Thanks for mentioning that! I hadn't even thought about state taxes yet. Do you know if there's an easy way to figure out what my state requires? I'm in Illinois if that helps.

Most states will follow the federal rules for taxing interest, so if it's on your 1099-INT, you'll likely need to report it on your state return too. For Illinois specifically, you generally report the same interest income as on your federal return. Illinois has a flat income tax rate (currently 4.95%), so you'll pay that percentage on your interest income. The good news is that most tax software automatically handles this for you - once you enter your 1099-INT for federal purposes, it should flow to your state return correctly. Just make sure you actually complete the state portion of your return!

That's a helpful way to think about it! One quick follow-up question - what about interest earned that doesn't get a 1099-INT because it's under $10? Do you still need to report that?

That's terrible advice. Adding more lies will just make this worse. The IRS can look back at school records if they audit education credits, and fabricating a scholarship loss could actually make this look like intentional fraud rather than a mistake, which has much worse penalties.

I wasn't suggesting making up fake documentation or anything that would involve the IRS. Just a personal explanation to the parents that might make the conversation easier. From a tax perspective, they would simply adjust going forward and claim the full amount they're actually paying. But you're right that honesty is probably the best approach here, even if it's difficult. I was thinking more about the family dynamics than the tax implications, which wasn't what OP was asking about.

Do schools issue corrected 1098-Ts in cases like this? I thought they only report what they have on record, and if no scholarship was ever officially recorded, wouldn't the original 1098-T already show zero in Box 5?

You're right - if no scholarship was ever officially recorded by the school, the 1098-T would already show zero in Box 5. What I meant was that OP should verify what's actually on the 1098-T that was issued. Sometimes students misunderstand their financial aid packages, and what they think is a "scholarship" might be recorded differently by the school (like a tuition waiver or discount). The key is making sure the parents have the official 1098-T from the school that accurately reflects what was paid, regardless of what OP told them.

What's the threshold for needing to do the quarterly payments? I'm making about $800/month from my YouTube channel after platform cuts.

The general rule is that you need to make quarterly estimated tax payments if you expect to owe $1,000 or more in taxes when you file your return. With $800/month income (about $9,600 annually), you'll almost certainly exceed that threshold. You also need to pay at least 90% of your current year tax obligation or 100% of last year's tax (110% if your income is over $150,000) to avoid the underpayment penalty. The easiest approach for new creators is often to use the "safe harbor" provision by paying 100% of last year's tax amount through withholding or estimated payments.

You report the full amount as income AND then deduct the platform fees as a business expense on Schedule C. So you're only paying taxes on what you actually received in the end, but the reporting has to show both the full income and the fee deduction separately. It's like if you owned a store - you'd report all your sales (gross) and then deduct your expenses. You don't just report your profit.

Did you get the full amount you were expecting? I'm worried because mine says "approved" but with a slightly different amount than I calculated.

Yes, I got exactly the amount shown on the "Where's My Refund" tool. If your approved amount is different than what you calculated, the IRS probably made an adjustment to your return. This happens a lot - they might have caught a math error or determined you qualified for a different credit amount than what you claimed. The good news is that once it shows "approved" with a specific amount, that's what you'll get deposited. You should receive a letter in the mail explaining any adjustments they made to your original return.

Thanks for the tip! I'll definitely check early morning. My credit union sometimes posts government payments early too. Feeling less anxious now hearing everyone's experiences.

That's normal - TurboTax and the IRS systems don't sync in real-time. TurboTax knows when the IRS acknowledges receipt of your return, but the "Where's My Refund" tool is showing the actual processing status within the IRS systems. I'd trust the IRS tool for the most accurate status.

Dang that's fast! Did either of you claim any credits like earned income or child tax credit? I filed Jan 31 with those credits and still nothing :/

Neither of us claimed EITC or Child Tax Credit, which definitely explains the faster processing. Those credits trigger automatic additional review by law. If you claimed either of those credits, there's a mandatory holding period that prevents the IRS from issuing refunds before mid-February, regardless of when you filed. It's part of the PATH Act to prevent fraud. You should see movement on your refund soon if you haven't already!