Thanks everyone for the help! I'll definitely look into the Lifetime Learning Credit instead. Did you find the LLC gave you a comparable tax benefit to what you would've gotten with AOTC?

The Lifetime Learning Credit is definitely not as generous as the AOTC. AOTC gives you up to $2,500 credit with up to $1,000 refundable (meaning you can get it even if you don't owe tax). LLC is limited to $2,000 max and it's non-refundable, so you only benefit if you actually owe federal tax. Also, the LLC calculation is only 20% of your qualified education expenses (up to $10,000 in expenses to reach that $2,000 max). Still better than nothing though! And definitely better than claiming AOTC incorrectly and dealing with an audit like I had to.

This is actually a really good point. I had a similar situation where I paid for my last undergrad semester in December but graduated the following May. My tax person said payment date is what determines the tax year for education credits.

What about if I have to go through a toll on my way to a client but I wouldn't normally take that route for personal stuff? Like I only use that toll road because it gets me to the client faster?

That's a perfect example of a fully deductible business toll expense. If the toll road is specifically being used to reach a client or for business purposes, then 100% of that toll is deductible. The key test is whether you would have incurred that specific toll charge if you weren't conducting business. This is why good record-keeping is so important. Having your appointment calendar or client meeting logs to match up with the toll receipts creates a clear paper trail showing the business purpose. The IRS loves to see that kind of documentation if they ever question your deductions.

While toll expenses alone probably won't trigger an audit, they could come under scrutiny if your return is audited for other reasons. The IRS typically looks at the whole picture of your business deductions.

Can you explain more about this Qualified Business Income deduction? Is that something I can claim as a freelance consultant, or is it only for certain types of businesses?

The Qualified Business Income (QBI) deduction is definitely available to freelance consultants in most cases. It allows you to deduct up to 20% of your qualified business income from your taxable income for federal income tax purposes. There are income limitations that begin to phase out the deduction if your taxable income exceeds $170,050 for single filers or $340,100 for joint filers (for 2025). If your income is below those thresholds, you should qualify for the full deduction regardless of your business type. This can be a huge tax saver - potentially reducing your income tax by thousands.

I switched to an S-Corp two years ago when my net income hit about $80k. It's saved me roughly $4-5k per year in SE taxes. You pay yourself a "reasonable salary" that's subject to FICA (social security/medicare), but the rest can be taken as distributions that aren't hit with SE tax.

Thanks for breaking it down like that. I had no idea we might be leaving thousands on the table! Can we still file jointly if we have separate bank accounts and generally keep our finances separate day-to-day? That's partly why we've always filed separately.

Absolutely! How you manage your daily finances has nothing to do with your tax filing status. Many couples file jointly while maintaining completely separate bank accounts and financial systems. The IRS doesn't care if you keep separate accounts or split bills 50/50 or any other arrangement. Your tax filing status is completely independent from how you handle your money in daily life. You can file jointly and still keep everything else separate if that works better for your relationship.

Georgia tax rules confused me too. When I filed last year, I found that the software I was using (wont name names) calculated the GA credits wrong and I had to manually override it. Always double check the state calculations!

I tried that but couldn't get through the identity verification - it kept asking for a credit card number that matches my name and address, but my card is pretty new and I've moved recently. Is there another way to verify?

If you can't get through the online verification, you can use the "Get Transcript by Mail" option instead. It takes about 5-10 days to arrive but doesn't require the same strict verification. Alternatively, you can file Form 4506-T and specify that you want the Wage and Income transcripts for your missing years. Another option is to try calling your previous employers' HR departments directly. Many larger companies have systems to provide past employees with W-2 copies, even from several years back. Sometimes this is faster than waiting for the IRS transcripts.

You can also deduct a portion of car maintenance based on business use percentage. I track my total annual miles and what percentage was for rideshare, then deduct that same percentage of oil changes, tire rotations, etc.

That's actually really helpful to know! I never thought about deducting maintenance costs that way. Did you have to provide extra documentation when you filed, or is just keeping your receipts enough in case of an audit?