One more thing to consider - the IRS has gotten a lot better at recognizing Backdoor Roth conversions in recent years since they've become so popular. Their systems are more sophisticated than they used to be. I think 5 years ago this might have been more likely to trigger an issue, but now their computers are probably programmed to cross-check these scenarios specifically. Still good to be cautious and keep your documentation though!

I'm going through the exact same thing right now! Just got my 1099-R from Fidelity yesterday and saw the dreaded code 1 instead of 2. Reading through all these responses has been incredibly helpful and reassuring. I think I'm going to follow the advice here and just make absolutely sure my Form 8606 is completed correctly rather than trying to fight with Fidelity to change the distribution code. It sounds like multiple people have been through this successfully without any issues from the IRS. @Brianna Schmidt - I don't think there were any major changes to the Backdoor Roth process in recent tax legislation, but I'd double-check with a tax professional if you're concerned. The Form 8606 requirements should be the same as previous years. Thanks everyone for sharing your experiences - this community is so helpful for navigating these confusing tax situations!

2 Have your partner look into filing as HoH if they're claiming your child. That would give them a better tax break than filing as single. Also check if either of you qualify for Earned Income Credit depending on your income - that could make a big difference!

You're absolutely correct that you cannot file as Head of Household in this situation. Since your boyfriend claims your son as a dependent, you don't have a qualifying person to meet the HoH requirements, even though you may be paying a significant portion of household expenses. Your boyfriend, however, likely qualifies for HoH filing status since he claims your child as a dependent and presumably pays more than half the cost of maintaining the household (this would need to include his portion of mortgage, utilities, plus the health insurance and other expenses he covers). For next year, you might want to consider whether it makes financial sense to alternate who claims your son, but you'd need to run the numbers carefully. The person claiming the child must be providing more than half of the child's support, so you'd need to track all expenses related to your son specifically (not just household expenses) to see if this arrangement would work and benefit your family overall. Also worth noting - make sure your boyfriend is indeed filing as HoH if he qualifies, as it provides better tax rates and a higher standard deduction compared to Single filing status.

Don't forget to look at your state tax situation too! Even if you don't need to file federal, some states have lower thresholds. I was in your same situation in GA and still had to file a state return.

Since you're in South Carolina, you're actually in luck! SC has a pretty straightforward tax situation for students. You mentioned that SC state tax is listed on your paystubs but no amounts are being deducted - that's likely because SC has a standard deduction of $12,000 for single filers in 2025, so with your $11,500 income, you probably won't owe any SC state taxes. However, I'd still recommend filing both federal and state returns. For federal, you'll get back that $1,250 in withholding since you're under the filing threshold. For SC, even though you might not owe anything, filing ensures you get any state withholding back (if any was taken) and creates a record. One thing to watch out for - make sure your parents aren't planning to claim education credits based on your tuition expenses. If they are and their income is within the phase-out limits, that could affect whether it makes sense for you to remain a dependent. The coordination between your tax situation and theirs is worth discussing as a family to make sure everyone gets the maximum benefit.

Just a practical tip - make sure you document EVERYTHING about this arrangement. Have a formal written contract that clearly states it's a rental agreement for space only. Keep records of how each groomer operates independently. I've been through this with my own salon. Things that helped establish proper classification during a state audit: - Separate business cards for each groomer - Photographic evidence showing each groomer with their own tools/supplies - Documentation that groomers set their own hours (like separate appointment books) - Proof that clients pay groomers directly, not the salon

You're absolutely right that this is a legitimate business arrangement! I've been operating under a similar booth rental setup for my grooming business for over 3 years now, and it's completely legal when done properly. The key factors you mentioned - setting your own schedule, handling your own client payments, providing your own supplies, and carrying your own insurance - are exactly what the IRS looks for to establish true independent contractor status. The fact that you file Schedule C is also correct. One thing I'd add is to make sure your rental agreement explicitly states that you're renting space only, not providing services to the salon. This helps maintain the clear distinction between a landlord-tenant relationship versus an employer-employee relationship. Don't let the naysayers get to you - booth/table rental is an established and legitimate business model that's been used successfully across the grooming and beauty industries for decades. As long as you maintain proper documentation and operate with genuine independence (which it sounds like you do), you're on solid ground. Good luck with your move to the new location!

The 1040 instructions for line 4a state "generally, you should enter the total amount of distributions from all your IRAs" so I think FreeTaxUSA might actually be right to add both? The exception cases in the instructions are super confusing tho.

I went through this exact scenario last year and can confirm TurboTax is handling it correctly. Only the conversion amount ($4,074) should go on line 4a, not the recharacterization amount. Here's what helped me understand it: think of a recharacterization as "undoing" the original contribution type. When you recharacterized from Roth to Traditional, it's as if you had originally contributed to the Traditional IRA. Then when you converted back to Roth, that's the only transaction that gets reported on line 4a. The statement TurboTax creates is crucial - it explains to the IRS why you have multiple 1099-R forms but only one amount on line 4a. Without it, your return would look like you're underreporting distributions. I was also worried about e-filing with the statement, but TurboTax handled it seamlessly. The IRS processed my return normally and I got my refund on schedule. Don't stress about it - you're doing it right!