Has anyone used TurboTax for this situation? Do they ask the right questions to figure out if you qualify for HOH even if your kid isnt a dependent?

I'm so sorry for your loss, Kaitlyn. Going through tax complications while dealing with grief is really tough. Based on what you've described, it sounds like Head of Household would be your best option and could save you quite a bit compared to filing as Single. The key thing to understand is that your daughter can still be your "qualifying person" for HOH purposes even though she's not your dependent due to her income. As long as she's your child, lived with you for more than half the year, and you paid more than half the household costs (which it sounds like you did), you should qualify for HOH status. Just make sure to keep good records of your household expenses in case you need to prove you covered more than 50% of the costs. The HOH filing status typically provides better tax rates and a higher standard deduction than filing as Single, so it's definitely worth pursuing if you qualify. You might also want to look into education credits for your daughter's college expenses - even though you can't claim her as a dependent, you might still be eligible for the American Opportunity Tax Credit if you paid her tuition and she meets the other requirements.

Has anyone used TurboTax to report a home sale? I'm trying to figure out if their interview process walks you through all this stuff about selling expenses and basis adjustments automatically.

One thing I haven't seen mentioned yet is the importance of keeping detailed records even if you don't think you'll need them. I sold my primary residence two years ago and was well under the exclusion limit, so I almost didn't bother tracking my selling expenses. But then I ended up buying another house and selling it within a year due to a job relocation - suddenly I was in a situation where those expenses from the first sale became relevant for calculating my overall tax situation across multiple transactions. Also, if you're close to retirement age or think you might be selling again soon, those selling expense records could become valuable later. The IRS generally requires you to keep tax records for 3-7 years, but for real estate transactions, I'd recommend keeping everything permanently. You never know when you might need to reference your basis calculations for future property decisions or if the IRS comes asking questions years down the line. Even though it seems like extra work when you're under the exclusion, maintaining good records is just good practice and costs you nothing but a little organization time.

I had a very similar situation last year with municipal bonds purchased in December 2023. What really helped me was creating a simple spreadsheet to track all my bond purchases with accrued interest, including the purchase date, accrued interest paid, and expected first payment date. The key thing I learned is that the IRS views accrued interest as a "return of capital" rather than a deduction. You're essentially getting back money you paid to the previous bondholder for interest they earned but hadn't collected yet. This is why it must be reported in the same year you receive the actual interest payment - because that's when you're reporting the income that needs to be adjusted. For your March 2025 payment, you'll report $750 as interest income and then subtract the $125 accrued interest as a negative adjustment on Schedule B. Make sure to keep your purchase confirmation showing the accrued interest amount - the IRS may ask for documentation if they have questions about the adjustment.

I've been dealing with a similar situation with TIPS (Treasury Inflation-Protected Securities) that I bought in late 2024. The accrued interest timing issue becomes even more complex with TIPS because of the inflation adjustments, but the basic principle is the same. One thing I learned from my tax preparer is to keep detailed records not just of the accrued interest amount, but also the exact settlement date and the interest payment schedule. This helps if you ever need to explain the timing to the IRS. She also mentioned that if you have multiple bonds with different accrued interest amounts, you should list each one separately on Schedule B rather than lumping them together - it makes the return clearer and less likely to trigger questions. For anyone using tax software, I found that H&R Block's premium version handles this better than TurboTax. It has a specific section for bond accrued interest adjustments that walks you through the process step by step. But honestly, after reading all these responses, it sounds like manually tracking everything in a spreadsheet and then entering the adjustments yourself is the most reliable approach regardless of which software you use.

Great to see you got it resolved! For anyone else still struggling with IND-032-04 errors, here's a quick checklist based on what worked in this thread: 1. Check your account transcript (not just return transcript) for any IRS adjustments made after filing 2. Use whole dollar amounts only (no cents) when entering AGI 3. Verify you're using line 11 from Form 1040 for AGI 4. Double-check name formatting matches exactly how it appeared on last year's return 5. Try the $0 workaround for spouse AGI if other methods fail The account transcript tip seems to be the most overlooked solution - adjustments made months after filing can change your AGI in the IRS system without updating your original documents. Always worth checking before trying more complex troubleshooting methods.

This is such a helpful thread! I'm dealing with a similar situation right now and was about to give up on e-filing. The account transcript tip is brilliant - I had no idea there was a difference between return transcript and account transcript. I just checked my account transcript and sure enough, there was a small adjustment made in September that I completely forgot about. It changed our AGI by $89. Going to try using that adjusted number now instead of what's on my original return. It's really frustrating that the IRS doesn't send any notification when they make these post-filing adjustments that affect future e-filing. You'd think they'd at least send a letter or update your online account with a notice that your AGI for verification purposes has changed. Will report back if this fixes my IND-032-04 error!

Is anyone using tax software for this? I tried entering my recharacterization in TurboTax and it doesn't seem to have a clear place to enter this information. It keeps calculating tax on the full conversion amount rather than just the earnings.

I actually went through this exact same situation two years ago and want to emphasize something that might save you headaches later. When you do your backdoor Roth conversion after the recharacterization, make sure your Traditional IRA account is completely empty before the end of the tax year if possible. The reason is the pro-rata rule - if you have any other Traditional IRA money (like old 401k rollovers), it complicates the tax calculation for your backdoor conversion. The IRS looks at all your Traditional IRA balances combined when determining how much of your conversion is taxable. Also, keep really good records of all these transactions with dates and amounts. I had to provide documentation to my tax preparer showing the timeline: original Roth contribution → recharacterization to Traditional → conversion back to Roth. Having clear records made the whole process much smoother and gave me confidence that everything was reported correctly.