I went through this exact situation a few years ago and can share what I learned. The IRS doesn't aggressively pursue homebuyer credit repayments initially, but they will eventually catch up through their automated matching systems. When they do, you'll owe the missed payments plus interest that compounds over time. Here's what I recommend: First, gather all your tax returns from 2010 onwards and identify which years you made the $500 repayment and which you missed. You'll need to file Form 1040X (amended returns) for each year you missed. The repayment goes on Schedule 2, Line 10 as "Repayment of first-time homebuyer credit." One thing that surprised me was that the IRS was actually quite reasonable when I contacted them directly about it. They set up a payment plan for the back taxes and interest, and there were no additional penalties beyond the standard interest charges. The key is being proactive - if you wait for them to send notices, you'll pay significantly more in interest. Don't stress too much about this. It's fixable, and you're definitely not the first person to forget about these repayments during major life changes like divorce and job transitions.

I'm in a very similar situation and appreciate everyone sharing their experiences here. I also took the 2008 credit and missed several years of repayments during some major life changes. One thing I wanted to add that might help others - I discovered that even if you think you made the repayment correctly, it's worth double-checking. I thought I had been making payments properly for a few years, but when I reviewed my old returns, I realized I had been entering the repayment amount in the wrong section of the form, so the IRS system wasn't recognizing it as a homebuyer credit repayment. For anyone dealing with this, I'd suggest creating a simple spreadsheet listing each tax year from 2010 forward, whether you made the $500 repayment that year, and calculating your remaining balance. This helped me get organized before deciding how to move forward. The math is straightforward - you start with $7,500 and subtract $500 for each year you properly made the payment. Also, for what it's worth, I called my local Taxpayer Advocate Service office and they were able to provide some general guidance about the process, though they couldn't help with the actual filing. Sometimes local offices are easier to reach than the main IRS lines.

Has anyone had issues with their state taxes and solar credits? I'm in California and have heard there are additional state incentives, but I'm not sure how they interact with the federal credit.

One thing that might help clarify the tax liability vs refund confusion - think of it this way: your tax liability is like the total bill for dinner at a restaurant. Throughout the year, you're making payments toward that bill through payroll withholding. If you overpay (like leaving a $50 tip on a $30 meal), you get change back - that's your refund. But the solar credit applies to the actual meal cost (your tax liability), not just the change you get back. So if your total tax liability is $4,000 and you paid $5,500 through withholding, you'd normally get a $1,500 refund. With an $8,400 solar credit, it would wipe out your entire $4,000 liability, you'd get back all $5,500 you paid in, and you'd carry forward $4,400 to next year's taxes. The key insight is that adjusting your withholding doesn't change your liability - it just changes the timing of when you pay it.

Check if you qualify as a statutory employee - could be middle ground solution. Some workers can be treated as 1099 contractors but don't have to pay full self employment tax. Worth looking into.

I went through almost the exact same situation a couple years ago with a temp agency that should have classified me as W-2 but sent a 1099-NEC instead. Here's what I learned: The key test is who had control over your work. Since your boss told you when to work, likely provided tools/equipment, and you worked exclusively for them during that period, you were definitely misclassified as an independent contractor. I'd recommend starting with a conversation with your former employer before filing any IRS forms. Explain that you believe you were misclassified and ask if they'd be willing to issue a corrected W-2. Many small business owners genuinely don't understand the classification rules and might fix it voluntarily to avoid potential IRS scrutiny. If they refuse, then go the Form SS-8 and Form 8919 route that others mentioned. The SS-8 gets you an official determination, and the 8919 lets you pay only the employee portion of Social Security/Medicare taxes instead of the full self-employment tax. One month of work probably isn't a huge tax difference, but it's the principle that matters. Don't let employers shift their tax burden onto workers - that's exactly why these classification rules exist.

As someone who went through this exact same situation when I became a stay-at-home parent, I can definitely confirm what others have said - your husband cannot claim you as a dependent, and filing jointly will almost certainly save you money. I made the mistake of filing separately our first year after I stopped working, thinking it would somehow be better. We ended up paying about $3,000 more in taxes than we needed to! The main things we lost were the higher standard deduction and some of the child tax credit benefits. One thing I'd add is that even though you don't have traditional employment income, don't forget that any freelance work, side gigs, or even selling items online could count as income that needs to be reported. But even if you have some small amounts of income like that, filing jointly is still almost always better for families with one primary earner and children. Your instinct about joint filing being better for married couples with kids is absolutely correct. Your husband's heart is in the right place wanting to save money, but this is one case where the conventional wisdom really does apply!

Kennedy, I went through this exact same confusion when I became a stay-at-home dad! Your husband's thinking makes logical sense (no income = dependent, right?) but tax law doesn't work that way. As everyone has confirmed, spouses are explicitly excluded from being claimed as dependents regardless of income. I actually ran the numbers both ways when we were in your situation, and filing jointly saved us about $4,800 compared to filing separately. The big wins were the doubled standard deduction and keeping full eligibility for the Child Tax Credit. When you file separately with kids, you can run into income phase-out issues even on a single income. One practical tip - if your husband is still skeptical about the numbers, most tax software will let you prepare your return both ways and compare the results before you actually file. TurboTax, FreeTaxUSA, and others have comparison features. Seeing the actual dollar difference usually settles the debate pretty quickly! Also don't stress too much about not knowing tax rules - this stuff is complicated and counterintuitive sometimes. The important thing is you're asking the right questions now rather than finding out after you file.

One thing nobody mentioned yet - if you made only $2400, look into the Qualified Business Income deduction (Form 8995). It might let you deduct up to 20% of your business income! Definitely worth checking out for small sole proprietors. Also, if you worked from home for your business, don't forget about the home office deduction. You can either do the simplified method ($5 per square foot up to 300 sq ft) or actual expenses method. Just make sure the space is used regularly and exclusively for business.

Great question about the QBI deduction! The phase-out thresholds are pretty high - for 2024, the QBI deduction starts phasing out at $191,950 for single filers and $383,900 for married filing jointly. So with your $2,400 in business income, you're well below that threshold and should be able to claim the full 20% deduction. Just make sure your business qualifies - most sole proprietorships do, but there are some exclusions for certain service businesses at higher income levels (which again, you don't need to worry about at your income level). Form 8995 is pretty straightforward for simple cases like yours. This deduction alone could save you around $480 in taxable income, which is a nice chunk of change when you're just starting out!