Thanks everyone for all the detailed responses! This has been incredibly helpful. I had no idea about the distinction between "care" vs "education" costs or that our pre-k program might qualify for the Child and Dependent Care Credit. I'm going to contact our school's finance office tomorrow to ask them to break down our monthly $1,250 payment into care vs educational components. Since both my wife and I work full-time and our daughter is there from 8am-3pm, it sounds like a good portion should qualify as dependent care. I'm also going to look into whether my employer offers a Dependent Care FSA for next year - that could be a huge tax saver if we can set aside $5,000 pre-tax. For this year's taxes, I'll definitely explore using one of those AI tax tools mentioned to make sure I'm not missing anything. Really appreciate everyone sharing their experiences!

Great advice from everyone here! One additional thing to consider is timing - if you're planning to claim the Child and Dependent Care Credit, make sure you have all your documentation ready early in tax season. The IRS has been requesting more supporting documents for childcare credits lately. Also, don't forget that if your child turns 13 during the tax year, they only qualify for the dependent care credit for the months they were under 13. Since your daughter just turned 4, you're good for several more years, but it's something to keep in mind for future planning. Another tip: if your pre-k program offers summer care or extended year programs, those expenses can also qualify for the credit as long as they meet the same "care while you work" requirements. We used our school's summer program last year and were able to include those costs too.

I'm an accountant and see this issue constantly. Here's what's happening: 1) The $650 was probably her final paycheck from 2017 work, but it was issued in 2018, making it 2018 income for tax purposes. 2) The specific date they're claiming she worked in January is likely just their payroll system requiring an "event date" to process a payment, and someone just picked that date. 3) The 1095-C for two months is standard - companies typically extend COBRA eligibility for a period after termination. My advice: Just report the W2 as is on your 2018 taxes. The amount is small enough that trying to get a corrected W2 will be more hassle than it's worth. If you're really concerned about the January date showing work she didn't do, request your wife's complete time records from 2017-2018 to see what's actually recorded.

I had a very similar situation a few years back! My wife worked at a hotel through December 2016, but they held her final check until January 2017 for "processing." We were confused when we got the W2 showing 2017 income for work she did in 2016. After talking to a tax preparer, we learned this is actually normal and legal. The IRS follows the "cash basis" rule - income is taxed in the year you actually receive it, not when you earn it. So even though your wife worked those shifts in November 2017, if the payment came in 2018, it's 2018 income. The suspicious part is that January 4th date they're claiming she worked. I'd definitely ask for her detailed timecard records from that period. If someone was clocking in under her employee number after she left, that's wage theft and needs to be reported. But if it's just how they coded her final payment in their system, then you're probably fine reporting it as is. For $650, fighting with corporate HR might not be worth the headache, but getting those records would give you peace of mind about whether anything shady happened.

Great advice from everyone here! I want to add something important that hasn't been fully addressed - the "support test" calculation can be trickier than it seems at first glance. When determining if your fiancé provides more than 50% of your daughter's support, you need to include ALL sources of support, not just what you and your fiancé provide. This includes things like: - Any child support from your daughter's biological father - Government benefits (SNAP, WIC, Medicaid, etc.) - Support from grandparents or other relatives - Even the fair rental value if your daughter has her own room The IRS has a specific worksheet (Publication 501) that breaks down exactly how to calculate total support. I've seen people get tripped up because they only counted the money they and their partner spent, forgetting about other sources of support that might push the total over the threshold. Also, keep detailed records throughout the year - receipts, bank statements, etc. The IRS can ask for documentation if they audit dependent claims, and "he pays for most things" won't be enough if you can't prove the actual dollar amounts.

This is a really complex situation that I've seen trip up a lot of couples! One thing I want to emphasize that others have touched on but is super important - make sure you're both on the same page about who's claiming your daughter BEFORE either of you files. The IRS has gotten much better at catching duplicate dependent claims automatically, and if both of you claim her, both returns will be rejected or flagged for manual review. This can delay your refunds by months and potentially trigger an audit where you'd both have to provide documentation proving your support calculations. Given what you've described - that your fiancé pays for housing, food, and most of your daughter's expenses - it sounds like he might qualify under the qualifying relative test. But as others have mentioned, you'll need to calculate the exact support percentages including ALL sources (any child support, government benefits, etc.). My recommendation would be to run the numbers both ways: calculate your combined tax benefit if you claim her versus if he claims her. Sometimes the person providing more support isn't necessarily the one who gets the bigger tax advantage, especially when you factor in filing status changes. If the difference is significant, it might be worth having him claim her and you signing Form 8332. Just make sure you have all your documentation ready - the IRS loves to audit dependent situations involving unmarried couples!

Has anybody had success getting the funding fee refund applied as a direct reduction to their loan balance instead of sent as a check? We just found out I should've been exempt (70% disability), but I'd rather have my loan reduced than get cash.

Just wanted to add another perspective on this - I'm a tax preparer who specializes in military and veteran clients, and I see this situation pretty frequently. Everything that's been said about the refund not being taxable is absolutely correct. One thing I always tell my clients in this situation is to keep really good documentation. Save your VA award letter showing the disability rating effective date, the refund letter from the VA, and your original closing documents. While the refund isn't taxable now, having this documentation will be important when you eventually sell the home since it affects your basis calculation. Also, if you do decide to make a principal payment with the refund money (which is a smart move), make sure to keep records of that payment too. It can help establish a cleaner paper trail if the IRS ever has questions about the timeline of events. The good news is this is a well-established situation in tax law, so there's no gray area or uncertainty about how to handle it!

Has anyone tried both TurboTax and H&R Block online to compare the results? Sometimes I get different amounts from different software.

I'd definitely recommend trying both the taxr.ai suggestion from @Connor Murphy and comparing results across multiple tax software platforms before you finalize anything. A swing from getting $2,800 back to owing federal taxes is a huge red flag that something's not right with your current filing. Also, make sure you're entering ALL your tax documents correctly - sometimes people forget about interest statements from banks, unemployment compensation from earlier in the year, or even small 1099s from freelance work. Even a small missed document can throw off your entire calculation. Before paying any service fees, try the IRS Free File program (https://www.irs.gov/filing/free-file-do-your-federal-taxes-for-free) which gives you access to brand-name software for free if you qualify. At minimum, it'll give you another data point to compare against your current results.