Thanks for sharing your experience! Could you clarify which specific tax form or schedule you used to list these expenses? And did you have to itemize deductions or was this handled differently?

I used Form 8863 (Education Credits) and claimed the expenses as part of my qualified education expenses for the American Opportunity Credit. The great thing is you don't need to itemize deductions to claim education credits - they're available even if you take the standard deduction. The form has a line specifically for required course materials, which is where these project expenses can fit. Just make sure you have documentation that clearly shows the project was required for your degree program!

This is critical advice! I got audited because I used outdated tax advice from a blog post. Always check that you're looking at the most current IRS publications. For education expenses, Publication 970 is the bible - they update it every year.

That's a really good point I hadn't considered. I'm in Texas so I don't have state income tax, but I did live in California for part of 2020 before moving. Does that mean I need to file a partial year California return for that period?

Yes, you would need to file a part-year resident California return for 2020. California is particularly aggressive with non-filers and has a longer statute of limitations than the IRS for certain things. Since you sold property during that period, California will be especially interested in whether any capital gains tax is due to them. When you file as a part-year resident, you'll only pay California tax on income earned while living there, plus any California-source income (like rental income from California property) earned after you moved. Given the housing market in 2020, there might be significant tax implications depending on how long you owned the California property.

You can use TurboTax for prior years, but you'll need to buy the desktop software for each specific tax year you need to file - the online version only works for current year. And if your situation includes property sales or complex investments, you'll definitely need the premium versions.

Thanks for bringing this up! I did pay for my flight to Atlanta (about $350) plus the hotel for 3 nights (~$600) and the convention entry fee ($150). Would all of these potentially be deductible against the prize money? And where exactly would I list these on my tax forms?

Yes, those expenses would potentially be deductible against your prize money! The flight, hotel, and convention entry fee would all count as expenses directly related to winning the prize. You would list these as a reduction to the income on Schedule 1, Line 8z. For example, if your prize was $2,500 and you had $1,100 in related expenses, you would report "Gaming tournament prize income $2,500 less related expenses of $1,100 = $1,400" on that line. Make sure to keep all your receipts in case of an audit.

Yep, and if you won it while physically in Texas but live in North Carolina, you might need to file a non-resident tax return for Texas too if they require it for prize winnings. Tax rules vary by state!

This is actually smart af. What savings account do you use? I've been thinking about doing something like this because my refunds are always tiny but I suck at saving.

Yes, there are income limits for the Earned Income Tax Credit (EITC). For 2025, if you're single with no qualifying children, you can qualify with income up to about $18,000. With one child, that limit increases to around $43,000. If you're married filing jointly, the limits are higher. At $38k with no children, you'd likely be over the limit for EITC, but if you have a qualifying child, you might still be eligible. There are other credits worth looking into though, like the Saver's Credit if you contribute to retirement accounts, or education credits if you're taking classes.

2 Can you explain how that works? I thought you couldn't "carry forward" Roth contributions like that?

18 You're right that you can't exactly "carry forward" Roth contributions in the traditional sense, but if you're eligible to contribute in the current year, you can apply excess contributions from a prior year to the current year instead of withdrawing them. For example, if you made an excess contribution in 2021, and you're eligible to contribute to a Roth in 2023 but haven't maxed it out yet, you can apply some or all of that 2021 excess amount toward your 2023 contribution limit. You'd still owe the 6% penalty for 2021 and 2022 (if you didn't fix it before the 2022 deadline), but you'd avoid the penalty for 2023 and beyond without having to withdraw funds.

6 I believe the 6% penalty continues indefinitely until you fix the excess contribution, but I'm not sure if there's a point where the IRS won't let you fix it anymore.