Has anyone dealt with state taxes in this situation? I've heard some states have different rules than the IRS about spousal liability, even when filing separately.

I'm so sorry for your loss and the stress you're dealing with during this difficult time. Based on your situation, you should have very limited liability for your husband's tax debts since you consistently filed separately and maintained separate finances throughout your marriage. The key protections working in your favor are: 1) You always filed "married filing separately" which generally protects you from the other spouse's tax obligations, 2) You kept separate finances after that joint account incident, 3) You owned no joint property or assets, and 4) You were estranged and living in different states. Since your husband passed away, his estate would be responsible for any tax debts, not you personally. If the estate has no assets to pay the debts, they typically can't be collected. However, I'd strongly recommend getting a consultation with a tax attorney who specializes in these situations - many offer free initial consultations for situations like yours. Also consider contacting the IRS Taxpayer Advocate Service (it's free) to explain your situation proactively. They can help ensure your records clearly show your separate filing status and financial separation. Having documentation ready (your separate tax returns, bank statements showing separate accounts, rental agreements in your name only) will be helpful if any questions arise. You've been through enough - don't let fear of his tax problems add to your burden when you're likely protected.

As someone who just went through this exact confusion with my first year of Vanguard ETF investing, I wanted to share what finally helped it click for me. The key insight that made everything clear was understanding that ETFs are basically baskets of individual stocks, and each of those underlying companies has different dividend policies. When Apple pays a qualified dividend to the ETF, and the ETF has held Apple stock long enough, that portion gets passed through to you as qualified. But if the ETF holds some REITs or other securities that don't qualify, those get passed through as non-qualified. What really helped me was looking up the actual holdings of my ETFs on Vanguard's website. For VOO, you can see it holds companies like Microsoft, Apple, and Amazon - most of which pay qualified dividends. But there might be some smaller holdings or newer additions that haven't met the holding period requirements yet. For your 2025 filing, just wait for the 1099-DIV form from Vanguard - it'll have everything broken down clearly in the right boxes. Box 1a shows total dividends, Box 1b shows qualified dividends, and the difference is your non-qualified amount. Don't stress too much about the exact percentages - even if some portion is non-qualified, you're still getting good dividend income from solid funds! The most important thing is that you started investing consistently. The tax complexity gets easier to understand with experience, and Vanguard's customer service is really helpful if you have specific questions about your statements.

As a newcomer who just started dealing with ETF dividends this year, this thread has been incredibly valuable! I had the same confusion with my VOO and VTI holdings - seeing those different dividend categories on my statements was really puzzling at first. What helped me the most was realizing that this is completely normal and not something I did wrong. I was initially worried that I had made some mistake in my investment selections or that there was some action I needed to take to "fix" the non-qualified portion. One thing I learned from my accountant is that for most people in lower tax brackets, the difference between qualified and non-qualified dividend treatment isn't as dramatic as it might seem. Yes, qualified dividends get better tax treatment, but even non-qualified dividends from solid ETFs like VOO are still good investment income. I also found Vanguard's online chat support really helpful when I had questions about reading my statements. They explained that the quarterly variations in qualified percentages are totally normal and happen for all the technical reasons everyone mentioned here. For other newcomers reading this - don't let the complexity discourage you from investing in these great broad-market ETFs. The tax stuff seems overwhelming at first, but it becomes much clearer once you actually go through a tax season with the proper forms. Focus on building good investing habits first, and the tax knowledge will follow naturally!

Has anyone actually gotten the penalty waived? My Q2 payment was late because of a family emergency, and I'm wondering if there's any point in trying to explain that to the IRS.

I've been dealing with estimated tax payments for years and the formula can definitely be confusing. Based on your payment schedule, you'll likely face a penalty for the Q2 late payment, but it might not be as bad as you think. The IRS uses Form 2210 to calculate penalties, and the key thing to understand is that they look at each quarter independently. Your March payment was early (which is good), but your June payment being 10 days late will trigger a penalty for those specific days. Here's what typically happens: They'll calculate your required quarterly payment (usually 25% of your total annual requirement), then charge daily interest on any shortfall from the due date until paid. With the current 8% annual rate, that's roughly 0.022% per day. One thing that might help you - if your income is uneven throughout the year, you can use the annualized income installment method on Form 2210 Schedule AI. This lets you calculate required payments based on when you actually earned income rather than assuming equal quarters. Given your varying payment amounts, this might reduce your penalty if your income was lower in Q2. The good news is estimated tax penalties are usually much smaller than people expect - often just a few hundred dollars even for significant timing issues.

Another option nobody mentioned - you could also file Form 1116 Schedule B as a PDF attachment to your return. This works if your tax software won't allow you to complete just Schedule B without the main form. Just download the PDF form from the IRS website, fill it out manually, and then attach it to your e-filed return as a PDF supplement. Most tax software allows you to include supplemental forms this way. This might be cleaner than entering artificial foreign income data just to trigger the form. The key is making sure you have documentation of your carryover amounts for future use!

I went through this exact situation two years ago and can confirm that filing Form 1116 Schedule B is absolutely necessary to preserve your FTC carryovers, even when you have no foreign income for the current year. What really helped me was creating a simple spreadsheet to track all my carryovers by year and their expiration dates. Since FTC carryovers expire after 10 years, it's crucial to maintain clear records of when each carryover originated so you know when they'll expire. For the tax software issue that several people mentioned - I found that most software programs have a "forms mode" or "manual entry" option that lets you add forms without going through the interview process. In TurboTax, you can search for "Form 1116" and add it directly, then just complete Schedule B without filling out the main form sections. One important note: make sure your Schedule B carryover amounts match what you reported in previous years. The IRS computers will flag any discrepancies, so consistency in your carryover tracking is key. I learned this the hard way when I had to amend a return because my carryover amounts didn't match my previous year's filing.

If your grandparents have online access to their Treasury Direct account, they can log in and download all their tax forms including complete 1099-INTs with the EIN. Might be worth walking them through it over the phone so they can access these themselves in the future.

I totally feel your pain with helping elderly family members with taxes! Just wanted to add that if you're still stuck, you can also call the IRS directly at 1-800-829-1040 and they can help verify the correct EIN for Treasury Direct over the phone. I had to do this last year for my grandfather's bonds and the representative was actually really helpful - they confirmed the 43-1965496 EIN that others mentioned and even helped me understand which parts of the interest were taxable vs. exempt. The wait times can be long (especially during tax season) but it's free and they have access to all the official records. Might be worth trying if the other suggestions don't work out!