Would this work if the student paid for tuition themselves from their own savings? My son is using money from his 529 plan that's in his name, not mine.

That's a great question - yes, it can still work! What matters is who can claim the student as a dependent, not who actually paid the expenses. Even if your son paid his tuition from his own 529 plan, as long as he qualifies as your dependent (under 24, full-time student, you provide more than half his support), you can claim the education credits on your return. The IRS doesn't track whose bank account paid the school - they care about dependent status.

I had to prove this during an IRS review last year. They wanted documentation for EVERYTHING. Make sure you keep records of all your expenses, income, loans, etc. The housing part is tricky - they count the fair rental value of your parents' support.

What about short term rentals like Airbnb? I have a vacation property I rent out and I'm taking QBI on it, but now I'm worried about the self employment tax thing.

Short-term rentals exist in a gray area that depends entirely on the level of services you provide. If you're just providing the basic rental with minimal services (cleaning between guests, basic amenities), it's still generally treated as rental income without SE tax. If you're providing substantial services like daily cleaning, breakfast, concierge services, guided tours, etc., then it starts looking more like a hotel operation and could trigger SE tax. The more your rental resembles a hotel experience rather than just a place to stay, the more likely you'll face SE tax. This is true even if you're using Airbnb or similar platforms.

Using a property management company actually strengthens your position that it's passive income not subject to self-employment tax. When you hire a management company, you're further removed from the day-to-day operations, which reinforces the passive nature of your investment. The management company might need to pay self-employment tax on their fees (depending on their business structure), but you as the property owner are just collecting passive rental income. This arrangement makes it very clear that you're an investor, not running an active business, so you can still potentially qualify for QBI without worrying about SE tax.

Do you know if the payment shows up before the return is fully processed? Mine came out of my bank already but I'm still waiting on confirmation the return was accepted.

Yes, the payment typically shows up in your IRS online account before your return is fully processed. The payment system and return processing system operate somewhat independently. So you might see your payment listed as "received" while your return is still showing as "processing." In my experience last year, my payment appeared in my IRS account about 3 days after I made it, but my return wasn't marked as fully processed for almost 2 weeks. As long as your payment shows up there, you should be fine even if your return takes longer.

How do you know if you need to make estimated payments? I'm in the same boat this year.

Do you know if HSA contributions work the same way for reducing AGI? I have a high-deductible health plan and wondering if I could make a last-minute HSA contribution to lower my income for financial aid.

Yes, HSA contributions absolutely work for reducing your AGI! For 2024, you can contribute up to $4,150 for individual coverage or $8,300 for family coverage. And you're right, you can make these contributions all the way up until the tax filing deadline (normally April 15, 2025) and still have them count for your 2024 taxes. It's actually one of the best tax advantages available because the money goes in pre-tax, grows tax-free, and comes out tax-free when used for qualified medical expenses. Definitely a great strategy for reducing AGI for financial aid purposes.

This! Financial aid rules are super confusing and inconsistent. My roommate and I both applied for the same grant, but they calculated our eligibility completely differently because of how our parents' income was reported.

I had no idea about these exemptions! We definitely qualify for the homestead one since this is our primary residence. Do these typically have income limits or other requirements? Also, can I apply for 2023 taxes still or would it only affect 2024?

Most homestead exemptions don't have income limits - they simply require that the home is your primary residence (usually you can only claim one homestead exemption in a state). Some states do offer additional income-based exemptions on top of the standard homestead benefit. For 2023 taxes, it depends on your county. Some allow retroactive applications while others don't. Many counties allow you to apply for the current tax year up until their deadline (often in spring). I'd call your assessor's office ASAP and ask if you can still apply for 2023. If not, definitely get your application in for 2024. Even if you've missed the window for this year, getting it set up for next year is still worthwhile - these exemptions typically remain in place automatically for future years once approved.

I've done it twice in the last 5 years without any special service. First time I just submitted photos showing problems with my property (cracked foundation, water damage in basement) and they reduced my assessment by 8%. Second time I printed out assessment values for 6 similar homes in my neighborhood that were valued lower, and they reduced mine by 12%. The key is documentation and being polite but persistent. The assessor's office isn't personally trying to get more tax money - they're just following their procedures and often working with outdated or incomplete info. If you provide better data, many will adjust accordingly.

That's really helpful to know, thanks! Did you have to attend a hearing or was it all done through paperwork? I'm nervous about having to present my case in person to some board.