This finally makes sense! So basically I can't get both benefits on the same dollars - either the money is tax-free OR I can use it for LLC but not both. Would it be possible to split my qualified expenses? Like use $8,000 for tax-free fellowship treatment and the remaining $5,500 for the LLC calculation?

Exactly! You can absolutely split your qualified expenses to optimize your tax situation. You could allocate $8,000 of your qualified expenses to make that portion of your fellowship tax-free, and then use the remaining $5,500 toward calculating your Lifetime Learning Credit. With the LLC giving you a credit of 20% of your qualified expenses, that $5,500 would generate a $1,100 tax credit. You'd need to calculate whether this approach saves you more than making all $13,500 of your fellowship tax-free. It depends on your tax bracket, but credits are generally more valuable than exclusions from income.

I used TaxSlayer last year with a research fellowship and Lifetime Learning Credit. It worked fine but you have to be careful about how you enter the fellowship income. If you received a W-2, enter it as wages. If no W-2, you need to report it as "Other Income" and then separately indicate how much was for qualified expenses. For the LLC, make sure you're only claiming expenses that weren't already covered by tax-free scholarship/fellowship funds. TaxSlayer has a decent education credits section but doesn't always make this distinction super clear.

Thanks for the advice! I didn't itemize - I took the standard deduction. Would that have made a difference with how the gambling income was handled? I'm definitely saving everything from TurboTax, including recording our phone conversations (with their knowledge).

Yes, that makes a significant difference. Gambling losses can only be deducted if you itemize deductions, and even then, they're limited to the amount of your gambling winnings. Since you took the standard deduction, you couldn't deduct those losses at all, which means your AGI should definitely have included all the gambling winnings. This actually makes TurboTax's error even more clear-cut. They should have included all gambling winnings in your AGI calculation regardless of your losses or deduction choice. Definitely consult with a tax attorney - this is a textbook case of preparer error.

Did H&R Block end up covering any of your penalties or offering any compensation for their mistake? I'm dealing with something similar right now.

This is actually smart af. What savings account do you use? I've been thinking about doing something like this because my refunds are always tiny but I suck at saving.

Yes, there are income limits for the Earned Income Tax Credit (EITC). For 2025, if you're single with no qualifying children, you can qualify with income up to about $18,000. With one child, that limit increases to around $43,000. If you're married filing jointly, the limits are higher. At $38k with no children, you'd likely be over the limit for EITC, but if you have a qualifying child, you might still be eligible. There are other credits worth looking into though, like the Saver's Credit if you contribute to retirement accounts, or education credits if you're taking classes.

That's really helpful actually. Is that something I can just write in on the form? Like a specific dollar amount to take out extra? How did you figure out that $50 was the right amount?

Yes, on the current W-4 form, line 4(c) is specifically for additional withholding. You just write in the extra amount you want withheld from each paycheck. We calculated our $50 amount by looking at how much we owed last year ($1800) and divided it by the number of paychecks we each get annually (we both get paid bi-weekly, so 26 paychecks each). That gave us about $35 per paycheck, but we rounded up to $50 to be safe. It's not a perfect science, but it worked well for us. You could do the same calculation based on what you've owed in previous years.

I tried it but found it confusing tbh. Ended up just doing what someone suggested above - using the "married but withhold at higher rate" option and adding a little extra. Way easier and had the same result.

Do the carriers provide this service for free? And are their classifications considered "official" enough that customs won't question them? I ship through USPS mostly, but I'd switch carriers if it meant getting reliable HS code help.

The major carriers typically provide basic classification assistance for free if you're a regular customer shipping internationally. While their guidance isn't a formal binding ruling, it's generally reliable since they have a vested interest in ensuring smooth customs clearance. The classifications they provide are based on the official Harmonized Tariff Schedule. USPS unfortunately offers less support in this area compared to FedEx, UPS, or DHL. If you're shipping high volume or high-value items internationally, it might be worth considering a switch. Alternatively, you could use USPS for domestic and smaller carriers for international if that makes financial sense for your business.

That's super helpful! Did you run into any issues with duty rates varying between countries even with the same HS code? I'm trying to figure out if I should adjust my prices for international customers based on their location.