Does selecting the wrong option cause interest to keep accruing in the meantime? I'm already paying a pretty big amount for my amended return from 2020 and don't want to get hit with even more interest and penalties.

Yes, unfortunately. Since the payment wasn't properly applied right away, the IRS system didn't recognize that I had paid, so interest continued to accrue for about 2 months until they sorted it out. I did eventually get them to remove the additional interest charges since I could prove I made the payment on time, but it took multiple phone calls and a formal request. The whole hassle could have been avoided if I had just selected the correct form type during the payment process.

It really depends on your credit card rewards. The fee is usually around 1.96-2.20% depending on which service you use. So on $1,300, you're looking at roughly $25-29 in fees. If your card gives you 2% cash back, you're basically breaking even. If you get more (like with travel rewards cards), you might come out ahead. For me, the bigger value was being able to delay the actual payment until my credit card bill was due, giving me another 3-4 weeks to come up with the money. That flexibility was worth the small fee.

Where exactly is the What-If Scenarios tool in TurboTax? I'm looking through the menus but can't seem to find it anywhere. Is it only in certain versions like Premier or Self-Employed?

It's available in the Deluxe version and higher. Look under the "Tax Tools" section on the left navigation panel. If you're using the online version, you might find it under "Tools" or sometimes they call it "Tax Planner" instead of "What-If Scenarios." If you can't find it, another approach is to make a copy of your return (there should be an option for this) and then modify the copy by removing one credit at a time to see how it affects your refund.

No, the IRS doesn't provide that level of breakdown with your refund deposit or check. They'll send you a notice confirming your refund amount was processed, but it doesn't break down which credits contributed what amount. The only way to get that detailed info is either through your tax software analysis, manually calculating it yourself by looking at your forms, or contacting the IRS directly and asking an agent to walk through it with you.

Thanks for clarifying! That's too bad - would be so helpful if they did that automatically. Feels like it would help people better understand their taxes and maybe even catch errors if something looks off compared to what they were expecting.

Is there any official calculator or tool from the IRS to figure this out? I've read Pub 970 but it's still confusing with all the exceptions and special cases.

Unfortunately there's no official IRS calculator specifically for determining your year of education. Publication 970 is the main source, but you're right that it can be confusing. The basic rule is that you need to count academic periods when you were enrolled at least half-time in a degree program. If you're really unsure, the IRS Interactive Tax Assistant (ITA) on their website can help determine if you're eligible for either credit, though it won't specifically tell you what "year" you're in. TurboTax and other tax software also usually have built-in tools to help figure this out based on your answers to their questions.

Wait what? I thought only tuition and fees on the 1098-T counted! You're saying I can claim the $400 I spent on required textbooks too??

Not all education expenses qualify though. I tried to claim my laptop last year and got audited. Make sure it's required by your program and you have documentation from professors.

Thanks for mentioning student loan interest! We both finished paying ours off last year, so we might be able to deduct the interest from those final payments. Is that something we report on a different form than the itemized deductions?

Student loan interest is reported on Schedule 1 as an adjustment to income (sometimes called an "above-the-line deduction"), which means you can claim it even if you take the standard deduction. It's not part of your itemized deductions at all. You should receive Form 1098-E from your loan servicer showing how much interest you paid. The deduction starts phasing out at higher income levels though, so depending on your combined income, you might get a partial deduction or none at all.

This is bad advice. The OP already said their mortgage interest alone exceeds the standard deduction. Plus, if you're close to the line, itemizing state taxes and charitable giving can easily push you over. Missing legitimate deductions is literally giving away your money.

Do you use a tax professional to help with the estimate or do you just figure it out yourself? I'm worried about getting the estimate wrong.

I work with my accountant to make the estimate, but you could definitely do it yourself if you understand your tax situation well. The safest approach is to slightly overestimate what you'll owe. If you end up overpaying, you'll just get that money back as a refund when you file your actual return. For a DIY approach, you can use your previous year's tax return as a starting point and adjust for any major changes in income or deductions. The IRS mainly wants to see that you're making a good faith effort to pay what you reasonably believe you'll owe.

True. I owed about $35k two years ago and couldn't pay it all at once. Set up an installment plan and the process was surprisingly easy. Just had to fill out Form 9465 and was approved pretty quickly.