Just wanted to add something that might help with your FAFSA confusion - when FAFSA asks about taxes paid on scholarship surpluses, they're asking about taxes YOU paid, not your parents. Since you haven't been filing your own returns, the answer would be zero for those years. But definitely get caught up on filing those back returns! The IRS is generally understanding when students proactively fix these situations. I was in a similar spot a few years ago and had to file amended returns for two prior years. The process wasn't as scary as I thought it would be. One tip: keep detailed records of what your scholarship money was actually used for. If you have receipts showing you bought required textbooks or lab equipment that wasn't covered by your initial tuition payment, those expenses can reduce your taxable scholarship amount. Many students don't realize they can deduct these qualified educational expenses even if they paid for them with the "excess" scholarship money.

There's no statute of limitations on filing tax returns when you owe money, so you can file those back returns anytime. The IRS typically has 3 years to assess additional taxes after you file, but if you never filed at all, that clock never starts ticking. The good news is that if you're owed refunds (which is possible if you had any tax withholding), you only have 3 years from the original due date to claim those refunds. The IRS often doesn't notice missing returns for small amounts of income, especially for dependents, but it's always better to be proactive. When you do file those back returns, include a brief letter explaining that you weren't aware of the filing requirement for scholarship income but are now voluntarily filing to comply. This shows good faith and can help if there are any penalties. For your textbook and lab equipment receipts, make sure they were truly required for your courses and not just recommended. Required textbooks, lab fees, and equipment mandated by your syllabus all count as qualified educational expenses that can reduce your taxable scholarship amount. Even things like required software or specialized calculators for specific classes can qualify.

I just went through this exact nightmare scenario with my terminated plan at John Hancock last month, so I completely feel your pain! The stress of suddenly having to deal with a forced distribution you never wanted is awful. Here's what I learned that might help you: Don't panic about the 60-day deadline, but definitely don't waste time either. The most important thing is getting that IRA account opened ASAP - even if you're still figuring out the funding situation. Regarding the 20% withholding - yes, you unfortunately do need to replace that full amount to avoid taxes and penalties on it. However, I discovered that some brokerages offer what they call "rollover completion loans" for exactly this situation. Schwab gave me a 90-day loan at a very low rate to cover the withholding amount, which I paid back when I got my tax refund. It was a game changer and saved me from having to liquidate investments or drain my emergency fund. One critical detail: when you deposit the check, make sure your IRA provider codes it correctly as a "60-day rollover contribution" rather than just a regular contribution. This distinction is crucial for your tax reporting. Also, get a certified letter from Transamerica stating this was an involuntary distribution due to plan termination. You'll need this documentation for Form 5329 when you file taxes to avoid the 10% early withdrawal penalty. The whole situation feels incredibly unfair, but there are definitely ways to navigate it without getting financially destroyed. You're asking all the right questions and caught this early, which puts you in a much better position than most people dealing with forced distributions.

I'm in almost the exact same boat as you - former employer just terminated their 401k plan and I'm facing that same 20% withholding nightmare! After reading through all these responses, I'm feeling much more prepared to handle this situation. A few things I wanted to add from my research: **Timeline is everything** - I called my plan administrator three times to confirm the exact date they're mailing the check and requested tracking. The 60-day countdown is scary enough without worrying about postal delays. **Shop around for rollover loans** - After seeing the comments about Schwab's rollover completion loans, I called around. Fidelity also offers them, and my credit union actually had the best rate at 4.9% for 120 days. Definitely worth calling multiple places! **Consider state taxes too** - Something I almost missed is that some states have their own withholding requirements on retirement distributions. My state (California) would have withheld an additional 6% on top of the federal 20%, which would have made the rollover even more expensive. Fortunately, my distribution is small enough that I can avoid this by rolling over to an IRA in a different state. **Document everything obsessively** - I'm creating a dedicated Google Drive folder with timestamps on every email, recorded call summaries, and scanned copies of all paperwork. If the IRS questions anything years from now, I want to be bulletproof. The stress of dealing with something this consequential on such a tight timeline is real, but it sounds like we both caught this early enough to avoid the worst outcomes. Good luck with your rollover!

Quick question for those who've been through this: Does changing to MFS create any issues with the estimated taxes already paid under MFJ? I'm also considering switching but already made quarterly payments jointly with my spouse.

I went through this exact situation two years ago and wanted to share some practical tips for anyone considering the MFJ to MFS switch: 1) **Run the numbers both ways first** - Don't just focus on the QBI deduction. I used a spreadsheet to calculate our total tax liability under both scenarios, including all the credits and deductions we'd lose with MFS. 2) **State tax implications** - Some states require you to use the same filing status as federal, others don't. In my case, our state had different rules that actually made MFS less beneficial at the state level even though it helped federally. 3) **Estimated payment allocation** - We split our estimated payments proportionally based on our separate incomes. So if I earned 60% of our combined income, I claimed 60% of the estimated payments. This seemed fairest and avoided any disputes. 4) **Documentation** - I kept detailed notes about why we chose MFS that year, including calculations showing the tax benefit. Never needed it, but felt good to have it organized. In our case, the QBI deduction saved us about $12k, but we lost roughly $4k in other benefits, so net savings was around $8k. Definitely worth it, but much less than the initial QBI calculation suggested. The switch itself was straightforward - no special forms needed, just file your separate returns by the extended deadline.

I went through something similar last year and learned a few things the hard way. First, definitely keep that W-2G form safe - you'll need it for your tax return. The casino already reported it to the IRS, so there's no hiding from it. One thing I wish I'd known earlier is that you can actually ask the casino to withhold federal taxes when you collect winnings over $5,000 (though not required for your $1,200 win). For smaller amounts like yours, no taxes are automatically withheld, so you'll owe the full amount come tax time. Also, start keeping better records NOW if you plan to gamble again. Even if you can't fully document your past $800 in losses, having a proper gambling log going forward will help if you have future wins. I use a simple smartphone app to track every session - date, casino, game, buy-in amount, and cash-out amount. Takes 30 seconds but could save you hundreds in taxes later. The tax hit on $1,200 probably won't be too brutal - maybe $200-400 depending on your bracket - but it's still real money you need to plan for!

As someone who's been through this exact situation, I'd recommend getting organized now for next year's tax filing. Beyond just reporting the $1200 win, make sure you understand your state's rules too - some states have different thresholds or treatment for gambling winnings. One practical tip: if you're planning to gamble more this year, consider setting up a separate bank account just for gambling transactions. Deposit your gambling budget there and only use that account for casino/gambling expenses. This creates a clear paper trail that makes tracking wins and losses much easier come tax time. Also, don't forget that even smaller wins under $1200 are still technically taxable income - the casino just isn't required to issue a W-2G or withhold taxes. If you have a lucky streak with multiple smaller wins that add up, you're supposed to report those too. Most people don't realize this! The good news is that $1200 is a nice win but shouldn't create a huge tax burden. Just budget for it and enjoy the extra cash you get to keep after taxes!

Just wanted to add that even though the 1095-C codes can be confusing, it's still important to keep the form for your records. While the IRS does receive this information directly from employers, having your own copy helps if there are any discrepancies later. For your specific situation with codes 1E and 2F, those indicate you were offered qualifying coverage that met ACA requirements. But as others have mentioned, you'll want to verify you actually enrolled by checking your pay stubs for premium deductions or contacting your insurance carrier. One thing I learned the hard way - if you had coverage through your employer for the full year, you generally don't need to do anything special on your tax return regarding health insurance. The individual mandate penalty was eliminated for 2019 and beyond, so there's no penalty for not having coverage. The main time you'd need to actively report health insurance info is if you're claiming premium tax credits for marketplace coverage, which wouldn't apply to employer-sponsored plans.

That's exactly right, Miguel! Since the individual mandate penalty was eliminated starting in 2019, you don't need to actively prove your health insurance coverage on your tax return just to avoid a penalty. The 1095-C is primarily for IRS record-keeping and to show that your employer offered qualifying coverage. With codes 1E and 2F, it sounds like you were offered comprehensive, affordable coverage through your employer. As long as you actually enrolled (which you can verify through pay stub deductions or by contacting your insurance provider), you had qualifying health coverage for the year. The only time you'd really need to get into the weeds with health insurance reporting on your tax return is if you purchased coverage through a marketplace and received advance premium tax credits, or if you're claiming other specific health-related tax credits. For standard employer-sponsored coverage, you can generally just keep the 1095-C for your records and file your taxes normally. It's understandable that all these codes are confusing - the health insurance reporting requirements were much more complex when there was still a penalty for not having coverage. Now it's mostly just administrative record-keeping between employers and the IRS.