Have you considered filing for legal separation? Unlike your current situation, which is informal separation, a legal separation is recognized by the IRS and could potentially help with your filing status going forward. It's like being in the middle ground between marriage and divorce - you're still technically married, but the court has formally recognized your separation. This wouldn't fix past filings, but it could clarify your path forward without having to go through a full divorce if that's not what you want. The requirements vary by state, so you'd need to check what's available where you live. In some cases, it might be simpler than you think and could save you from continued tax complications.

I've been following this thread closely because I'm facing a similar situation, and I wanted to share what I learned from consulting with a tax professional last month. The most important question that hasn't been directly answered yet is: Do you have any qualifying dependents (children, parents, or other relatives) who lived with you for more than half of each tax year since 2016? This is absolutely critical because without a qualifying person, you cannot file as Head of Household regardless of your marital or living situation. If you don't have qualifying dependents, then unfortunately you should have been filing as Married Filing Separately for all 8 years. The financial impact could be substantial - I calculated that for my income level, the difference between HOH and MFS was about $1,800-2,200 per year. Here's what I'd recommend based on what my CPA told me: 1. First, determine if you actually had qualifying dependents each year 2. If not, calculate the potential tax difference for at least the last 3 years 3. Consider proactively filing amended returns (Form 1040X) rather than waiting for the IRS to discover the issue 4. If the amounts are significant, you can request a payment plan The good news is that if you voluntarily correct the error, you'll typically avoid accuracy-related penalties (though you'll still owe interest). My tax professional said being proactive usually results in much better outcomes than waiting for an IRS notice.

5 Something nobody mentioned yet - check if your parents are claiming you as a dependent on their taxes! This is super important. If they are, you need to check a box on your return indicating this. It affects which tax credits you can claim. When I was 20 and filed my first return from my coffee shop job, I messed this up and both my parents and I claimed me, which caused a huge headache with the IRS sending letters later.

16 Don't forget about state taxes too! Your W-2 might have state tax info on it, and depending on where you live, you might need to file a state return in addition to federal. Some states don't have income tax tho.

Just want to share that I went through this EXACT situation in 2023. I was filing 940/941 for my nanny all year and then realized I should've been using Schedule H. I ended up calling my local IRS Taxpayer Assistance Center and scheduling an in-person appointment (way easier than phone). The IRS rep helped me fill out my Schedule H correctly, essentially zeroing out what I owed by entering my previous payments. They also helped me submit a form to close out my 940/941 filing requirement going forward. Worth noting: they told me the 940/941 approach is actually MORE accurate technically, but Schedule H is specifically designed to simplify things for household employers. So you actually did it the "more correct but more complicated" way!

This is such a common confusion for household employers! I went through something similar when I hired a part-time caregiver for my elderly mother. The good news is that you're not in trouble - you've actually overpaid your due diligence by using the business forms. Here's what I learned from my tax preparer: when you file your Schedule H this year, you'll calculate the total household employment taxes owed, then subtract what you've already paid through your 940/941 filings. This should result in zero additional tax due (or possibly even a small refund if you overpaid slightly). The key is documentation - keep copies of all those 940/941 forms and payment confirmations. If the IRS ever questions the Schedule H filing, you'll have clear proof that you paid the correct amounts, just through a different (but valid) method. Going forward, I'd recommend switching to Schedule H since it's much simpler for household employers. Just remember to file those final forms as others mentioned to close out the 940/941 system properly.

Just wanted to share my experience as someone who went through IRA withdrawals as a non-resident alien last year. The key thing I learned is that timing matters a lot - if you contributed to your IRA while you were a US tax resident (which sounds like your case with the H1B), those contributions may be treated differently than if you had contributed as a non-resident. I'd strongly recommend getting professional help for your specific situation. The treaty benefits with India can be significant, but the application process is tricky. My financial institution initially applied the full 30% withholding even though I was entitled to the reduced treaty rate. I had to file Form 1040NR to get the overwithholding back, which took about 8 months. One important tip: make sure to file your W-8BEN with your IRA custodian BEFORE you make any withdrawals. Even if they mess up the withholding initially, having it on file helps establish your treaty claim later. Also, keep detailed records of when you made each contribution and your tax residency status at those times - the IRS may ask for this information. For HSA withdrawals, the rules are even more complex because of the medical expense qualification requirements. You'll want to be very careful about documentation there.

I've been following this thread closely as I'm in a very similar situation - non-resident alien with both IRA and HSA accounts from my time on an H1B visa. The information shared here has been incredibly helpful, especially about the India tax treaty benefits. One additional point I'd like to add based on my research: if you're planning multiple withdrawals over time, consider the timing carefully. The IRS looks at your tax residency status on the date of each distribution, not when the contributions were made. So if your residency status changes during the year, it could affect the tax treatment of different withdrawals. Also, for those dealing with HSA withdrawals as non-residents, I found that keeping detailed records of all medical expenses (even those incurred abroad) is crucial. The IRS Publication 502 lists qualifying medical expenses, and many expenses incurred overseas do qualify as long as they meet the US criteria. However, you'll need proper documentation and potentially currency conversion records. Has anyone dealt with state tax implications on these withdrawals? Some states continue to tax former residents on retirement account distributions even after you've moved abroad, which could add another layer of complexity to consider.

A lot of good advice here but something important is being missed - the SECURE Act changed the RMD age from 70½ to 72, and then SECURE 2.0 changed it again to 73 for people born 1951-1959. Your father being 79 now (born around 1945?) would have hit RMD age under the old rules. Also, depending on how small the Simple IRA is, you might want to consider a full withdrawal to simplify things going forward, especially if managing annual RMDs will be challenging with his condition.

This is a challenging situation but you're taking the right steps to get your father back into compliance. Based on my experience helping elderly clients with similar issues, here are a few additional considerations: 1. **Documentation timing is crucial** - Get a letter from his doctor that specifically states when his cognitive decline began affecting his ability to manage financial affairs. This will be key for the penalty waiver requests. 2. **Consider the timing of distributions** - Rather than taking all missed RMDs immediately, you might want to spread them across 2024-2025 to manage the tax impact, while still filing the 5329 forms for each missed year. 3. **State tax implications** - Don't forget to check if your state has any additional requirements or penalties for missed RMDs. 4. **Future planning** - Once you get this resolved, consider setting up automatic distributions from the IRA to prevent future missed RMDs, especially given his condition. The IRS really is understanding in these situations when there's documented medical cause. Focus on getting that medical documentation first, then work through each year systematically. A tax professional experienced with elder financial issues would be a good investment here given the complexity and multiple years involved.