Thanks for mentioning the other requirements! I've been so focused on the income limits I forgot about vehicle price caps. Do you know if the $25,000 limit is before or after any dealer add-ons and fees?

The $25,000 limit is based on the sales price of the vehicle itself, before taxes and fees. However, dealer add-ons that are included in the purchase price (like extended warranties sold by the dealer) would count toward that limit. Be careful about dealers who might try to structure the deal in ways that artificially lower the vehicle price while adding "mandatory" add-ons to get around the price cap. The IRS looks at the actual purchase price of the vehicle as reported on your sales documentation.

this isnt correct, i got the ev credit last year and still claim mileage. my tax guy said its fine cause the credit is for buying the car, deductions are for using it. totally different things.

Thanks for all these suggestions! We didn't think about checking his credit reports - doing that right now. Do you know if the IRS will require the police report even if they're the ones who made the mistake? And did your brother eventually get his refund?

The police report is a good idea regardless of where the error originated. When the IRS sees you've taken formal steps, they tend to prioritize the case more. Some IRS divisions won't process certain claims without it, so it's better to have it and not need it. My brother did eventually get his refund, but it took about 5 months total. The identity theft department issued him a new IP PIN to use for future tax filings as well, which adds an extra layer of security. Make sure your husband asks about getting an IP PIN once this is resolved - it's the best way to prevent similar issues in the future.

The congressional representative tip is gold! I had a similar issue and was getting nowhere for months. Called my rep's office, and their staff person had a direct line to someone with actual authority at the IRS. Problem solved in under a month after that.

I just looked it up and unfortunately my state isn't included in the Direct File pilot program yet. Seems like it could be a good option in the future though! I'll probably go with one of the free alternatives mentioned here instead of paying for TurboTax.

Is FreeTaxUSA actually reliable? I'm always worried about using less well-known tax software. Do they have good support if you have questions?

Does the standard mileage rate usually work out better than tracking actual expenses? My car is pretty old and fuel efficient but I'm driving a TON for deliveries.

In my experience, standard mileage usually works out better for newer cars or fuel-efficient vehicles. I drive about 25,000 miles a year for deliveries in a 2018 Corolla, and the standard deduction gives me around $16,000+ in deductions which is way more than I'd get itemizing. For older vehicles that might need more repairs or gas guzzlers, tracking actual expenses could potentially be better. The key is to try calculating both ways for a month and see which gives you the bigger deduction. Just remember if you choose actual expenses in the first year, you're generally stuck with that method for the life of that vehicle.

This is actually a really good point. I worked in insurance for years and this arrangement could potentially void the insurance coverage entirely. Most policies require that the regular drivers be listed, and if there's a claim and they discover misrepresentation, they can deny everything.

Thanks for bringing this up! We're in Pennsylvania, which isn't a community property state. Do you know if there are any specific state-level considerations for non-community property states that might affect our decision?

For non-community property states like Pennsylvania, you generally report income and deductions based on which spouse actually earned the income or paid the expense, which is much simpler. The main state-level consideration would be your state tax rules around dependent exemptions or credits. Some states have their own child tax credits or dependent exemptions that might have different phase-out thresholds than the federal ones. Pennsylvania specifically has a relatively simple income tax system with a flat rate, but you should check if there are any dependent-related benefits at the state level that might influence your decision about who claims your daughter.

The Earned Income Tax Credit isn't available for married filing separately status - it's one of the credits you give up when you choose MFS. They'd need to file jointly to claim it, which defeats the purpose of keeping the student loan payments lower.