This is so helpful! I had no idea the education credits phase out at higher incomes. Is there any way to still benefit from education expenses if you're above the income limits? I'm in a similar situation making around $105k and taking night classes.

There are still some options available even above the phase-out limits. While the American Opportunity Credit and Lifetime Learning Credit may not be available at your income level, you might qualify for the Tuition and Fees Deduction, which has higher income limits. Another option to consider is whether your education might qualify as a work-related education expense, which could potentially be deductible as an employee business expense in some situations. The rules are strict though - the education must be required by your employer or by law to maintain your current position, or it must maintain or improve skills needed in your current job.

I didn't even think about that! I live in Illinois but my company is based in Wisconsin. I'll definitely check my state withholding too. How bad was the hit when you fixed both state and federal withholding? I'm worried about my take-home pay dropping too much all at once.

Great question! Scholarships are treated differently than earned income. If your scholarship is tax-free (used for qualified education expenses like tuition and required books), it's not reported as income on any state return. If part of your scholarship is taxable (used for room and board, for example), it's generally considered income in your state of residency, not the state that provided the scholarship. So in your case, if you're a Pennsylvania resident for tax purposes (which most full-time students are for their school state), any taxable portion of your scholarship would be reported on your PA return, even though the scholarship came from Ohio.

Omg that sounds like a nightmare! Have you figured out how to handle it? I'm stressed just about my two states!

It's been... a process lol. I ended up paying for a consultation with an accountant who specializes in multi-state issues. Definitely worth the $150 for the peace of mind. He said I need to file: - Resident return for Massachusetts (my tax home as a student) - Non-resident returns for California and New York - And the freelance income gets reported on all three (but with credits to avoid triple taxation) The European travel didn't matter tax-wise since I wasn't there long enough to trigger any foreign filing requirements. My advice: if you have more than 2 states, just pay a professional. The stress reduction is worth it!

We did look into the loan option initially, but the problem is the repayment terms. His employer requires loan repayments through payroll deductions, and with the ongoing care costs for my mom, we can't afford the biweekly payment amount they calculated. Also, they only allow loans up to $50k, and we unfortunately need more than that to handle the facility's upfront payment and still keep our mortgage current. But you're right that it's definitely something others should consider in similar situations where the amount needed is lower or the repayment would be manageable.

This is really important advice. My sister made a large 401k withdrawal and thought the 20% withholding covered everything. She ended up with a huge tax bill plus penalties. Definitely worth checking if you need to make estimated tax payments.

Are there any disadvantages to holding MLP ETFs instead of the MLPs directly? I know MLPs have some tax advantages with distributions often being partially tax-deferred return of capital.

Yes, there's definitely a trade-off. When you own an MLP directly, a significant portion of distributions is often classified as return of capital, which isn't immediately taxable (it just lowers your cost basis). That tax deferral benefit is one of the main advantages of MLPs. When you own an MLP ETF, it's structured differently for regulatory reasons. The fund itself pays corporate taxes on the MLP income before distributing to you, which creates some tax inefficiency. So while you avoid the K-1 hassle with an ETF, you potentially give up some of the tax advantages that make MLPs attractive in the first place.

Does TaxAct or H&R Block handle K-1s better? I've been using TurboTax but I'm getting tired of their upsells every time something slightly complicated comes up on my return.

Shoot, I didn't even think to check that! Just looked at my paperwork and everything seems correct with my banking details. They did claim the education credit for my online classes last year, but no EIC or child credits. I'm gonna try that Where's My Refund tool tonight when I get home.

That's good that your banking info is correct! The education credits shouldn't cause any special delays like the EIC or ACTC would. Definitely use the Where's My Refund tool - it'll at least tell you if your return has been received and accepted, which is the first step. Don't worry too much yet - 4 days is really early in the process. Most people I've worked with (I volunteer with VITA too) see their refunds within 2-3 weeks for straightforward returns. It's only been a few business days since Saturday!

TurboTax's tracker just pulls data from the IRS where's my refund tool. It's not any faster or more accurate, just repackaged in their app. I've used both and they always show the same status. Save yourself the trouble and go straight to the IRS site.