This is a great question that many parents face when helping their adult children with better banking options. Based on the discussion here, it sounds like the cleanest solution is to contact Marcus directly and have yourself removed as a joint owner, making your kids the sole owners of their respective accounts. Since they're adults (23 and 24) and have been filing their own taxes independently, this makes the most sense. The 1099-INT will then be issued directly to them with their SSNs, and they can report the interest income on their own returns without any complications. If for some reason you need to stay on as a joint owner for backup purposes, then whoever's SSN is primary on each account needs to report the interest income. But honestly, given that they're responsible adults managing their own finances, removing yourself as a joint owner seems like the simplest path forward that avoids all the tax reporting complexities.

I went through this exact situation with my daughter last year. The key thing to remember is that the IRS follows the "whose SSN is on the account" rule, not the "whose money is it" rule for 1099-INT reporting. Since you mentioned you're just there as a backup and your kids are using the funds 100%, I'd strongly recommend calling Marcus and having yourself removed as joint owner on both accounts. Your kids are adults and have been filing independently - they don't really need you as a joint owner for backup purposes, and it's just creating tax complications. If you do this soon (like within the next month), the 1099-INT forms should be issued to your kids directly for this tax year. Just make sure to confirm with Marcus about their cutoff dates for tax document generation. This is definitely the cleanest solution and avoids all the nominee interest reporting headaches that others have mentioned.

I appreciate all the detailed responses here! As someone who's navigated this exact situation, I want to emphasize that the 1095-A filing requirement is really important to get right. I made the mistake of not filing one year when I had zero income but received advance premium tax credits, and it caused major headaches when I tried to renew my marketplace coverage the following year. The key thing to understand is that if you received ANY advance premium tax credits (shown in Column C of your 1095-A), you absolutely must file Form 8962 to reconcile those payments. The IRS treats this as mandatory regardless of your income level. If you don't file, they can block your eligibility for future premium tax credits, which could make marketplace insurance unaffordable. For Drake's specific situation with zeros in Column C - you're likely not required to file just because of the 1095-A, but I'd still recommend filing if you think you might be eligible for any refundable credits. Sometimes people with very low income can claim things like the Earned Income Tax Credit or other credits that result in refunds even with no tax liability. The peace of mind from filing and starting that statute of limitations clock is worth it in my opinion, especially since free filing options are widely available for simple returns.

Just want to add another perspective on this - I work as a tax preparer and see this situation frequently. The confusion around 1095-A filing requirements is super common, so don't feel bad about being unsure! One thing I always tell clients is to look at Box 33 on their 1095-A form. If there are dollar amounts there (advance premium tax credits), filing is absolutely mandatory regardless of income. But even if those boxes show zero, you might still benefit from filing to claim the premium tax credit for the first time, which could result in a refund. Also, for future planning - if you expect to have low or zero income again, consider applying for Medicaid instead of marketplace insurance if you qualify. This would eliminate the 1095-A complexity entirely while still providing coverage. Eligibility varies by state, but it's worth checking since many states expanded Medicaid under the ACA. The bottom line is that when in doubt, it's almost always safer to file than not to file, especially with marketplace insurance involved. The penalties for not filing when required (particularly losing future premium tax credits) are much worse than the minor inconvenience of filing an unnecessary return.

I went through this nightmare last filing season and it turned out to be a timing issue with the IRS databases. Since you mentioned your child's SSN worked fine for business paperwork and school registrations, but this is happening during tax filing, there's likely a lag between when the Social Security Administration updates their records and when the IRS system syncs up. The fact that you filed successfully in April 2023 but are having issues now in March suggests the IRS might be running validation checks against an outdated database snapshot. Try calling the IRS Practitioner Priority Service line early morning (7 AM EST) - they can manually verify the SSN status in real-time and tell you if there's a systemic issue. Don't keep resubmitting electronically as it may flag your return for additional review.

I experienced this exact same issue in February with my daughter's SSN. After spending two frustrating weeks trying different approaches, I discovered the problem was that her name in the IRS system still had her hyphenated last name from when we first got her SSN, but we had legally changed it to a single surname in 2022. Even though all other government agencies (schools, state benefits, etc.) accepted the new name format, the IRS database hadn't been updated. I ended up having to file a paper return with Form SS-5 documentation attached to prove the name change. The key insight here is that the IRS validation system is incredibly strict about exact matches - not just the SSN digits, but also the associated name and birth date must match their internal records perfectly. Since you mentioned this worked fine last year but not now, I'd suggest calling the SSA first to verify what name format they have on file, then cross-reference that with what the IRS expects. Sometimes state vital records updates don't automatically flow to federal databases.

Great question about S-Corp retirement contributions! I went through this exact same analysis last year with my single-member S-Corp. Here's what I learned that might help: You're absolutely right that you can contribute much more than 10%. With your $85,000 salary, you could max out at about $21,250 with the SEP-IRA (25% of compensation). However, I'd strongly recommend looking into a Solo 401(k) instead - it would let you contribute around $44,250 total ($23,000 employee deferral + ~$21,250 employer contribution). One thing to consider: since you're generating $120K in profits but only taking $85K salary, you might want to evaluate if increasing your salary slightly could boost your retirement contributions. Yes, you'll pay more payroll taxes, but the additional tax-deferred savings often outweigh the extra FICA costs. Also, at 42, you're actually in a good position to catch up! You'll get catch-up contributions starting at 50 (additional $7,500 for 401k), and with your strong business income, you have time to build substantial retirement savings. The key is making sure your salary remains "reasonable compensation" for your industry. Since you mentioned graphic design, $85K sounds reasonable, but you might have room to optimize the salary/distribution split for maximum retirement contributions.

I've been following this discussion and wanted to add some perspective as someone who's helped several S-Corp owners optimize their retirement strategies. One aspect that hasn't been fully addressed is the timing consideration for your situation. Since you're 42 and feeling behind on retirement savings, you might want to consider a hybrid approach for the next few years: 1. **Immediate action**: Switch to a Solo 401(k) to maximize current year contributions (as others mentioned, you could go from your current ~$8,500 to potentially $44,250) 2. **Medium-term strategy**: Once you've built up some retirement savings momentum, evaluate whether a defined benefit plan makes sense (as Emma Davis suggested). At your income level and age, you could potentially defer $75,000-$100,000+ annually. 3. **Salary optimization**: Your calculation approach is generally correct, but don't forget that higher salary also increases your Social Security benefits calculation base. At 42, those future benefits have value too. Also consider that as a graphic designer, your "reasonable compensation" could potentially support a salary higher than $85K depending on your specific role, client base, and geographic market. The IRS looks at what you'd pay someone else to do your job - if you're doing business development, client management, creative direction, AND the actual design work, $85K might be conservative. The key is documenting your rationale and comparing to industry standards in your area. Services like salary.com or PayScale can provide supporting documentation for whatever salary level you choose.

Thanks for all the helpful info everyone! Just to clarify my understanding - so I can withdraw up to $10,000 TOTAL across both my Roth and traditional IRAs using the first-time homebuyer exemption, not $10k from each account. And with my Roth IRA, I can also take out all my contributions penalty-free anytime regardless of the exemption, which gives me more flexibility. One follow-up question - does the order matter? Like should I exhaust my Roth contributions first before using the $10k exemption on earnings? Or would it be smarter to use the exemption on my traditional IRA since those withdrawals would be taxable anyway? I'm trying to minimize my overall tax burden while maximizing what I can access for the down payment.

Just wanted to add a practical tip from my recent home buying experience - if you're planning to use IRA funds for your down payment, make sure to coordinate the timing with your lender and closing date. I made the mistake of withdrawing the money too early and had to keep it in a savings account for 6 weeks, which actually complicated my mortgage application because lenders want to see "seasoned" funds. The 120-day rule gives you flexibility, but ideally you want to time the withdrawal so the funds hit your account close to when you'll need them for closing. Also keep detailed records of the withdrawal and home purchase - I saved copies of my IRA distribution form, the closing disclosure, and purchase contract just in case the IRS ever asks for documentation of the first-time homebuyer exemption. Good luck with your home purchase! The market is definitely challenging right now, but every bit of penalty-free access to your retirement funds helps with that down payment.