Did your sister mention anything about whether this affects how quickly we'll get our refunds once Feb 15th hits? Like if we're already in the system, do we get processed faster?

My sister says early filers definitely get processed faster once the Feb 15th date passes. The IRS essentially creates a queue of all the PATH Act returns (ones with EIC/CTC), and they process them in roughly the order received once that date hits. So being already in the system and "accepted" means you're at the front of that line. She also mentioned that most people with straightforward returns who file electronically and choose direct deposit usually see their refunds within 7-10 days after Feb 15th if they filed in January. So you could potentially see your money by Feb 22-25th.

That's totally normal this time of year. Mine was accepted on 1/15 and shows the same thing. It won't update to "Refund Approved" until after they can actually process the EIC/CTC returns after Feb 15th. It's frustrating, but at least we know they have it!

Can you deduct a home office if you're only doing this 1099 work part time? I use my spare bedroom for my freelance design work but it's not my main job.

Yes, you can still claim a home office deduction for part-time self-employment work. The key requirement is that the space must be used "regularly and exclusively" for your business activities. If your spare bedroom is used solely for your freelance design work and not for other purposes, you can deduct it. You have two options: the simplified method (currently $5 per square foot up to 300 sq ft) or the regular method where you calculate the actual expenses based on the percentage of your home used for business.

Would that be better than just using a Roth IRA? I thought those had better long-term tax benefits.

This is his first year of college directly after high school, so we're good on the 4-year limit. Is there anything else I should know about income limits? We make around $95k combined if that matters.

You should be fine with the income limit at $95k combined. The AOTC begins to phase out for modified adjusted gross income (MAGI) above $160,000 for married filing jointly and $80,000 for single filers. Since you're below those thresholds, you should be eligible for the full credit amount. Another thing to remember is to keep good records of all qualified education expenses paid. Make sure you have receipts for tuition, required fees, and course materials like textbooks. Also, expect to receive a Form 1098-T from the college which will help substantiate your claim for the credit.

That's not quite right. The student doesn't need earned income to qualify for AOTC. The requirement is that whoever claims the credit (either the student or the parent) must have a tax liability or the credit is refundable up to 40%. If the parent claims the student as a dependent, the parent claims the credit regardless of who paid the expenses.

Thank you for bringing this up! I actually do have student loans, so that's really helpful to know. Do you know roughly what income level the student loan interest deduction starts to phase out? And would HSA contributions have the same effect of lowering my AGI?

The student loan interest deduction starts phasing out at $75,000 for single filers and $155,000 for married filing jointly in 2024. Since you mentioned making $72,000, you're right at the edge where increasing retirement contributions could make a big difference. And yes, HSA contributions absolutely lower your AGI in the same way 401k contributions do! Both HSA and traditional 401k contributions are pre-tax and reduce your adjusted gross income. This can help you qualify for credits and deductions that have income limitations. In your case, both strategies would work together to potentially keep you fully eligible for the student loan interest deduction.

Generally: HSA first if you have matching funds for it (rare), then 401k up to employer match, then max HSA, then back to 401k. HSA has better tax advantages than 401k since withdrawals for medical expenses are tax-free (401k withdrawals are always taxed as income).

Actually that $12,950 figure is outdated. For 2025 the filing threshold for dependents with earned income is estimated to be around $13,850 due to inflation adjustments. But you're right about the general point - many teen workers won't hit the filing requirement.

Thanks for the correction! You're right that the numbers adjust each year with inflation. The important thing for the original poster to understand is that there's a threshold below which filing isn't required, but that doesn't change the need to complete the W4 accurately for employer withholding purposes.

I tried using it but got super confused by all the questions. Maybe I'm not tech savvy enough but it seemed to assume I knew a lot of tax terminology already. Ended up just taking my best guess on the W4.