Can I ask how much the recharacterization paperwork cost you? My broker wants to charge me $50 for excess contribution correction and I'm wondering if that's standard. Also, did the backdoor Roth conversion work well right after the recharacterization?

I went through this exact nightmare last year and finally got it sorted out. The key insight that nobody mentions is that TurboTax processes these transactions in sequence, so the ORDER you enter them matters a lot. Here's what finally worked for me: 1) Enter the Roth IRA 1099-R (code R) FIRST and clearly mark it as a recharacterization 2) Then enter the traditional IRA 1099-R (code 2) and mark it as a conversion 3) Most importantly - when TurboTax asks about the traditional IRA contribution source, you MUST indicate these were "previously taxed" or "non-deductible" contributions The software has a really confusing workflow where it doesn't automatically connect your Form 8606 basis to the conversion calculation. I had to actually go back to my Form 8606 entry three separate times and re-confirm the $4,250 basis before TurboTax finally stopped treating the conversion as taxable income. Also, print out your Form 8606 when you're done and double-check that line 18 shows zero taxable amount for the conversion. That's your proof that everything calculated correctly.

This is such a relatable situation! My wife and I went through the exact same debate three years ago. What finally resolved it for us was realizing that the refund is essentially YOUR money being returned to you - money that you overpaid throughout the year through withholdings and estimated payments. Think of it this way: if you lent a friend $650 and your husband lent the same friend $350, and the friend paid you back $1000 total, would you split that $1000 evenly? Of course not - you'd each get back what you put in. The 65% contribution you mentioned absolutely justifies getting 65% of the refund. The fact that you're also handling more childcare expenses just reinforces that you're already contributing more than your "fair share" to the household finances. One suggestion: maybe propose doing a detailed breakdown together of all tax payments made throughout the year (withholdings, quarterly payments, etc.) so you're both looking at the same numbers. Sometimes seeing it all laid out makes the fairness argument much clearer. You're definitely not being unreasonable here - if anything, you're being quite generous by even considering a 50/50 split when you contributed significantly more.

I've been through this exact situation and completely understand the frustration! After years of keeping separate finances, my partner and I developed a system that works really well. We calculate the split based on actual tax contributions throughout the year, but we also factor in what the joint filing saves us compared to filing separately. Here's what we do: 1) Add up all federal tax payments made by each person (withholdings, quarterly payments, etc.) 2) Calculate what we each would have owed if we filed separately 3) Figure out how much we saved by filing jointly 4) Split the "joint filing savings" 50/50 (since that was a mutual decision that benefited both) 5) Split the remaining refund proportionally based on who contributed what This way you both get credit for making the smart choice to file jointly, but you also get fair treatment based on your actual contributions. In your case with 65% contribution, you'd probably end up with something like 60-62% of the total refund, which seems much more reasonable than 50/50. The childcare costs you're handling absolutely matter too - that's real financial contribution to your family that should be considered in these discussions. You're definitely not being unreasonable for wanting fairness based on what you actually paid in!

I've been following this discussion and wanted to add a few additional considerations that might help with your situation: 1. **Documentation timing**: Make sure you request detailed statements from your LTD carrier showing exactly what periods each payment covered. Sometimes these payments don't align perfectly with calendar years, which can complicate the tax credit calculation. 2. **SSDI taxation going forward**: Since you mentioned ongoing SSDI payments, be aware that these may also become partially taxable depending on your total income (including pension and capital gains). The provisional income test could push some of your SSDI into taxable territory, so factor this into your overall tax planning. 3. **Medicare implications**: With the substantial income changes you're experiencing, make sure to consider how this affects your Medicare premiums if you're enrolled. The Income-Related Monthly Adjustment Amount (IRMAA) could apply based on your modified adjusted gross income. 4. **Record retention**: Keep all documentation related to this repayment situation for at least 7 years. The IRS may have questions about the claim of right credit calculation, especially given the large amount involved. The complexity of your situation really does warrant professional help, but armed with all the great information in this thread, you'll be well-prepared for those conversations. Good luck with getting this sorted out!

This is such a helpful and comprehensive thread! As someone who works in disability benefits administration, I wanted to add one more angle that might be relevant to your situation. Since you mentioned this was employer-sponsored LTD insurance, you should also verify whether your employer reported the LTD benefits correctly on your W-2s for 2023/2024. Sometimes employers mistakenly include LTD benefits in Box 1 (wages) when they should be reported separately, or vice versa. This can affect both your original tax liability and the claim of right credit calculation. Also, given that you're dealing with both SSDI backpay and LTD repayment in the same general timeframe, make sure your tax professional understands the full timeline. Sometimes there can be beneficial timing strategies around when to make the LTD repayment relative to other income events. One practical tip: If you haven't already, request a detailed calculation from your LTD carrier showing exactly how they determined the $76k offset amount. Sometimes there are errors in these calculations, and catching them early can save you from overpaying. I've seen cases where LTD companies failed to account for attorney fees paid from SSDI backpay, or miscalculated the offset periods. The fact that you got such great advice here about the Section 1341 credit and documentation requirements puts you in a much better position to handle this correctly. Best of luck with everything!

This situation is more common than you think, especially with mid-year payroll system changes! The different EINs are definitely the main red flag here - that's not normal for the same employer unless there was a legitimate corporate restructure. Here's my advice based on similar experiences I've seen: **Call the employer immediately** and ask specifically for whoever handled the payroll system transition. Don't accept "both forms are correct" without a detailed explanation. Ask them: - Why are the EINs different if it's the same company? - Was the Statutory Employee classification intentional (this is huge for tax purposes)? - Can they verify the combined wages match their actual payroll records? **Don't file yet** - I know FreeTaxUSA will let you proceed despite the warnings, but those warnings exist for a reason. Filing with incorrect forms and then having to amend later can delay your refund by months and potentially trigger IRS scrutiny. **Get everything in writing** - If they claim both forms are correct, ask for an email explanation of why different EINs were necessary. If they can't provide a clear business reason, push for corrected W-2c forms. The Statutory Employee change is particularly concerning since it affects how the income is reported (Schedule C vs regular wages) and can impact your tax liability significantly. You're being smart by catching this early. Take the extra few days to get proper documentation rather than dealing with potential IRS headaches later!

I went through almost exactly this same situation last year when my company switched from Paychex to Workday! The different EINs are definitely the key issue you need to resolve - that's not normal for a simple payroll system change and could cause major headaches with the IRS if not corrected. When I called my employer about it, they initially brushed me off saying "both forms are correct because of the system change," but when I specifically asked why they needed different EINs for the same company, it turned out the new payroll system had pulled an old EIN from their records by mistake. I had to be pretty persistent to get them to actually investigate rather than just assuming everything was fine. The Statutory Employee classification change is also a huge red flag - that completely changes how the income gets reported (Schedule C instead of regular wages) and can significantly impact your tax liability. If your boyfriend's job duties didn't change from last year, there's a very good chance this was checked in error during the transition. My advice: Call them first thing and ask to speak with whoever managed the payroll transition specifically, not just general HR. Ask for written documentation explaining why different EINs were necessary, and don't file until you get either a satisfactory explanation or corrected W-2c forms. It took about 10 days to get my corrected form, but it was absolutely worth avoiding potential IRS complications later. You're being smart by catching this early - don't let them make you feel like you're being difficult for asking reasonable questions about confusing tax documents!

This is a really common issue that catches a lot of people off guard! You're absolutely right to be thorough by cross-checking between different programs - that level of diligence often reveals these kinds of discrepancies that can be costly if missed. From my experience dealing with similar AMT foreign tax credit situations, FreeTaxUSA appears to be handling this correctly. The key principle is that when you're computing AMT, you need to stay within the AMT "universe" for all related calculations. This means your Form 1116 limitation calculations should indeed use your AMT-adjusted income figures rather than your regular taxable income. The reason the IRS instructions aren't more explicit about this is because they assume you understand that AMT creates a parallel tax calculation system. When Form 6251 adjusts your income by adding back certain deductions and making other modifications, those adjusted figures should flow through to all related forms, including the AMT version of Form 1116. A $2,700 difference is significant enough that I'd definitely recommend getting this right rather than just picking the software that gives the bigger refund. If you want additional confirmation, you might consider reaching out to a tax professional who specializes in international tax issues, or even contacting the IRS directly for guidance on your specific situation. The good news is that once you understand how this works, future years become much easier to handle!

This is exactly the kind of thorough tax preparation approach that saves people from costly mistakes! Your situation perfectly illustrates why the AMT system is so confusing - it creates this parallel tax universe that affects multiple forms in ways that aren't always obvious. You're absolutely right to trust FreeTaxUSA's approach here. The AMT version of Form 1116 should indeed use AMT-adjusted figures throughout the calculation. When Form 6251 modifies your taxable income by adding back the standard deduction and making other AMT adjustments, those modified amounts need to flow through to the Form 1116 limitation calculations. Otherwise, you're mixing regular tax and AMT figures, which defeats the purpose of having separate calculations. The $2,700 difference you're seeing is actually not uncommon when AMT kicks in with foreign tax credits. The interaction between these two complex areas of tax law can create significant swings in your final tax liability. One thing to keep in mind for future years - if you're consistently subject to AMT, you might want to consider tax planning strategies to minimize the impact. This could include timing certain deductions or income recognition to optimize both your regular tax and AMT calculations. Don't go with "whichever gives the bigger refund" - that's a recipe for audit trouble. Stick with the software that's calculating it correctly (FreeTaxUSA in this case) and keep detailed documentation of the calculations for your records.