Thanks for clearing that up! So there's no way to reorder the credits even with additional forms. That's disappointing but good to know. Do you know if adjusting withholding for next year would help maximize the use of carried-forward adoption credits? I'm trying to ensure we can use as much as possible of the carried forward amount.

Adjusting your withholding won't directly help you use more of the adoption credit, as that doesn't change your actual tax liability - it just changes how much is paid throughout the year versus at filing time. What could help is planning to have more taxable income in future years (if possible) or timing certain deductions differently. For example, you might consider deferring some deductions to a future year when you don't have as many credits, which would leave more tax liability for your adoption credit to offset. A tax professional could help you model different scenarios based on your specific situation to maximize the credit usage over the 5-year carryforward period.

That's really interesting! I hadn't considered filing an amended return. Did you have to provide additional documentation to support the changes? And approximately how long did it take for the amended return to be processed? I'm wondering if this approach might work for us too.

Thanks for the detailed list! I didn't realize payment processing fees were deductible - that's actually a significant amount for my business. Is there a good rule of thumb for determining what percentage of my internet and phone to deduct? I use both for business but obviously personal use too.

For internet and phone, you need to determine a reasonable business-use percentage. If you use your cell phone 70% for business and 30% personal, you can deduct 70% of those costs. Just make sure you can justify the percentage if asked. For payment processing fees, absolutely deduct them all! Those PayPal/Stripe/credit card fees add up quickly and are 100% legitimate business expenses. Don't forget the monthly fees plus the per-transaction percentages. Many new business owners miss these, but they can easily add up to thousands of dollars in deductions over a year.

I second this. Using a tax professional my first 2 years taught me how to properly do my taxes. Now I use TurboTax but actually understand what I'm doing. The education alone was worth the fee, and they likely will save you more than their cost.

Thank you for this explanation! I just checked and it looks like they ARE filing something called an 1120-S now instead of the Schedule C. So does this mean we're actually making the same amount of money but it just looks different on paper? Could this hurt my chances for need-based scholarships?

Yes, that's exactly what's happening! With an S-Corporation (Form 1120-S), the income gets reported differently even if the actual money coming in is the same. The business income flows through to your parents' personal return on Schedule E rather than Schedule C. This could definitely impact your need-based scholarships because the FAFSA and many scholarship programs look at adjusted gross income. With an S-Corp structure, sometimes more of the business income flows to the personal return because expenses get handled differently. Your parents should talk to their tax preparer about optimizing their S-Corp approach for both tax savings and financial aid purposes. There are legitimate strategies to properly categorize business expenses on the 1120-S that might help reduce the reported income while still following tax laws correctly.

This is actually a really good point. When I switched my restaurant to an LLC, we had to change how we tracked inventory and it made our first year look WAY more profitable than it actually was because of timing differences. It evened out the next year.

Does WMR work differently for amended returns? I filed an amendment about 5 weeks ago and it's still not showing up anywhere.

Amended returns are completely different! For those, you need to use the "Where's My Amended Return" tool instead of the regular WMR. It's a separate system entirely. Amended returns also take much longer to process - the IRS says to allow up to 16 weeks (although in recent years it's been taking even longer for many people). The tracking for amendments is also much less detailed than regular returns. You'll typically just see "received," "adjusted," or "completed" without the specific deposit information that the regular WMR provides.

OMG this happened to me too!! So frustrating. Does anyone know how many times is "too many" before it locks you out?

Is there a simple way to check if your withholding is correct? I just started a new job and don't want to be surprised next April.

The IRS has a Tax Withholding Estimator tool on their website that's pretty straightforward to use. You input your income, filing status, and other tax situations, and it calculates whether your current withholding is appropriate or if you need to adjust your W-4. I'd recommend running this calculator midway through the year to make sure you're on track. It's especially important if you have multiple jobs, a working spouse, or any significant changes in your financial situation during the year.

It does seem unnecessarily complicated, but there are some free resources that can help. I've been using the free filing options through the IRS website for years and haven't had any issues. They partner with several tax software companies that offer free filing if your income is below a certain threshold.