What version of TaxAct are you using? I had the same problem until I realized I was using the "Free" version which doesn't support education credits properly. I had to upgrade to the "Deluxe" version to get the full education section where you can enter all the boxes from the 1098-T correctly.

I'm using the Deluxe version already, that's why I'm so confused. Maybe I need to update it? I'll try logging out and back in to see if that fixes it.

This is super helpful, thank you! I just checked again and found that section buried in the menus. You're right - the questions were there, but the software didn't prompt me to go through that section when I entered my 1098 information. I had to manually navigate to it. Is there any way to know what other important tax questions might be hidden like this? I'm worried about what else I might be missing.

I'm glad you found it! Unfortunately, this is a common problem with most tax software - they have the capabilities to handle complex situations, but don't always guide users to the right sections. For major deductions like mortgage interest, medical expenses, and business deductions, I always recommend exploring all the sub-menus manually rather than just following the guided workflow. Another approach is to run a "review" of your return before filing - sometimes the software will flag potential issues like this during the review process. One last tip: if you've already filed with the incorrect mortgage interest deduction, you might need to file an amended return (1040-X) to correct it. Given the loan amount you mentioned, it could make a significant difference in your tax liability.

I've used FreeTaxUSA for years and actually had a similar experience. For my rental properties, they were super detailed, but for my primary residence mortgage over $750K, I had to figure out the limitation myself and manually adjust the deduction. I think they assume users know about this limitation, which is obviously not realistic for most people.

That's interesting about FreeTaxUSA handling rental properties well but missing this for primary residences. Maybe I should give them another look for my rental property taxes next year. I think the core issue is that all these software companies make assumptions about what the average user knows about tax code. The reality is most of us are using tax software precisely because we don't understand all these details and limitations! We rely on the software to guide us through everything relevant to our situation.

I tried setting up an IRS online account but got stuck at the ID verification part. It kept rejecting my driver's license photo. Any tips on getting past that?

I had the same issue with the ID verification initially. Make sure you're taking the photo in good lighting with no glare on your ID. Also, they're really strict about the photo quality - I had to use a different device with a better camera. If that still doesn't work, they offer an alternative verification process through ID.me that some people find easier. You can also request a mail verification code if the digital methods aren't working. It takes longer but it's more reliable if you're having technical issues with the photo verification.

This is a really important point. How do you know if you need to make estimated payments for next year? Is there some threshold?

The married filing separately thing is interesting! I've rarely seen cases where it's beneficial. But what about separated couples who aren't legally divorced yet? Would you have some exception for them?

Good point about separated couples! I'd create a simple "legally separated" status that would essentially treat them as single filers. The current system with MFS is just too punitive with all its limitations and phase-outs. The problem is that MFS was designed to prevent gaming the system, but it's become so restrictive that it actually creates unfair outcomes for people in difficult situations, like those separating or dealing with a spouse who won't cooperate on taxes. A better-designed single status for separated individuals would be much more straightforward.

Average cost basis would be amazing! Also why are crypto transactions so complicated tax-wise? I bought and sold some Bitcoin last year and the tax calculations were insane. Each transaction created a taxable event and I had hundreds.

Wait, does claiming the kid automatically make you Head of Household? I thought you had to have the child living with you for more than half the year for that? How does that work with 50/50 custody?

You're absolutely right to question that - I oversimplified. For Head of Household status, you need to have the child in your home for more than half the year AND provide more than half of the household's financial support. In true 50/50 situations, only one parent will qualify, and it's not automatically tied to who claims the Child Tax Credit. This is actually why it's so important to understand all the different tax benefits - they don't all follow the same rules. For example, the parent who has the child more nights during the year (even by just one night) might qualify for Head of Household, while the other parent might still be able to claim the Child Tax Credit with a signed Form 8332.

My ex and I do exactly this with our kids. You can actually fill out Form 8332 to cover multiple future years. We did one form for a 10-year period specifying which years each of us would claim the kids. Just be super clear about which tax years you're releasing the claims for. Also make a copy for yourself - my ex lost his copy one year and it was a whole thing.