I just wanna say this HSA stuff is so unnecessarily complicated! Why are we paying extra just to file a stupid form? Tax filing should be simple and free.

If you're looking for a completely free option that handles HSA forms, you might want to check out FreeTaxUSA. I've used them for the past two years with my HSA and they include Form 8889 in their free federal filing (you only pay for state returns if needed, usually around $15). The interface isn't as flashy as H&R Block, but it walks you through the HSA deduction step by step. With your $3,650 contribution, depending on your tax bracket, you're probably looking at saving anywhere from $400-$800+ in taxes - way more than any upgrade fee would cost. Just make sure you have your HSA year-end statement handy when you file, as you'll need to report both your contributions and any distributions you made during the year.

Thanks everyone for the detailed explanations! This has been incredibly helpful. I was definitely overthinking the 1099 situation. Just to make sure I understand correctly - we need to file Form 1065 (partnership return) and issue K-1s to each partner, but no 1099s for distributions. And if we have any guaranteed payments for services, those go on the K-1 as well, not on 1099-NEC forms. One follow-up question - do we need to send the K-1s to partners by the same March 15th deadline as filing the partnership return, or do partners get more time? I want to make sure everyone gets their tax info in time for their personal returns.

Just wanted to add one more important point that hasn't been mentioned yet - make sure you're tracking each partner's capital account and basis properly throughout the year. This becomes crucial when determining how much each partner can take as distributions without tax consequences. Your basis starts with your initial capital contribution, increases with your share of partnership income and additional contributions, and decreases with distributions and your share of losses. You can only take tax-free distributions up to your basis amount. Anything above that gets treated as capital gains. I learned this the hard way when I took distributions exceeding my basis and got hit with unexpected capital gains taxes. Now I track this monthly using a simple spreadsheet. It's definitely something to discuss with your tax preparer or factor into your planning if you're doing it yourself!

I actually used PayUSATax earlier this year and can confirm it's legitimate - they're listed as an official IRS payment processor. The process was straightforward, though I did get hit with that ~2% convenience fee others mentioned. One thing I wish I'd known beforehand: if you're considering the PayPal option, make absolutely sure you can pay it off within those 6 months. I spoke with someone who missed the deadline by just a few days and got slammed with retroactive interest on the entire amount at something like 24% APR. For what it's worth, I also ended up calling the IRS directly (eventually got through after multiple attempts) to compare their installment plan options. For my situation, their plan was actually cheaper in the long run than the PayUSATax fee, but it really depends on how much you owe and how quickly you can pay it back. The IRS direct payment option with a bank account has no fee at all if you can manage the lump sum. Just make sure whatever route you go, you keep all your confirmation receipts and check your IRS account online to verify the payment posted correctly!

I've been researching tax payment options myself and wanted to share what I've learned. PayUSATax is definitely legitimate - they're an IRS-authorized payment processor, which you can verify on the official IRS website. However, before committing to any payment plan with fees, I'd strongly recommend double-checking your tax calculations first. I've seen several people mention finding missed deductions that significantly reduced their tax bills. Even a small reduction could make the difference between needing a payment plan and being able to pay in full. If you do go with PayUSATax, just be extra careful about that PayPal 6-month promotion. The terms are strict - if you're even a day late on the full payoff, they'll charge you retroactive interest on the entire amount at credit card rates (20%+). That could end up costing you way more than just paying the IRS directly with their installment plan. For comparison shopping, the IRS's own direct payment from your bank account is free, and their installment plans typically charge a setup fee plus interest that might be lower than third-party processor fees depending on your situation. Worth getting the exact numbers before deciding. Keep all your receipts and confirmation numbers regardless of which route you choose!

Something that confused me when my kid was in school - the 1098-T doesn't always match the calendar year expenses! My son's spring semester payment was due in December 2023, but the university reported it on the 2024 1098-T because that's when classes started. This messed up our tax calculations for both years! Also, don't forget that the American Opportunity Tax Credit is available for FOUR years, not just four school years. So if your program takes 5 years, you still only get it for 4 tax years. We learned this the hard way.

I'm dealing with a very similar situation with my twin daughters who are both college sophomores. One key thing I learned from our tax preparer is that even though you didn't receive a 1098-T, you should still keep detailed records of ALL your educational expenses throughout the year. Here's what many people don't realize - just because your tuition is covered by grants doesn't mean you can't have ANY education tax benefits. If you or your family paid for required course materials, lab fees, or other qualified expenses out-of-pocket, those could potentially qualify for education credits even when tuition is fully covered by aid. Also, regarding the excess aid in your checking account - the IRS looks at how you actually used those funds, not just the fact that you received them. If you can document that the money went toward qualified educational expenses (required textbooks, supplies, equipment mandated by your courses), then that portion remains tax-free. Only the portion used for non-qualified expenses (like personal spending, entertainment, non-required items) would potentially be taxable income. I'd recommend starting a simple spreadsheet now to track every educational expense you pay out-of-pocket, even small ones. This documentation could be valuable for future tax years, especially if your financial aid situation changes.

Quick tip from experience - make sure the Roth IRA is actually in your child's name with them as the owner (not beneficiary). I messed this up last year with my son's lawn mowing money. Also keep in mind they can only contribute what they actually earned - so if your child made $410, that's their max contribution for the year.

Just be aware there's also a Schedule H you might need if this is considered household employment. The rules are a bit different than for self-employment and the thresholds are different too. Might be worth double-checking which applies in your specific situation.