Quick question about this EITC situation - does anyone know if TurboTax handles this correctly? Like if I input that I have 50/50 custody and want to claim EITC for a kid that my ex is claiming as a dependent, will it let me do that or will it give me an error?

I just went through this exact situation last year! Your tax preparer is absolutely right - EITC and dependency claims operate under different rules. I had 50/50 custody with my ex, and I was able to claim EITC for both kids even though we alternated who claimed them as dependents each year. The key thing to remember is that EITC is based on the "qualifying child" test, which looks at things like where the child lived for more than half the year. With true 50/50 custody, either parent could potentially claim EITC if they meet the income requirements. Since your ex makes too much to qualify for EITC anyway, there's no conflict. Your ex's return won't be rejected - the IRS systems don't automatically cross-reference EITC claims with dependency claims in the way you might think. Just make sure you have documentation of your custody arrangement and that all the child's information (SSN, name spelling, etc.) is consistent on both returns. One tip: I found it helpful to give my ex a heads up about the arrangement just to avoid any confusion or concern on their end when they saw different credits being claimed. Good communication goes a long way in co-parenting situations, especially around tax time!

Quick question - if OP changes their W-4 now to withhold a bunch of extra money from their last few 2025 paychecks, will that actually help with the underpayment penalty? I thought the penalty was calculated by quarter, so fixing it in December wouldn't help with the earlier quarters when nothing was withheld?

I actually just went through this exact same situation earlier this year! Made the same mistake with the exemption box and didn't notice for months. Here's what I learned: First, don't panic - this is more fixable than you think. The key thing to understand is that withholding from your paycheck gets treated as if it was paid evenly throughout the year, even if you do it all in December. This is huge because it can help with penalties retroactively. I'd strongly recommend doing BOTH things mentioned above - submit a new W-4 with maximum additional withholding for your remaining paychecks AND make a Q4 estimated payment if needed. Calculate roughly what you'll owe for the full year, subtract what was already withheld from your first job, then split the remainder between increased withholding and estimated payment. Also look into first-time penalty abatement if you haven't had issues before - it can waive penalties entirely if you qualify. The IRS is actually pretty reasonable about honest mistakes like this, especially if you're proactive about fixing it before filing. One last tip: when you do your W-4 next year, maybe set it to withhold slightly more than needed so you have a buffer. Better to get a small refund than deal with this stress again!

Be careful about state taxes too! Even though you're working abroad, some states might still consider you a resident for tax purposes if you maintain ties there (driver's license, voter registration, bank accounts, etc). If you haven't formally changed your domicile, you might need to report those dividends on a state return too.

Great question! I dealt with something very similar last year with my Schwab account. Even without a 1099-DIV, you absolutely need to report those dividends. In TurboTax, when you get to the investment income section, look for "I'll enter investment income that doesn't appear on any tax forms" or similar wording. You'll enter your $7.85 as dividend income - make sure to check your Fidelity account statements to see if any portion was classified as "qualified dividends" vs "ordinary dividends" since they're taxed differently. Since you're already dealing with international tax complexities with Form 2555, you might want to consider upgrading to TurboTax Premier or consulting with a tax professional who handles expat situations. The Foreign Earned Income Exclusion doesn't apply to investment income, so those dividends will be subject to regular US tax rates regardless of where you're living. One more tip: keep detailed records of your account statements showing the dividend amounts and dates, especially since you don't have an official 1099. The IRS may ask for documentation if they have questions later.

called MI treasury today and they said theyre aware of the issue but no eta on a fix. atleast their being honest ig

This is exactly what happened to me! Filed with H&R Block on Jan 28th and have been waiting forever for my Michigan refund. Finally called the state last week and they told me a paper check was mailed instead of direct deposit. So frustrating that H&R Block didn't even notify customers about this glitch. Thanks for the heads up OP!

This is exactly what happened to me last year! My $2,100 tax debt vanished from my account on a Thursday, and I was panicking thinking there was some kind of error. But then exactly 10 days later, my remaining refund of $890 hit my bank account. The whole process felt like watching a magician - first the debt disappears, then there's this suspenseful waiting period, and finally the refund appears! One thing I learned is that during those waiting days, it's totally normal for the Where's My Refund tool to still show "processing" even though the offset has already been applied behind the scenes. The system updates different parts at different times. I'd recommend checking your account every few days but try not to obsess over it (easier said than done, I know!). Also, keep an eye on your mail for any offset notices - they usually send confirmation that they applied your refund to your previous balance. Good luck, and congratulations on getting that debt cleared!

I went through this exact scenario just two months ago! My $1,650 debt from 2021 disappeared from my account on a Tuesday morning, and like you, I felt like I was solving a puzzle with missing pieces. The "pay in full" button vanishing was actually the moment I knew the offset had been processed - it's like the system saying "we've got this handled now." What really helped me during the waiting period was understanding that the IRS processes these in specific cycles. Mine took exactly 12 days from debt disappearance to refund deposit. During that time, I got a paper notice in the mail (around day 7) confirming the offset amount and showing my remaining refund balance. One tip that saved my sanity: I set up text alerts with my bank so I'd know immediately when the refund hit, rather than checking my account multiple times per day. The whole experience taught me that the American tax system, while complex, does have these predictable patterns once you learn to recognize them. You're definitely on the right track - that disappearing debt is essentially the IRS giving you a green light that your case is moving forward!