This is super helpful! Question though - my daughter's 1098-T has an amount in Box 5 for scholarships. Do I literally just subtract Box 5 from Box 1 to figure out what expenses I can claim for the education credit?

Yes, that's exactly right. Take the amount in Box 1 (payments received by the school) and subtract the amount in Box 5 (scholarships/grants). The result is your eligible qualified education expenses that you can use for calculating education credits. Just be aware that if Box 5 is larger than Box 1, it means the scholarships/grants exceeded the tuition/fees, and you generally can't claim education credits in that case. Also, don't forget that expenses for books, supplies, and equipment required for courses can be qualified education expenses even if they weren't paid directly to the school (so they wouldn't be included in Box 1).

I used TurboTax last year for this. When it asks who paid, you can select "you" as long as you're claiming the student as a dependent. They don't need the breakdown of where each dollar came from - they just need to know if you (as the taxpayer claiming the dependent) are the one claiming the expenses.

The Recovery Rebate Credit refers specifically to the stimulus payments authorized by Congress during the COVID-19 pandemic. There were three main payments: $1,200 (April 2020), $600 (December 2020), and $1,400 (March 2021). The $1,400 one is what the original poster is asking about. If you didn't receive one or more of these payments when they were initially distributed but were eligible, you could claim them as a "Recovery Rebate Credit" on your tax return for that year. The $1,400 payment would have been claimed on your 2021 tax return specifically.

Thanks for explaining! I'm pretty sure I got all three payments back then, but now I'm wondering if I should double-check my 2021 return just to make sure. I remember getting direct deposits for stimulus money but can't remember the exact amounts or when they came in.

Does the 3-year clock start from when the return was due (April 15) or when you actually filed it? I filed my 2021 return late with an extension in October 2022.

The 3-year statute of limitations for claiming a refund generally starts from the original due date of the return (which was April 18, 2022 for 2021 returns) or the date you actually filed, whichever is later. Since you filed in October 2022 with an extension, your deadline would be October 2025 rather than April 2025. That said, it's always better to handle these things sooner rather than later, especially with something like the Recovery Rebate Credit where you might need to speak with the IRS to verify your eligibility.

Do you have any recommendations for tracking business expenses throughout the year? I'm always scrambling at tax time trying to remember what was business vs personal, especially for things like my cell phone bill.

I use QuickBooks Self-Employed which automatically categorizes expenses from my linked accounts and lets me swipe left/right on transactions to mark them as business or personal. Saved me tons of time versus my old spreadsheet method. For mixed-use items like cell phones, I set calendar reminders to check my usage every quarter and document the business percentage. Most tax pros will tell you it's better to track consistently throughout the year than try to estimate everything at tax time. I also take photos of all receipts with the app so I don't have to keep paper copies.

I ran the numbers on this last year. The excise tax is 10%, so on $4,000 that's $400. But if you don't correct it, that excess contribution keeps getting hit with the 10% EVERY YEAR until you fix it. It compounds into a huge problem over time.

Can you do this if your employer contributes to your HSA? Mine puts in $1500/year but I've never added my own money. Also, do you need to keep the physical receipts or are digital copies ok?

Yes, you can absolutely add your own contributions on top of what your employer provides! For 2025, the contribution limit is $4,150 for individuals and $8,300 for families (including employer contributions). So if your employer adds $1,500, you can still contribute up to $2,650 for individual coverage or $6,800 for family coverage. This is a great way to reduce your taxable income. Digital copies of receipts are perfectly fine as long as they clearly show the date, amount, service provider, and type of medical expense. I recommend keeping them in multiple places (cloud storage, external hard drive) since we're talking about potentially decades of storage. The IRS doesn't specify a format, but you need to be able to produce them if audited.

This is super important! I'd add that tracking basis for crypto is an absolute nightmare if you don't stay on top of it from the beginning. I learned this the hard way after trading different coins across multiple exchanges.

Omg this is so important! We learned this the hard way last year. Saved $600 on taxes by filing jointly but my wife's student loan payment went up $175/month. Do the math before you decide!

You're absolutely right about doing the full calculation. A lot of people miss this part of the equation. The student loan impact can completely change what looks like a good decision based solely on taxes. In our case, filing separately costs us about $800 more in taxes each year, but saves my wife nearly $2,400 annually on her income-based student loan payments. That's a net benefit of $1,600 by filing separately, even though it looks worse on paper tax-wise.

This is a really good point. If your spouse is tutoring in people's homes on a regular schedule and they control when and how the work is done, they might qualify as a household employee. This means the family should be paying half of the Social Security and Medicare taxes instead of your spouse covering it all through self-employment tax.