Former tax preparer here. The confusion might be because you mentioned "claiming your wife" which isn't actually how it works anymore. You file either as "married filing jointly" (MFJ) or "married filing separately" (MFS). If you file jointly, which most couples do because it's usually more beneficial, then the refund belongs equally to both spouses under tax law, regardless of who earned what. It's a joint return with joint liability and joint benefits.

This is actually more complicated than just tax law. While the IRS treats the refund as belonging to both of you when filing jointly, state laws about marital property can also come into play. In community property states, most assets acquired during marriage are generally considered owned equally by both spouses. But in equitable distribution states, it could be treated differently in certain contexts.

LOL at "I did it myself for the first time" - welcome to the club of "I'll never do that again"! 😂 But seriously, don't panic. I was shocked when I got a $4,200 bill from the IRS two years ago. Turned out I had completely messed up reporting my crypto trades (who knew you had to report EACH transaction?!). The good news is that if you respond to them with a reasonable explanation and are willing to work with them, they're actually not the monsters everyone makes them out to be. They put me on a payment plan with minimal hassle.

Before you do anything else, make sure to carefully read through every page of the notice you received. The IRS notice should include a detailed breakdown showing exactly what they believe you reported incorrectly versus what they have on file. Look for things like: - Unreported W-2 or 1099 income that employers/clients sent to the IRS - Incorrect Social Security numbers or dependent information - Math errors in calculating your tax liability - Incorrectly claimed deductions or credits The notice should also clearly state your response deadline (usually 30 days) and provide instructions for how to respond if you disagree. If you agree with their assessment, you can simply pay the amount owed. If you disagree, you'll need to send a written response with supporting documentation. One thing to keep in mind: if this is legitimate, acting quickly is important. The longer you wait, the more interest and penalties will accumulate. But don't rush into paying without understanding what went wrong - you have rights as a taxpayer to dispute incorrect assessments.

wait but what about the taxable portion of social security benefits?? my dad gets social security AND takes 401k money and says his social security gets taxed more cuz of the 401k withdrawls... is that different?

This is such a common source of confusion! I went through the exact same worry when I was approaching retirement. The key thing to remember is that FICA taxes (Social Security and Medicare) are only on "earned income" - basically wages and self-employment income. Your 401k withdrawals are considered "unearned income" or investment income, so they're completely exempt from FICA taxes. What helped me understand it better was thinking about it this way: when you were working and contributing to your 401k, you were still paying FICA taxes on your full gross salary before any 401k deductions. So you've already "paid your dues" to Social Security and Medicare on that money. Now when you withdraw it in retirement, the government just wants their income tax cut, not another round of FICA taxes. The only thing to watch out for is if you're still working part-time in retirement - those work wages will still have FICA taxes, but your 401k withdrawals won't. Hope this helps ease your mind about retirement planning!

This is such great advice from everyone! I'm actually in a similar boat with my partner and we ended up going the separate accounts route after doing a lot of research. One thing that's worked really well for us is using a shared spreadsheet where we both track our individual investment performance and holdings. We can still discuss strategies, share research, and even coordinate our asset allocation across both accounts (like if I'm heavy in tech stocks, he might balance that with more utilities in his account). It gives us that transparency and collaboration we wanted without any of the tax headaches or breakup complications people have mentioned. Plus we can still celebrate wins and losses together - it just makes the paperwork way cleaner come tax time. Sometimes the simplest solution really is the best one!

This has been such a valuable thread! As someone who works in financial planning, I see couples struggle with these decisions all the time. The separate accounts with shared transparency approach that several people have mentioned is really the sweet spot for unmarried couples. One additional thought - if you do decide to go the joint account route despite the complications, make sure to draft a simple investment partnership agreement. It should outline contribution percentages, how decisions get made, what happens if someone wants out, and how you'll handle the tax reporting. Most brokerages won't require this, but having it documented can save you major headaches later. That said, after reading all these experiences, I'd probably lean toward the separate accounts approach too. You can always revisit the joint account idea after marriage when the tax treatment becomes much simpler!

Make sure you explore all benefits you might be eligible for as a widower with children. If your children are eligible for Social Security survivor benefits, those are generally tax-free to the children. You might also be entitled to a $255 lump-sum death benefit from Social Security.

I'm so sorry for your loss, Sunny. Dealing with taxes while grieving is incredibly difficult, and you're asking exactly the right questions. Yes, you can file as Head of Household for the year your wife passed away since she died before July 1st. The IRS considers you unmarried for the entire tax year in this situation, and since you're supporting your children who live with you, you meet the HOH requirements. A few additional things to keep in mind: - When filing your wife's final return, write "DECEASED" and the date of death across the top - You'll sign her return as "Filing as surviving spouse" - Make sure to claim any income she earned up to her date of death on her final return - Consider whether any of her medical expenses paid after death might be deductible on either return The separate filing approach you're considering is completely valid - her final return as married filing separately, and yours as HOH. This gives you flexibility with deduction choices too. Don't hesitate to consult a tax professional who has experience with widower situations if you need additional guidance. There are often overlooked deductions and credits that can help during this transition. Take care of yourself during this difficult time.