Thanks for mentioning the QBI deduction! I hadn't even thought about that possibility. The project was definitely a one-time thing where I was basically a research subject/participant for about 3 months. I didn't have any real business expenses except maybe using my home internet a bit more than usual for uploading responses and attending a few zoom sessions. Based on everyone's advice, I'm leaning toward filing it as "Other Income" since I wasn't running a business. Does that seem right for my situation?

Based on what you've described, classifying it as "Other Income" on Schedule 1 rather than self-employment income on Schedule C seems appropriate. The key factors are: it was a one-time project, you were more of a participant/subject than a service provider, and you didn't have the intention of creating an ongoing business activity. For future reference, keep documentation about the nature of the project in case there are any questions. The university likely issued a 1099-NEC simply because that's the form they use for any non-employee payment, but that doesn't automatically make you self-employed for tax purposes. The substance of the relationship matters more than the form used to report it.

FreeTaxUSA actually handled my research stipend correctly. You need to go to the Income section, select "Miscellaneous Income" and then choose "Other Income not reported on W-2/1099" instead of selecting the 1099-NEC option. Then you can manually enter the payer info and amount from your 1099-NEC. This puts it on Schedule 1 as Other Income rather than Schedule C.

If I do go to a CPA, what documents should I bring with me? I want to be prepared so I don't have to keep going back with more paperwork.

Bring the deed showing when you were added to the title, the closing documents from the sale, any documentation showing improvements made to the home that might affect basis, and anything showing the original purchase price when your father bought it. For the retirement accounts, bring all 1099-R forms, statements showing the withdrawals and deposits, and documentation from both the old and new retirement plan administrators. Also bring your last year's tax return and any correspondence you've had with the IRS. If you have documentation of any hardship that led to the withdrawals, that could be helpful too as it might qualify you for penalty exceptions.

Do they also need to worry about the Section 121 exclusion for primary residence? If they lived in the house for 2 of the last 5 years, couldn't they exclude some of the gain?

Does putting a rental property in an LLC actually save on taxes though? I thought LLCs are pass-through entities so the tax treatment is the same as individual ownership? Also doesn't it make the mortgage situation more complicated?

You're right that a single-member LLC is typically a pass-through entity and doesn't change the tax treatment by itself. I should have been more clear. The tax savings come from strategies you can implement once you have the proper structure in place, not just from having an LLC. The real benefits come when you combine the LLC with proper tax planning like implementing a management company structure or potentially electing S-corp taxation for your activities depending on your situation. And yes, transferring mortgaged properties into an LLC can trigger due-on-sale clauses in some cases, so that's exactly why I recommended consulting with both tax and legal professionals before making any moves.

What app do you use for storing receipts? I've been trying to find a good one that will organize by property and expense type.

This is really helpful, thank you. Do you know if there's a limit on the amount of books/supplies that can count toward the American Opportunity Credit? I spent about $1,800 on books and another $1,200 on my laptop.

The American Opportunity Credit is calculated as 100% of the first $2,000 in qualified expenses, then 25% of the next $2,000 - for a maximum credit of $2,500. Your $3,000 in expenses would qualify for the full first $2,000 plus 25% of the remaining $1,000, so $2,250 total credit. Remember that the expenses must be required for enrollment in your courses, which books typically are. For the laptop, you'll need to determine if it was required for your specific program of study or just convenient. If your courses required specific software or computing capabilities, you've got a stronger case for including it.

This is great advice. My university's VITA program actually helped me file for hardship consideration with the IRS too. They had specific experience with scholarship tax issues since they see it every year with students.

8 Does Cash App Taxes handle state filing too? Or just federal? I'm in a state with income tax so I need both.

21 Cash App Taxes includes both federal and state filing for free. I've used it in Minnesota which has state income tax, and it handled everything including carrying over the PTC information where needed for state filing.

16 This worked!!! I just went through the IRS Free File portal, clicked on TurboTax, and it actually gave me a message asking if I wanted to switch from Deluxe to Free File. When I said yes, suddenly the $109 fee disappeared and I could enter my Premium Tax Credit info without charge. THANK YOU!!!