I think there's some misunderstanding about how the offset system works: • The debt WILL appear in the Treasury Offset Program database • You SHOULD receive a notice from the creditor agency (state unemployment) • The offset WILL appear on your tax transcript, but possibly not until after processing • The BFS (not IRS) handles the actual offset process • You CAN call TOP directly at 1-800-304-3107 to verify debts • You MAY have appeal rights depending on the debt type I appreciate all the insights shared here. This helped me understand the process much better!

Based on my experience dealing with this exact situation last year, I can confirm that unemployment overpayments will typically show up in the Treasury Offset Program before they take your refund, but the timing and visibility can be inconsistent. Here's what actually happened in my case: 1. I received a generic overpayment letter from my state unemployment office in October 2. In December, I checked the TOP database by calling 1-800-304-3107 and confirmed my debt was listed 3. When I filed my taxes in February, there was no indication on my initial transcript 4. My refund was processed but reduced by the overpayment amount 5. Code 898 appeared on my transcript about 10 days AFTER the offset occurred The key lesson: don't rely solely on your tax transcript for advance warning. If you suspect you might have an unemployment overpayment, proactively call the TOP line or contact your state unemployment office directly. The "60-90 day advance notice" rule exists on paper, but in practice, many people (myself included) don't receive adequate warning. I'd recommend checking both your state unemployment portal and calling TOP directly if you're concerned. Better to know now than be surprised when your refund is smaller than expected!

I'm dealing with something similar right now - my 15-year-old decided to file independently after getting their first W-2 from a part-time job. What a mess! I had no idea this could happen until my return got rejected too. Reading through everyone's experiences here is both helpful and terrifying - 14+ weeks seems like forever when you're counting on that refund. I'm definitely going to follow the advice about having my kid file an amended return immediately when the system opens up on Feb 15th. One question I have - has anyone tried including a detailed cover letter with their paper return explaining the situation upfront? I'm wondering if being proactive about explaining the conflict might help the IRS processors understand what happened and maybe flag it for faster review. Or does that just add more paperwork that slows things down? Also, @Connor O'Neill, thanks for the tip about withdrawing the rejected e-file - I had no idea that was something you could do and it makes total sense to avoid system confusion.

This exact scenario happened to me last year with my 16-year-old, and I completely understand the frustration! The good news is it's definitely resolvable, but patience is key. Here's what I learned from my experience: Paper returns with dependency conflicts are currently taking 12-16 weeks to process, not the usual 6-8 weeks. The IRS has to manually review these cases, which adds significant time. A few things that helped me: 1. Keep meticulous records of support expenses (housing, food, medical, etc.) - you'll likely need to prove you provided over 50% of his support 2. Have your son file that amended return the moment it's available on Feb 15th - don't delay even a day 3. Include a brief cover letter with your paper return explaining the situation and referencing that an amended return will be filed When I called the IRS after 10 weeks, they confirmed my paper return was received and being processed, which gave me peace of mind. The representative mentioned that having the amended return filed early actually helped move things along. My refund came through after 14 weeks total. It's a long wait, but hang in there - being head of household for the first time after divorce is stressful enough without this added complication. You're handling it exactly right!

I can confirm that everyone here is correct - you absolutely need to use the regular monthly long-term AFR of 1.72%, not the adjusted AFR of 1.31%. I recently helped my sister navigate this exact situation when she was setting up a family loan for her home purchase. The adjusted AFR is used for very specific tax situations involving tax-exempt bonds and certain income calculations that don't apply to family mortgage loans at all. Your dad's accountant is spot-on with this advice. A few things I learned that might help you: - The 1.72% is the minimum rate to avoid gift tax issues, but you can go higher for extra safety - Make sure your loan term is actually over 9 years to qualify for the long-term AFR (if it's 3-9 years, you'd need the mid-term AFR instead) - The rate you set gets locked in for the entire loan term, so you won't need to adjust it later Most importantly, document everything properly! We created a formal promissory note with clear payment terms and recorded the mortgage with our county. The IRS wants to see that you're treating this like a real commercial loan, not just a family arrangement. Regular payments and proper documentation are key to avoiding any issues. The process worked out great for us - my sister gets the mortgage interest deduction and our parents report the interest income correctly. Just make sure to treat it seriously from day one!

I'm in a very similar situation and have been researching this extensively. Your dad's accountant is absolutely right - you must use the regular monthly long-term AFR of 1.72%, not the adjusted AFR of 1.31%. The adjusted AFR is only used for very specific tax calculations involving tax-exempt obligations and certain bond computations that have nothing to do with family mortgage loans. Using the 1.31% rate would put you well below the IRS minimum threshold, and the difference between what you should charge (1.72%) and what you actually charge (1.31%) would be considered a taxable gift. A few key points from my research: - Since this is for a house purchase, make sure your loan term is actually over 9 years to qualify for the long-term AFR - You can use a rate higher than 1.72% for extra safety - many families round up to 2% - The AFR you choose at loan origination stays fixed for the entire term - Treat this exactly like a commercial loan with proper documentation, regular payments, and clear terms I'd also recommend recording the mortgage with your county if possible. It creates an official record that helps establish legitimacy and allows you to claim the mortgage interest deduction. The recording fee in most areas is under $100 and well worth it for the tax benefits and legal protection. The IRS really scrutinizes family loans to ensure they're legitimate debt arrangements versus disguised gifts, so getting the documentation right upfront will save you potential headaches later. Good luck with your home purchase!

Just wanted to add - be VERY careful about the "providing more than half the cost of maintaining the home" requirement for HOH. The IRS looks at this closely. My friend got audited specifically on this point. Make sure you keep good records of what you pay for: rent/mortgage, property taxes, utilities, repairs, food consumed in the home, etc. Total it all up to prove you're over the 50% threshold. My friend ended up having to pay back taxes plus penalties because he couldn't prove he paid more than half when asked.

This is a great question that many unmarried couples face. What you're describing is actually completely legitimate under IRS rules - you can file as Head of Household while your girlfriend claims your daughter as a dependent, and this could indeed save you significant money. The key requirements you need to meet are: 1. Your child must live with you for more than half the year (which sounds like she does) 2. You must pay more than 50% of the household expenses (rent/mortgage, utilities, groceries, etc.) 3. You and your girlfriend must agree on this arrangement The IRS specifically allows the "qualifying person" for HOH status to be different from who claims the child as a dependent. Since you're in a higher tax bracket, having your girlfriend claim the child tax credit while you get the HOH filing status benefits makes perfect financial sense. The tax software questions about support and living situations are normal - they're just verifying you meet the IRS requirements. Keep good records of your household expense payments (bank statements, receipts, etc.) in case you ever need to prove you pay more than half the costs. You're not doing anything wrong here - you're just optimizing your tax situation within the rules. Many tax professionals actually recommend this exact strategy for unmarried couples in similar income situations.

Has anyone checked if there might be a simple data entry error? I once had a $900 difference just because I entered a number wrong in the federal withholding box. Double-check the withholding amounts on both W2s and make sure they're entered exactly right in TaxAct.

This is a really frustrating situation but unfortunately pretty common! I work as a tax preparer and see this happen a lot when people try to do their own taxes after getting a professional estimate. A few things that could explain the $1,400+ difference: 1. **Multiple job withholding calculation**: With two W-2s from different parts of the year, the withholding tables at each job might not have accounted for your total annual income. This can result in under-withholding that reduces your refund, but tax software sometimes miscalculates this. 2. **State tax considerations**: Make sure you're looking at the same thing - federal refund vs. total refund including state. Sometimes people compare apples to oranges here. 3. **Filing status**: Even small differences in how filing status is determined can make a huge impact on your refund amount. My advice: Ask your tax preparer for a detailed breakdown of exactly what deductions and credits she's claiming. She should be able to show you line by line what's creating the difference. If everything looks legitimate, it might be worth paying her fee to get the larger refund. But if you can't get a clear explanation of where that extra $1,400 is coming from, I'd be cautious about proceeding.