You're exactly right, and that might be part of OP's problem. You can't claim education credits for expenses that were covered by tax-free scholarships. It's one or the other. Many tax preparers get this wrong, especially when they don't specialize in education-related tax situations. When I was in school, I actually chose to count some of my scholarship as taxable income so I could claim the education credits, which were worth more to me than the tax I paid on that portion of the scholarship. Tax planning is wild!

Thanks for confirming! That makes sense. I think I need to look closer at my own returns now, since I had both scholarships and education credits. Any idea how far back the IRS typically looks when they find this kind of error? Just wondering if I should proactively amend older returns too.

ALWAYS call first, then follow up with mail. When you call, get the name and ID number of whoever you speak with, and ask them what specific documentation they need. Then mail those exact documents with a cover letter referencing your call and who you spoke with. I've gone through 3 state audits (self-employed) and this approach has consistently worked best.

That's super helpful advice, thank you! Never thought to ask for an ID number but that makes total sense. Did you send things certified mail too or is regular mail sufficient?

That's a really smart approach I hadn't considered. I do have some procedures I've been putting off that aren't urgent. If I bundle everything together in one tax year, that might push me over the threshold where itemizing makes sense. Did you find it complicated to coordinate the timing with your providers?

It wasn't too difficult to coordinate with providers. Most medical offices are used to patients timing procedures for insurance reasons anyway, so they didn't bat an eye when I asked to schedule in January instead of December. Just make sure you're clear about your timing needs when scheduling. And keep in mind that some procedures might have wait times, so plan ahead. Also, don't let tax considerations override medical necessity - if you need something urgently, get it done regardless of the tax implications.

What qualifies someone as a dependent for medical expense purposes? My dad lives with me and I pay most of his bills, but he gets social security. Does that disqualify him?

Thanks for mentioning this! I just checked and it looks like my form does have the right months of coverage checked off. I started with this company in March, and the form shows coverage beginning in April (which makes sense with our 30-day waiting period for benefits). Definitely a good tip to verify this information.

Right?? I have a whole file cabinet of tax forms I've been keeping "just in case" but have never once needed to reference again.

Thanks for the advice! Is the IRS calculator easy to use? We're definitely going to look into increasing our 401k contributions too.

The IRS calculator is pretty straightforward. Just have your most recent paystubs and tax return handy. It walks you step by step and gives you exact numbers to put on your W-4. Took me about 15 minutes to complete. For the 401k strategy, it made a big difference for us. If you both max out at $23,000 each (for 2025), that's $46,000 of income that moves from your highest tax bracket down to zero tax now. Plus it helps with retirement, obviously. The HSA is another great option if you have a high-deductible health plan - that's another $8,300 you can shield from taxes if you're on a family plan.

Usually MFS is worse than MFJ for most people. You lose a bunch of credits and deductions when filing separately. I'm a tax preparer and only recommend it in very specific situations like income-based student loan repayment or when one spouse has sketchy tax issues.

I hadn't even considered the HSA option! We do have a high-deductible plan through my wife's work. Do HSA contributions have the same deadline as IRA contributions where we can make them up until tax day?

Yes, HSA contributions follow the same deadline as IRA contributions! You can make contributions for the previous tax year up until the tax filing deadline (usually April 15th). Your HSA provider will give you the option to designate which tax year the contribution is for when you make it between January and April. For 2025, the contribution limit for family coverage is $8,300 (it may be adjusted for inflation), which gives you significant room to reduce your AGI. The great part about HSAs is that unlike FSAs, the money never expires, and you can invest it for the long term if you don't need it for immediate medical expenses.

Wait, really? I thought EITC was just based on AGI and number of kids. What's this about investment income? Now I'm worried because I sold some stocks this year...