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Just wondering - does anyone know what happens if both parents accidentally claim the same kid? My ex and I had this miscommunication last year where we both claimed our son (we have 2 kids) and now I'm worried.
This happened to my brother last year! The IRS will usually accept the first return filed, then send a notice to the second person who claimed the same dependent. You'll get a letter asking you to either amend your return or provide documentation proving you had the right to claim the child. If neither parent backs down, the IRS has tiebreaker rules they'll apply (usually based on where the child lived for more of the year).
Thanks for the info! That's helpful to know since we haven't received any notices yet. I'm guessing we should be proactive and figure out who should file an amended return rather than waiting for the IRS to contact us?
The IRS has specific tiebreaker rules for situations like this. If both parents claim the same child, the IRS will generally award the dependency exemption to the parent with whom the child lived for the greater number of nights during the year. If it's exactly equal (unlikely but possible), then it goes to the parent with the higher adjusted gross income. However, since your son and his ex have two children and want to each claim one, this can work perfectly fine as long as each child qualifies as a dependent for the parent claiming them. The key requirements are that each child must have lived with their respective claiming parent for more than half the year (or at least more nights than with the other parent). One important tip: even though they're on good terms now, I'd strongly recommend they put their agreement in writing and keep detailed records of custody schedules. This protects both of them if their relationship changes or if the IRS ever questions the arrangement. They should also make sure they're consistent year after year - if your son claims the 6-year-old this year, he should continue claiming that same child in future years to avoid confusion.
This is really helpful guidance! I'm new to this community and currently going through a similar situation with my ex-husband. We have three kids and are trying to figure out the best way to handle tax claims. Your point about keeping detailed records of custody schedules is something I hadn't considered but makes total sense. Quick question - if the custody arrangement changes during the year (like if one parent moves and the schedule shifts), do we need to recalculate who lived with whom for more nights? Or is there a specific cutoff date the IRS uses? I want to make sure we're doing this correctly from the start.
22 One thing nobody mentioned - if you're getting married in April, consider if you want to change your name before or after filing this year's taxes (assuming you're changing names). It can be a nightmare to file if your social security card, W2, and ID all have different names. My wife and I got married last June and she waited until after tax season to officially change her name. Made things much easier!
11 That's really smart! Did your wife have any issues with the timing of the name change with other stuff? Like health insurance or bank accounts? I'm trying to figure out the least painful way to handle all the name change logistics.
22 No issues at all! She continued using her maiden name legally until after we filed taxes in February. Then she changed her social security card first, followed by her driver's license, and finally started updating banks, credit cards, etc. The key is doing social security first, then everything else. For health insurance through our employers, she just informed HR that she'd be changing her name after tax season so they could make a note in the system. It was actually their suggestion to wait until after filing to avoid confusion.
4 Watch out for the marriage tax penalty! My wife and I both make around $80k and we ended up owing an extra $2,100 when we filed jointly after our October wedding. We had to adjust our withholdings big time for the next year. If you both make similar salaries in that $70-100k range, you might want to have extra withheld just to be safe.
16 Is it really that bad? My fiancΓ© and I are in a similar income bracket (both around $75k) and getting married this summer. Should we maybe just file separately to avoid this penalty?
Filing separately rarely helps with the marriage penalty situation. The tax brackets for married filing separately are actually worse than single filer brackets in most cases. You'll likely still pay more total tax than when you were both single, just split between two returns instead of one. The real solution is proper withholding adjustment. Use the IRS withholding calculator or one of the tools mentioned above to figure out exactly how much extra to withhold. At $75k each, you're right in that zone where the penalty hits, but it's usually only a few hundred to maybe $1,500 extra per year - not the end of the world if you plan for it. The key is updating both your W4s after marriage and potentially having some additional amount withheld from each paycheck to cover the difference. Much better than getting surprised at tax time!
This happened to me and it turned out to be my student loan payment! The servicer had changed and it was listed as "DEPT ED/TAX" on my statement which I totally misread as a tax charge. Check if you have any student loans in repayment - the labels can be super confusing.
Yes! This happened to me too. My federal student loan payment showed up as "DEPT TREASURY" something on my bank statement and I panicked thinking it was the IRS. The banks use the weirdest abbreviations for these things.
Isabella, I feel for you - this exact situation happened to me two years ago and I was terrified! In my case, it turned out to be an offset for unpaid back taxes from 2019 that I had completely forgotten about. The IRS had applied my expected refund to that old debt and then withdrawn the difference from my account. What saved me was logging into my IRS online account immediately - you can create one at irs.gov with your Social Security number and some identity verification. Once you're in, look at your "Account Transcript" which will show ALL recent activity including any offsets, adjustments, or automatic withdrawals. The transcript will also show if there are any notices that were supposed to be mailed to you. Sometimes these get lost or sent to old addresses. If you see notices listed there that you never received, you can actually view and download them directly from your online account. Don't panic about the rent money just yet - if this was an IRS error, they do reverse transactions, though it can take a few weeks. But getting into that online account should give you answers within minutes rather than waiting hours on the phone. Good luck!
This is really helpful advice! I'm dealing with a similar mystery charge and hadn't thought about checking for old tax debts. Quick question - when you say "offset for unpaid back taxes," does that mean the IRS can just take money from your bank account even if you're expecting a refund? I thought they would at least send multiple notices before doing something like that. Also, how far back can they go to collect on old tax debts?
Pro tip: Check your wage and income transcript. If theres any mismatch between what you reported vs what employers reported, thats usually why theyre reviewing. Even a few dollars off can trigger it.
try taxr.ai - it breaks everything down way better than the irs site. saved me hours of headache
Going through the same thing right now - filed 3 weeks ago and still waiting on income verification. The uncertainty is killing me! I've been obsessively checking my transcript daily but honestly can't make heads or tails of all the codes and dates. Really hope it resolves soon because like you said, bills don't wait for the IRS π
Write Angles
Hi, Aisha, did you ever get this resolved? I have the same situation, and saw Stripe has this on their website saying the do not support disregarded entities, which is what my (and your) company is. https://support.stripe.com/express/questions/how-do-i-enter-my-disregarded-entity-that-needs-to-sign-the-w-8-or-w-9 I'm just wondering if you found a way around it.
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Kai Rivera
@Write Angles I ran into the exact same issue with Stripe's policy on disregarded entities! After all the helpful advice here, I contacted Stripe support multiple times with the IRS documentation about W-8BEN-E being the correct form for foreign-owned single-member LLCs. What finally worked was escalating to their merchant services team (not just regular support) and providing them with official IRS guidance that clearly states disregarded entities owned by foreign persons should use W-8BEN-E. I also included the tax treaty information for my country of residence. It took about 3 weeks of back-and-forth, but they eventually created an exception for my account. The key was being persistent and providing official documentation rather than just explaining the situation. If you're still stuck, I'd recommend trying the Claimyr service that others mentioned to get official IRS confirmation in writing - that seemed to carry more weight with Stripe's compliance team.
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