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PSA for all students: If your income is below $73,000, DO NOT directly go to TurboTax, H&R Block, etc. websites. Instead, access them THROUGH the IRS Free File page (https://www.irs.gov/filing/free-file-do-your-federal-taxes-for-free) if you want to use those services for free! Companies deliberately hide their free versions and use confusing language to get you to pay. There was actually a big scandal about this a few years ago. They advertise "free free free" but then charge you for state filing or when you have a 1098-T. I've used IRS Free File for 3 years as a student with W-2s, 1098-T education credits, and even some side gig income, and haven't paid a cent. Literally saved hundreds of dollars.
Does the Free File program have a mobile app or is it desktop only? My laptop died last month and I'm only using my phone right now.
Most of the Free File options are designed primarily for desktop, but several have mobile-responsive websites that work on phones. TaxSlayer and TaxAct specifically have decent mobile experiences through their Free File programs. If you're limited to just your phone, Cash App Taxes (mentioned in another comment) might be your best bet - it was literally designed as a mobile-first experience and works great on phones. It's free regardless of whether you access it through Free File or directly, and handles education credits without charging.
has anyone here used Credit Karma Tax? i heard they got bought by Cash App but still offer free filing. my roommate used it last year but he doesn't have education stuff like i do
Yes, Credit Karma Tax is now Cash App Taxes. I used it this year with a W-2, 1098-T, and even some 1099-INT from my savings account. Completely free for both federal and state, and it handled my American Opportunity Credit without any issues. The interface is pretty streamlined and worked well on both my laptop and phone.
Just want to add - make sure you also amend your state return! A lot of people fix their federal but forget that the state return needs to be amended too. Most states have their own amendment forms, and the process might be different from the federal amendment.
Good point! Do I need to wait for the federal amendment to be processed before I file the state amendment? Or can I do both at the same time?
You can typically file both amendments at the same time - you don't need to wait for the federal one to be processed first. However, make sure you use consistent information on both amendments. Some states may ask for information about your federal amendment, including any changes to your adjusted gross income. Also, many states have different timeframes for processing amendments than the IRS does. The IRS is currently taking 16+ weeks to process amendments, while some states might be faster or slower. Just keep track of both processes separately and follow up if either takes longer than expected.
Has anyone tried just calling the IRS and asking them to add the W-2 rather than going through the amendment process? My sister did this when she forgot a 1099 and they told her they could just add it to her return.
That's not accurate info. The IRS doesn't "add" documents to an already processed return. They might have told your sister they already had the information from the 1099 issuer and would adjust her return automatically, which they sometimes do with document matching. But for a missing spouse's W-2 on a joint return, they definitely require an amendment. This is too significant a change to handle with a phone call.
Here's what I learned when I dealt with this last year: Any capital improvement to your entire house (like a kitchen remodel) should technically increase your home's basis. For your home office, you can only depreciate the business percentage of that improvement (10% in your case) over 39 years for residential property converted to business use. HOWEVER - be very careful. If you're planning to sell within the next few years, taking these depreciation deductions can complicate things. When you sell, you'll have to recapture any depreciation taken on the business portion of your home, which is taxed at 25% (ouch!). Sometimes it's not worth the small annual deduction.
What about repairs vs improvements? Like if I just replaced a broken dishwasher instead of remodeling the whole kitchen? Would that be fully deductible in the year it's done (well, 10% of it)?
For a repair like replacing a broken dishwasher, you're absolutely right - it would be handled differently than a full remodel. A repair maintains your property in good working condition without adding value or extending its life, so it would be fully deductible in the current year (at your business percentage of 10%). Capital improvements like remodeling that add value or extend the useful life of your property must be depreciated over time. This distinction is important because immediate deductions for repairs can provide better tax benefits in the short term than the small annual depreciation deductions for improvements.
Has anybody used the safe harbor method for home office? It's way simpler - just $5 per square foot up to 300 sq ft. I switched to this method and while I might get a slightly smaller deduction, the paperwork is SO much easier and I don't have to track all these complicated depreciation schedules or worry about recapture later.
One thing that hasn't been mentioned yet - if the payment was specifically designated as "alimony" in the divorce decree, the tax treatment would be different depending on when your divorce was finalized. For divorces finalized AFTER Dec 31, 2018, alimony is NOT taxable income to the recipient (and not deductible by the payer). For divorces before that date, alimony IS taxable income. But from your description, this sounds like a property settlement, not alimony, so it should be non-taxable regardless. Just make sure your sister keeps good documentation in case of an audit.
The divorce was finalized in 2019, but the agreement definitely doesn't call it alimony. It's labeled as "property settlement" in the divorce decree. Is that clear enough for the IRS or does she need additional documentation? And would the extra amount he paid her ($2,500 over the agreed amount) fall under the same category?
If the agreement specifically labels it as "property settlement" in the divorce decree, that's very clear documentation for the IRS. That's exactly what you want - language that explicitly categorizes the payment as division of marital assets rather than support payments. For the extra $2,500, that's a bit trickier. Since it wasn't specified in the original agreement, the IRS might consider it as a separate transaction. If her ex specifically characterized it as interest or compensation for the delay, it could be considered taxable income. If it was presented as an additional property settlement or a gift, it would likely not be taxable to her. I'd recommend documenting any communication about that extra amount (emails, texts) that explains the nature of that additional payment.
Has your sister already received a tax form for this payment? If her ex reported it as income paid to her, she may get a 1099-MISC, which would mean the IRS is expecting her to report it as income. If that happens, she'll need to file her return correctly (as a non-taxable property settlement) and include an explanation with documentation.
This is a really good point. When I went through my divorce, my ex-spouse incorrectly issued me a 1099 for a property settlement payment. I had to file Form 8275 (Disclosure Statement) with my tax return to explain why I wasn't reporting the amount as income. Saved me from an automatic audit flag when the IRS computers saw the 1099 but didn't see matching income on my return.
She hasn't received any tax forms yet, but that's a really good point! I'll tell her to wait before filing her taxes to make sure she doesn't get a 1099 from him. If she does, we'll definitely need to file that Form 8275 with an explanation. The divorce was such a mess that I wouldn't be surprised if he reports it incorrectly just to cause problems.
Omar Hassan
U might b able 2 take advantage of a tax credit instead of a deduction if ur income is low. Look into the Savers Credit if u put $ into retirement or check if ur state has any low income credits. Deductions just reduce ur taxable income but credits directly reduce taxes u owe which is better!!
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Chloe Anderson
ā¢The Savers Credit doesn't have anything to do with medical expenses though? That's for retirement contributions. I don't think there's any tax credit specifically for dental work, just the medical expense deduction that everyone's been talking about.
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Diego Vargas
Has anyone considered that a dental implant might actually count as a capital improvement to your body and should be depreciated over time rather than expensed in a single year? š¤ Just kidding!! Sorry, tax humor. But on a serious note, make sure you keep ALL your receipts, including costs for traveling to and from dental appointments - mileage can add up and is deductible as a medical expense too!
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CosmicCruiser
ā¢Lmao I'm just imagining explaining to an IRS auditor that I'm depreciating my teeth at a rate of 10% per year š "Sir, I've calculated that due to my coffee habit, my dental implant is depreciating faster than the standard rate
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