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Just a heads up - if your vehicle is over a certain weight (6,000 pounds gross vehicle weight), different rules apply. Some SUVs and trucks qualify for Section 179 expensing which could make a purchase more advantageous than a lease in certain situations. Something to consider if you're still deciding on your vehicle.
How do you find out the exact "gross vehicle weight" of your car? Is that in the manual or something? I have a Ford Explorer and wondering if I qualify.
You can find the gross vehicle weight rating (GVWR) on a sticker inside the driver's side door jamb. It's usually listed on a manufacturer's label there. For a Ford Explorer, it depends on the specific model and year - some of the larger models do exceed 6,000 pounds GVWR, but many don't. You can also check your owner's manual or contact your dealer with your VIN number. This weight is the manufacturer's designated total loaded weight capacity, not the vehicle's weight when empty, which is an important distinction.
Don't forget about the luxury auto limits for 2023! Even with actual expenses, the IRS caps depreciation for passenger vehicles. For cars first placed in service during 2023, the limits for passenger automobiles are $20,200 for the first year. This gets complicated with leases which is why they have the "lease inclusion amount" thing that someone mentioned.
I've been a tax preparer for 10+ years and this happens ALL the time. The difference is rarely because we have "secret deductions" but usually because the software doesn't ask the right questions or people don't know how to categorize certain expenses properly. Check these common areas where DIY filers mess up: - Business expense categorization (putting things in wrong categories) - Retirement contribution deductions - Education credits (lifetime learning vs american opportunity) - Home office deduction (if you're self-employed) - Health insurance premium tax credits Ask your tax pro exactly what they did differently. It'll be educational!
Does it matter which tax professional you use? Are H&R Block pros better than like a local CPA or the other way around?
It absolutely matters which tax professional you use, but it's not necessarily about brand names. H&R Block has some excellent preparers, but quality varies widely as it does with local CPAs. The key difference is typically expertise level and specialization. Most H&R Block preparers are trained in their specific tax preparation system and have varying levels of certification. A local CPA who specializes in tax might have more comprehensive knowledge, especially for complex situations like business ownership, investments, or unusual income sources. However, they often charge significantly more. The best approach is finding someone with specific experience in your particular tax situation, regardless of where they work.
TurboTax is total garbage, I'm not surprised at all. Last year it completely missed my student loan interest deduction even though I entered all my 1098-E forms correctly. Switched to FreeTaxUSA and got way better results.
One thing nobody's mentioned yet - are you sure you're not being claimed as a dependent on your parents' tax return? The AOTC works differently if someone else claims you as a dependent. Even if you provide more than half your own support, your parents might still be claiming you (especially if they don't realize you're filing independently). You should double-check with your parents before filing. If they're claiming you, the refundable portion of the AOTC won't be available to you - it would go to them instead, even though the non-refundable portion could still be on your return.
I actually called my parents right after I posted this, and you're right - they were planning to claim me as a dependent! I didn't realize they were doing that since I've been living on my own and paying most of my own bills. We're going to talk about it more this weekend to figure out what makes the most sense. Do you know if it would be better for them to claim me and get the credit, or for me to file independently? They're in a much higher tax bracket than me if that matters.
This is actually a fairly common scenario and you need to do some calculations to figure out what's best for your family overall. If your parents claim you, they might get the benefit of the AOTC (up to $2,500) plus potentially other benefits like a dependent exemption. However, only the first $1,500 of the AOTC is non-refundable (reducing their tax they owe), while the last $1,000 is refundable (paid to them even if they don't owe tax). If they're in a high tax bracket, they might benefit more. If you file independently, you can claim the AOTC yourself, including the refundable portion. Since you're in a lower tax bracket, this might be more valuable to you. The deciding factor is usually which arrangement saves the most money for your family as a whole. Sometimes parents and students agree to split the difference if one option is clearly better overall.
There's another possibility that H&R Block software sometimes messes up on: Did you indicate that you were enrolled at least half-time for one academic period in 2023? And did you verify that this is your 1st, 2nd, 3rd, or 4th year claiming AOTC? You can only claim it for 4 years total. I had this issue last year where the software didn't recognize my eligibility because I accidentally indicated it was my 5th year claiming the credit (it wasn't). The software immediately disqualified me without explanation.
This happened to me too!! The H&R Block software is super sensitive to those eligibility questions. I actually had to delete my entire education section and start over to fix it. The system never explained what was wrong - just showed $0 for the credit amount.
You could also check if your W-2 is available electronically! Most bigger companies use services like ADP or Workday where you can log in and download your tax forms yourself. My company doesn't mail W-2s anymore unless you specifically request a paper copy. Worth checking your employee portal if you have one!
I didn't even think of that! Just checked my employee portal and my W-2 was sitting there since January. Feel kinda dumb now but I'm relieved. Thanks for the suggestion - would have been waiting forever for nothing.
Did you update your address with your employer before you moved? This is something most people forget. If your employer still has your old address on file, they'll keep sending important documents there. Make sure to update your address with HR so this doesn't happen again next year!
James Martinez
FYI there are completely free ways to file if your situation is simple! I've used FreeTaxUSA for years and federal filing is $0. They charge like $15 for state filing but that's it. No hidden fees or upsells like the "free" turbotax garbage.
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Aiden RodrΓguez
β’Thank you for this! Does FreeTaxUSA handle 1099 income too? I have a small side gig that I get a 1099 for and that's usually when TurboTax hits me with the "upgrade to premium" nonsense.
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James Martinez
β’Yes, FreeTaxUSA handles 1099 income with no extra charge for the federal return. I have a side gig too and I enter multiple 1099s every year without any "premium upgrade" nonsense. That's one of the main reasons I switched from TurboTax years ago. They have a pretty straightforward interface for entering self-employment income and expenses. You'll still fill out a Schedule C just like with any other service, but they don't charge extra for it. The state return does cost about $15, but that's still way cheaper than most alternatives.
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Olivia Harris
Everyone saying you need to file is technically right, BUT... if you're only owed $1, the IRS really isn't going to come looking for you. The 3-year window to claim refunds is real though, so keep that in mind. What's your income level? You might qualify for more tax credits than you realize. Especially if you're low or moderate income, there are credits like EITC that could potentially get you a much bigger refund.
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Alexander Zeus
β’This is terrible advice. You should always file your taxes if you meet the filing requirements. Sometimes there are credits or deductions you don't know about, and establishing a history of filing on time can help if you ever do get audited in the future.
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