One other thing nobody's mentioned - check if your parents ever filed Form 5498-ESA. This form reports Coverdell ESA contributions for each year, and your parents should have received one for each year they contributed. If they kept their tax records, these forms would provide official documentation of the contribution amounts.

I went through this exact same headache two years ago with my own Coverdell ESA! The blank basis on the 1099-Q is so frustrating when you're trying to file. Here's what worked for me: I started by gathering every single statement I could find, then created a spreadsheet tracking all contributions chronologically. Don't forget to check for any contributions that might have come from grandparents or other relatives - those count toward your basis too. One thing that really helped was calling TD Ameritrade directly (not just emailing) and asking to speak with someone in their retirement/education account department. Even though they don't track basis, they sometimes have more detailed transaction histories than what shows up on your regular statements. They were able to pull up some older contribution records that I didn't have. Also, if your parents ever rolled money from one Coverdell to another (like when you transferred ownership), make sure you account for the full contribution history, not just what happened after the transfer. The good news is that once you figure out your basis, the tax software should handle the rest pretty smoothly. FreeTaxUSA is actually pretty good with education account distributions once you have the right numbers.

5 Has anyone addressed whether this could be an intentional income-shifting strategy by the mom? I've seen small business owners do this to reduce their own tax liability by "paying" family members. The IRS is aware of this practice and does scrutinize family business arrangements. If the child isn't actually performing meaningful work worth $6,300, or if they're not being paid market rates for the work, this could be problematic in an audit.

You're absolutely right to be concerned about this situation. As several others have mentioned, the $400 threshold for self-employment income is key here - your daughter definitely needs to file. However, I'd strongly recommend getting professional help before proceeding. The classification of a 12-year-old as an independent contractor is highly questionable and could trigger an audit. The IRS looks closely at family business arrangements, especially when children are involved. A few red flags I see: 1) A 12-year-old typically can't meet the "independence" test for contractor status, 2) The amount seems high for basic filing/sorting work by a child, and 3) This could be viewed as income shifting to avoid taxes. I'd suggest consulting with a tax professional who can review whether this should have been handled differently (like employee wages with FICA exemptions for children in family businesses) and help you navigate the filing requirements properly. The goal should be compliance, not just getting through this year's filing.

Has anyone had experience with changing the account owner on a 529 plan? I'm thinking about making my son the owner of his 529 to simplify this whole process for future years.

Just went through this exact situation last year with my daughter! The key thing to remember is that even though you own the 529 account and receive the 1099-Q, your son can absolutely claim the education credits on his own return as long as he's not your dependent. Here's what we learned: The 1099-Q itself doesn't need to be "reported" as income if all the distributions went toward qualified education expenses. Your son would claim the American Opportunity Tax Credit or Lifetime Learning Credit based on the actual tuition and fees paid, regardless of the funding source. One important note - make sure to run the numbers both ways before deciding. Sometimes parents in higher income brackets actually benefit more from claiming the dependent exemption than the student gains from the education credits, especially if the student has little other income. But if you're phased out of the education credits due to income limits, then having your son claim himself usually makes more sense. Also keep good records showing the 529 distributions matched up with qualified expenses, just in case the IRS has questions later. The account ownership doesn't matter for tax purposes - what matters is who the beneficiary is and whose education expenses were paid.

Has anyone used TurboTax for this situation? I'm wondering if it correctly handles Roth IRA withdrawals for education expenses or if I need to manually override something.

One thing to be extra careful about - make sure you understand the timing rules for "qualified higher education expenses." The IRS requires that the expenses be paid in the same tax year as your withdrawal, and they must be for you, your spouse, your children, or your grandchildren who are enrolled at least half-time in an eligible institution. Also, you need to reduce your qualified education expenses by any tax-free assistance you receive - like scholarships, grants, employer tuition assistance, or even American Opportunity Tax Credit amounts. So if your tuition is $10,000 but you get a $3,000 scholarship, you can only count $7,000 as qualified expenses for the penalty exception. I learned this the hard way when I forgot to subtract my Pell Grant amount and had to amend my return. The IRS caught it during processing and sent me a notice asking for clarification. Fortunately I had kept all my documentation, but it delayed my refund by several months.

Has anyone else noticed the EIC calculator in FreeTaxUSA seems buggy this year? When I first entered my info it said I didn't qualify, then I went back and reviewed without changing anything and suddenly it said I did qualify. Ended up having to clear my browser cache and start over to get consistent results.

I had a similar experience with FreeTaxUSA and the EIC threshold confusion! The key thing that helped me understand was realizing that the income limits vary drastically based on whether you have qualifying children. Since you're single with no kids, your EIC income threshold is actually around $17,640 for 2024 taxes - way below your $43,750 income. The $59,899 figure you saw is probably for taxpayers with multiple qualifying children. It's frustrating because tax software doesn't always make these distinctions clear upfront. You might want to look into other credits you could qualify for instead - like the Retirement Savings Contributions Credit if you contributed to an IRA or 401k, or education credits if you had any qualifying education expenses. Sometimes there are credits available that we don't even know to look for!