That's really interesting! Would students really know enough to handle self-employment questions though? My main concerns are around business deductions and depreciation.

The students themselves might be hit or miss on complex issues, but the supervising CPAs definitely know their stuff. I should've been clearer - the students do basic returns, but the professors oversee everything and handle the more complex questions like business deductions. When I went, I specifically mentioned I had self-employment questions, and they made sure the professor reviewed that part of my return. They actually found a home office deduction I had missed!

This is right but don't forget you have to attach a statement to your return saying you're making this election! I forgot last year and it was a headache.

Would you recommend any specific free software for students? I tried TurboTax last year but ended up getting charged at the end when it turned out my "simple return" wasn't so simple because of my education credits.

I personally recommend FreeTaxUSA for students. Unlike TurboTax, they don't bait-and-switch you with unexpected charges for education credits or simple deductions. Federal filing is completely free, and state returns are only about $15 if you need them. The IRS Free File program is also good if your income is under $73,000. You can access various free options through the IRS website, and they're required to keep it truly free for qualifying taxpayers. Just be careful to access them through the official IRS.gov site rather than going directly to their websites, as that's how you ensure you get the truly free version.

But what about student loan interest? I have loans and heard that's deductible somewhere on the form.

Thanks for this simple breakdown! So just to confirm - in my case with $10,400 paid, $6,500 deducted, and $1,400 refunded - the refund is completely non-taxable? And would I still get a 1099-G from my state for the refund even though I don't need to report it?

Yes, your $1,400 refund would be completely non-taxable since it's less than the $3,900 difference between what you paid and what you were able to deduct. And yes, you'll still receive a 1099-G from your state because they don't know your specific federal tax situation. You'll need to report it on your federal return, but the tax software or worksheet will help you calculate that the taxable amount is $0. Don't skip reporting it just because the taxable amount is zero - that can trigger a mismatch notice from the IRS.

You'll need to report the state refund on Schedule 1, Line 1. But you should complete the "State and Local Income Tax Refund Worksheet" in the 1040 instructions first to determine how much (if any) is actually taxable. If you're dealing with the SALT cap situation described in this thread, you may well calculate that $0 is taxable, but you still need to work through the worksheet.

Thanks for the advice! I did save my confirmation numbers from all three payments. Do you think I should call them now or wait for the online system to update after my last payment processes?

I would wait at least 14 days after your last payment for the system to update completely. If you still see a discrepancy after that, then call them with all your confirmation numbers ready. Most of these timing issues resolve themselves within two weeks. The IRS is notorious for sending out notices that are already outdated by the time you receive them. The online account is generally more current than any paper notice.

That's not actually good advice. Electronic payments through Direct Pay give you an immediate confirmation number and are generally credited to your account much faster than checks. The benefit of the postmark date only matters if you're cutting it close to a deadline.

Thanks for this suggestion! Do you know if the Free File Fillable Forms are user-friendly for someone who doesn't have much experience with tax forms? I'm a bit worried I'll mess something up if I try to do it all manually.

The interface is definitely not as user-friendly as TurboTax. It's basically just the actual tax forms in electronic format with minimal guidance. There are some basic calculations built in, but it won't walk you through what to enter or provide explanations like commercial tax software does. If you're including something straightforward like a single 1099-G, it might be manageable. You'd essentially be copying most information from your original return and just adding the additional income. The key is to take your time and double-check everything. The IRS instructions for Form 1040-X are actually pretty detailed if you follow them carefully.

Wait, are you saying some unemployment benefits might not be taxable for 2023? I thought that was only a 2020 thing during the height of COVID. Can you provide more details on this announcement?