Just to add another point - remember that for EITC, your daughter needs to have lived with you for more than half the year. Time away at college counts as temporary absence so that's fine in your case. But also double-check if your income falls within the EITC limits since they change every year.

One thing to keep in mind is that even though your daughter can file her own return for her bookstore income, she likely won't owe any federal taxes since she only made $2,800 (well below the standard deduction). However, she should still file if taxes were withheld from her paychecks - she'll probably get a full refund of any federal taxes that were taken out. Also, since you mentioned you're a single mom, make sure you're filing as Head of Household rather than Single - this gives you a higher standard deduction and potentially more favorable tax brackets. You qualify for Head of Household status since you're unmarried and have a qualifying dependent living with you for more than half the year.

Don't forget to make copies of EVERYTHING before you mail it! I learned this the hard way when the IRS claimed they never received my 2019 return. No proof = had to redo everything + paid penalties.

Just a heads up for anyone considering these different options - I recently had to mail past returns for 2019-2021 and ended up using a combination approach that worked really well. First, I weighed each complete return package at the post office (they'll do this for free) to get exact postage amounts. My 10-page returns with supporting docs were actually closer to 3 ounces each, so needed 3 stamps per envelope rather than the 2 mentioned earlier. For the mailing method, I went with certified mail with return receipt for the peace of mind, but here's a tip: you can do this online through USPS.com and print the labels at home. It's slightly cheaper than doing it at the counter and you avoid the lines. Most importantly, I called the IRS practitioner priority line first (different number than the regular taxpayer line) to confirm which processing center to use for each year. Turns out the addresses had changed for my state between some of those years. The wait was still long but not as bad as the regular line. Total cost was about $12 per return (postage + certified mail + return receipt) but having tracking numbers and delivery confirmation was absolutely worth it. All three returns were processed without issues and I got confirmation within 6 weeks.

This is really helpful information! I'm in a similar situation but with a twist - we made our 2023 Roth contributions through automatic monthly transfers. Does anyone know if the earnings calculation gets more complicated when contributions were made throughout the year versus all at once? I'm worried Schwab might have trouble tracking the exact gains attributable to each monthly contribution. Also, I'm curious about timing - if I start the recharacterization process now, how long does it typically take to complete? I want to make sure I have enough time to also handle the traditional IRA to 401k rollover that AaliyahAli mentioned if we decide to go that route for a clean backdoor Roth next year.

I went through this exact situation with Fidelity last year and wanted to share some additional insights that might help. One thing I learned is that when you call to request the recharacterization, make sure to specify that you want to recharacterize the "maximum allowable amount" - this ensures they include all contributions plus the net income attributable to those contributions. Also, don't forget about state tax implications if you live in a state with income tax. Some states don't conform to federal recharacterization rules, so you might need to make adjustments on your state return even if everything is handled properly at the federal level. The process was actually smoother than I expected once I got through to a retirement specialist. They walked me through everything and even helped me understand how the recharacterization would affect my ability to make future Roth contributions. Since you're over the MAGI limits, you'll want to plan for backdoor Roth contributions going forward if your income stays high. One last tip - keep detailed records of the recharacterization including the calculation methodology Schwab uses. This documentation will be helpful if you ever get questions from the IRS, and it'll make next year's tax prep much easier if you decide to do backdoor Roth conversions.

I've been doing crypto tax loss harvesting for the past two years and can confirm it works as described. The key thing people miss is that you need to be strategic about timing. I typically do a review in November to identify positions that are down, then execute the sales and repurchases in December. One important detail - make sure you're using the same exchange or wallet for the repurchase if possible. It makes record-keeping much cleaner. Also, consider the transaction fees when calculating whether the tax benefit is worth it. On smaller losses, the fees might eat into your savings. I use a simple spreadsheet to track: original purchase date/price, sale date/price, loss amount, repurchase date/price, and new cost basis. This documentation has been sufficient for my tax preparer and gives me confidence if I ever get audited.

This is a really thorough discussion! I wanted to add a perspective from someone who's been through multiple tax seasons with crypto. The wash sale loophole is indeed real and I've used it successfully, but there are a few practical considerations worth mentioning. First, timing matters more than people realize. While you CAN sell and rebuy immediately, I've found it's often better to wait at least a few minutes or even hours between transactions. This helps avoid any potential issues with price slippage or market volatility affecting your ability to rebuy at a similar price. Second, consider the psychological aspect - it's easy to get caught up in "gaming the system" and make poor investment decisions just for tax benefits. Make sure your investment strategy comes first, and tax optimization comes second. Finally, keep in mind that this strategy works best when you have other capital gains to offset. If you don't have gains, you can only deduct $3,000 per year against ordinary income, and excess losses carry forward. So don't rush into this if you're not getting immediate tax benefits.

This is such a timely question! I went through the exact same confusion when I started trading more actively last year. The wash sale rules are definitely one of those tax concepts that seem simple on the surface but get complicated quickly in practice. One thing that helped me understand it better was thinking about the IRS's intent behind the rule - they don't want people to claim tax losses while immediately getting back into the same economic position. That's why the loss isn't permanently gone, just deferred until you actually exit the position for good. A few additional points that might help: - The 30-day window goes both ways (before AND after the sale), so it's actually a 61-day window total where you need to be careful - Your broker's 1099-B will show wash sales they're aware of, but they might miss some if you trade across multiple brokers or account types - If you're doing tax-loss harvesting near year-end, be extra careful about January purchases triggering wash sales on December sales The cost basis adjustment you mentioned is correct - that $200 loss gets added to your new shares' basis, so you'll eventually get the tax benefit when you sell those replacement shares (assuming you don't trigger another wash sale). Have you considered consulting with a tax professional who specializes in trading? It might be worth the cost given how complex this can get with active trading.

Just wanted to add another perspective on the "substantially identical" question that's been bugging me too. I learned from my tax advisor that the IRS hasn't provided a comprehensive list of what counts as substantially identical, which makes this so confusing for us regular traders. For ETFs, it's not just about tracking the same index - even funds that track different but highly correlated indexes could potentially be considered substantially identical. For example, an S&P 500 ETF and a large-cap growth ETF might have enough overlap that the IRS could argue they're substantially identical if you're not careful. One strategy I've started using is the "different asset class" approach when I need to tax-loss harvest. Instead of trying to find a "similar but not identical" replacement, I'll temporarily move to a completely different sector or even bonds for the 31-day period. It's not perfect for maintaining exposure, but it completely eliminates the wash sale risk. Also, be super careful with dividend reinvestment plans (DRIPs). If you sell a stock at a loss but have DRIP enabled and it automatically reinvests dividends within the wash sale window, that could trigger the rule too. I had to disable DRIP on several positions to avoid this issue. The whole system really seems designed to trip up active traders who don't have professional tax help!