This is super helpful! Quick question - how far back can you go with TurboTax for previous years? I haven't filed since like 2019 and I'm trying to get caught up without making the same mistake as OP.

TurboTax typically keeps the last 7 years of tax software available, so you should be able to file returns back to 2019 without issues. You'll need to download the specific software version for each tax year you need to file. Start with your oldest return (2019) and work forward chronologically. Each year's return may affect the next, especially if you're carrying forward losses or credits. Just be prepared for potential late filing penalties if you owed taxes for those years. The IRS generally has a 10-year collection period for unpaid taxes, so it's definitely good you're getting caught up now.

Yeah, prior year returns definitely get processed differently. The IRS prioritizes current year returns during tax season. Did you get any kind of notice or explanation for the delay?

That's a really smart idea I hadn't considered! I do have student loans and I've been making payments. Would those interest deductions help in this situation? Also, is it too late to make retirement contributions that would count for last year?

Student loan interest can definitely help lower your MAGI, which is exactly what you want in this situation. You can deduct up to $2,500 in student loan interest depending on your income level. As for retirement contributions, you can still make IRA contributions for 2024 until the tax filing deadline in April 2025. If you have self-employment income, you might also be eligible for a SEP IRA which has higher contribution limits. Just make sure you specify that the contribution is for tax year 2024 when you make it. This is one of the few "retroactive" moves you can make that legally affects your previous year's taxes.

Yes! I successfully did this. The key is that you need to contact the marketplace and specifically request an "income adjustment review" for the previous year. The regular customer service reps often don't know about this process. Ask to speak with a supervisor or advanced resolution team. Explain that you made an honest mistake in reporting your income (confusing net vs. gross) and request the review. They may have you submit documentation of your actual income. In my case, they adjusted my 1095-A and issued a corrected one, which significantly reduced what I owed.

Does anyone know if the American Opportunity Credit can be claimed if you're going back to school for a second bachelor's degree? Or does the "first 4 years" rule mean your first degree only?

The "first 4 years" rule refers to the first four years of post-secondary education total, not just your first degree. So if you already completed a 4-year bachelor's degree, you generally wouldn't qualify for the American Opportunity Credit for a second bachelor's. In that case, you might still qualify for the Lifetime Learning Credit though, which doesn't have the "first 4 years" restriction. It's worth less (20% of up to $10,000 in qualified expenses), but still helps reduce your tax bill.

I used TaxSlayer last year and was able to claim the American Opportunity Credit without any extra fees. Their interface isn't as polished as TurboTax but it's definitely user-friendly and they walked me through all the education credit stuff pretty clearly.

This happened to me too. My VITA preparer was amazing and fixed everything. One question - doesn't amending mean the OP will get a smaller refund since the fraudulent credits will be removed?

Does increasing W-2 withholding actually prevent underpayment penalties the same way estimated payments do? I thought those were treated differently by the IRS.

Yes, it absolutely works! The IRS doesn't care how you pay as long as enough tax is withheld throughout the year. W-2 withholding is actually treated even better than estimated payments because withholding is considered to have been paid evenly throughout the year even if it wasn't. For example, if you realize in December that you're going to owe more, you could have extra withheld from your last few paychecks. The IRS treats that withholding as if it had been paid evenly across all quarters, which can help you avoid underpayment penalties even if your first few quarters were underpaid. Many people find this easier than keeping track of quarterly payment deadlines. Just make sure you're withholding enough total to meet your safe harbor requirement (either 90% of current year tax or 100% of prior year tax).

Try setting aside 30% of everything you make from 1099 work right when you get paid. I have a separate savings account just for taxes. That way you never "feel" like that money is yours to spend, and you're not scrambling at tax time.