news! One thing that helped me manage the anxiety was creating a simple tracking sheet with the dates each code appeared on my transcript. It helped me see the pattern and timeline more clearly rather than just refreshing randomly and hoping for changes. I ended up receiving my refund 11 days after the 826 code showed up, plus about $73 in interest which was honestly a pleasant surprise. The hardest part really is just the waiting, but you're clearly being proactive and asking the right questions. The fact that you're seeing 826 means you're definitely in the final stages. Try to be patient with yourself during this process - handling taxes solo for the first time after a divorce is genuinely challenging, and you're doing better than you probably realize! Hoping you see that 846 code pop up very soon! 🤞

one thing nobody mentioned is that if ur over the roth ira income limits, doing traditional 401k contributions can actually help you get under those limits! this was a huge benefit for me cuz at $115k you're right near the phaseout range for roth ira contributions. by putting in traditional 401k $, you lower your MAGI which could let you still contribute directly to a roth ira instead of having to do backdoor conversions. this adds another benefit to going traditional with your 401k!

One thing that might help you make this decision is to also consider your employer's vesting schedule and matching policy. If your company has a generous match, you definitely want to capture that free money first before worrying about traditional vs Roth. Also, since you mentioned you're deciding between maxing out pre-tax vs just getting the match and doing backdoor Roth conversions - remember that you can actually do both! You could max out your traditional 401k (getting those tax savings now) AND still do a backdoor Roth IRA conversion for an additional $7,000 since your income is above the direct Roth IRA limits. This gives you the best of both worlds: immediate tax relief from the 401k contributions, plus additional tax-free growth from the Roth IRA. At your income level, this combined strategy could be really powerful for long-term wealth building.