It seems like you might be getting some mixed messages here, but I believe I can perhaps clarify. Code 826 is generally a positive sign - it typically means the IRS is calculating interest on your refund, which usually indicates your refund is in the final stages of processing. While there are sometimes additional delays, in most cases you'll probably see your refund within 1-2 weeks after this code appears. The system isn't perfect, but this particular code is usually good news.

Hey Yara! Going through a divorce and dealing with tax codes solo is tough - been there myself. Just to add to what others have shared, make sure you're also watching for any 570 codes that might have appeared before the 826. Sometimes there are identity verification holds or other issues that can delay things even with the interest code showing. Also, since this is your first tax season post-divorce, double-check that your filing status and any dependent claims are correct - those can sometimes trigger additional review periods. The 826 is definitely good news though, and the interest rate this year isn't too shabby! Hang in there, sounds like you're on the right track.

I'm super confused about my own similar situation - I have a 1098-T showing $19,500 in scholarships but only $17,800 in tuition. Does that mean I have to pay taxes on the $1,700 difference? I'm claimed as a dependent too. 😭

I went through this exact same situation last year and want to share what I learned! The key thing to remember is that scholarship money is only taxable when it exceeds your qualified education expenses AND goes toward things like room, board, or living expenses. From your post, it sounds like your scholarships cover tuition and housing completely. The portion that covers housing would be taxable income that you need to report. However, don't forget to include ALL qualified education expenses when calculating this - not just tuition! Required fees, books, supplies, lab fees, and required course materials all count as qualified expenses. Since you mentioned taking loans for course materials, make sure you're accounting for those costs. If you spent $1,500 on required textbooks and materials, that reduces the taxable portion of your scholarships by $1,500. The loan refunds are definitely not taxable income since you have to pay them back eventually. And you're correct that as a dependent, your parents would be eligible for education credits, not you. One tip: keep detailed records of all your required educational expenses (receipts for books, lab fees, etc.) because they can significantly reduce your taxable scholarship income. Many students miss this and end up paying more taxes than necessary!

Whatever you do, DON'T just write a check to your brother and call it "advertising" without proper documentation. My cousin tried that with his brother's band and got audited. The IRS disallowed the entire deduction AND hit him with penalties. If you're serious about this, you need: - Written contract spelling out exactly what you're getting (logo size, placement, number of races, etc) - Invoices from your brother for the advertising services - Payment specifically for the advertising (not just giving him money that he uses for the car) - Photos documenting the logo on the car at actual races - Track any business that comes from people seeing your logo

This is a great question that many small business owners face! I went through something similar with my marketing consultancy when I considered sponsoring my nephew's little league team. The key thing I learned is that the IRS really focuses on the business purpose test. You need to be able to demonstrate that: 1. Your target customers would actually see this advertising (are race fans your potential clients?) 2. The amount you're paying is reasonable for the advertising value received 3. You're treating this as a genuine business transaction, not family support One thing I'd add to what others have said - consider the timing and how it looks on your return. Since you mentioned this is only your second year in business, the IRS might scrutinize unusual expenses more closely. Make sure you can show this fits within your overall marketing strategy and budget. Also, think about whether there are other, more traditional advertising options that might give you better ROI. Sometimes the "family connection" aspect can cloud our judgment about whether it's actually good marketing for our business. Document everything meticulously if you move forward - treat your brother like any other vendor you'd hire for advertising services.

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.

Dont forget state taxes too! We set up our trust in NY and got hit with extra taxes we didnt expect. some states dont tax trusts at all while others are brutal. mite be worth checking if you should establish the trust in a different state depnding on ur situation.

Another important consideration that hasn't been mentioned yet is the generation-skipping transfer (GST) tax if you're including your sister's children as beneficiaries. Since you mentioned setting up the trust for both your kids and your sister's children, transfers to your sister's kids (who are likely in a different generation than you) could trigger GST tax at a flat 40% rate on amounts exceeding the GST exemption ($13.61 million for 2025). This is separate from gift tax and applies even if you haven't used up your lifetime gift tax exemption. Make sure your attorney structures the trust to allocate GST exemption properly if you're including skip-persons as beneficiaries. It's a complex area that even experienced advisors sometimes overlook during the initial planning phase.