But isn't there some education credit we can claim against grant money? I remember someone telling me you can deduct research expenses or something?

There's a difference between tax credits for education and how you handle grant money. You might qualify for the American Opportunity Credit or Lifetime Learning Credit based on your educational expenses, but that's separate from how you report your grant. For research expenses, if your grant is specifically for research and you have expenses directly related to that research, those expenses may offset the taxable portion of your grant. Keep all receipts for lab supplies, research materials, travel to research sites, etc. The rules get complicated though, so documenting everything is important. The key distinction is whether the grant required you to perform services (like research work) or was simply awarded to support your education.

I used FreeTaxUSA instead of TurboTax for my fellowship grant. There's a specific section for scholarships and grants not reported on a tax form. Much easier than TurboTax for this situation!

Thanks for this explanation! I checked and my withholding in Box 2 was $15,980 and my total tax on Line 24 was $15,600, so the math does check out for the $380 refund. I guess I was just expecting more because I've always gotten bigger refunds before. Is it normal for the refund to vary this much from year to year? Last year I got back around $2,400.

The big difference between last year's $2,400 refund and this year's $380 is worth investigating. Something significant changed in either your withholding or your tax situation. Most likely explanations: 1) You updated your W-4 withholding form last year and it's now more accurate, 2) You had additional tax credits or deductions last year that you didn't have this year, or 3) Your income increased putting you in a higher tax bracket while your withholding didn't increase proportionally. I'd recommend comparing last year's return line by line with this year's to spot the differences.

Not a waste at all. I tried doing my own taxes for years and always stressed about making mistakes. My tax guy catches things I would miss and the peace of mind is worth every penny. Plus, he's available if I get any letters from the IRS.

I agree with you. I've been doing my own taxes for years with just W-2 income using FreeTaxUSA. It's like $15 for state filing and federal is free. The software walks you through everything and double-checks for errors. Plus you learn how taxes actually work instead of just handing everything over to someone else.

I tried that approach but she's worried about the hassle of amending and possibly triggering an audit. Plus she already spent her refund so she's concerned she'd have to pay some back. How complicated was the amending process for your ex?

The amending process isn't that bad honestly. She just needed to file a 1040-X form which is basically just marking what changed from the original return. If she used tax software, most of them can help with amendments pretty easily. My ex was done in about 30 minutes. As for paying back refund money, yeah that could happen if her refund would be less without claiming your son. But waiting could be worse - if you both get audited later, she might have to pay back the refund PLUS penalties and interest. Might be worth running the numbers both ways to show her exactly what the difference would be.

What kind of documentation did they want? I'm in a similar situation but most of our bills are paid from a joint account so I'm not sure how I'd prove I contributed more.

I checked and my 1099-R does have code 7 in Box 7. This is my first year doing a backdoor Roth so I don't have any previous basis - it was just a contribution and immediate conversion. I'm going to try completing the entire return and see if it fixes itself in the review stage like others suggested. If that doesn't work, I might just have to call their support line.

That's good that you have code 7 and no previous basis to worry about! Definitely try the complete-and-review approach. One last thing to check - make sure you're entering the contribution as a 2023 contribution (assuming that's when you made it) and not as a prior year contribution. Sometimes that distinction can trip up the software too. Let us know if it works out! These backdoor Roth issues are so common but so frustrating.

This is an excellent point! The pro-rata rule is the downfall of many backdoor Roth attempts. If you have ANY other money in ANY traditional IRA accounts (including SEP IRAs and SIMPLE IRAs), the backdoor strategy gets complicated fast.

Even with guides, I always worry about missing something important. Does TurboTax actually guide you through the backdoor Roth process well? Which version do you need to handle this correctly?

TurboTax Premier handles backdoor Roth conversions well. The software will ask if you made contributions to a traditional IRA, and you indicate they were non-deductible. Later, it asks about conversions to Roth IRAs. Just make sure you have the exact dates and amounts for both transactions. The most important thing is understanding the concept beforehand so you recognize if something doesn't look right. The software generates Form 8606 automatically, but I always review it to ensure it shows the non-deductible contribution basis correctly. Many online guides show what the completed form should look like for comparison.

I had the exact opposite experience. Found a local CPA who specializes in small businesses and she found so many legitimate deductions I didn't know about. Sometimes it's worth paying more for actual expertise instead of the chains. Maybe try searching for someone who specifically works with your industry?