Don't forget about the childcare tax credit! Since you pay 65% of the daycare expenses, you should be eligible to claim that credit regardless of who claims the child as a dependent (though it's simpler if the same person does both). Keep all your receipts and documentation showing you paid these expenses. My tax preparer saved me over $2000 last year because I had documentation showing I paid for most of my daughter's daycare even though my ex claimed her as a dependent that year.

I'm dealing with a similar situation and wanted to share what I learned from my tax attorney. The key issue here isn't just who has higher AGI, but also making sure you have proper documentation of your custody arrangement and expense payments. Since you have true 50/50 custody AND you're paying 65% of daycare costs, you're in a strong position to claim the younger child. For the older child, the same AGI tiebreaker rule applies. However, I'd strongly recommend getting this clarified in writing through a court modification to your custody agreement. One thing to consider is that your ex saying they "need the tax break more" isn't relevant under IRS rules - financial need doesn't override the legal guidelines. The IRS goes by custody time and AGI, not who needs the money more. Also, keep detailed records of all your childcare payments, child support payments, and any other expenses you cover. If this ever gets disputed, you'll want clear documentation showing you're following the rules correctly.

Whoever designed these tax programs is evil genius level. They detect you made a retirement contribution, force Form 8880 into your return knowing most people won't qualify for the credit, then charge you for the "premium" form. Absolute scam but totally legal.

Actually, Miguel is incorrect about Form 8880 being required for all retirement contributions. You only need to file Form 8880 if you're actually claiming the Saver's Credit. If your income is above the eligibility thresholds, you don't need this form at all. The real issue is that tax software companies use this as a revenue opportunity. They detect retirement contributions and automatically assume you might qualify for the credit, then charge you for the "premium" version to include the form. But if you know you don't qualify based on your income, you can often work around this by being more specific about how you enter your retirement information. For 2024 taxes, the income limits are $36,500 for single filers and $73,000 for married filing jointly. If you're above these amounts, you can safely skip Form 8880 entirely. The key is finding tax software that doesn't automatically force it or knowing how to navigate around the upsell tactics.

This thread has been incredibly helpful! I'm actually in a very similar situation - we're US citizens considering sending our 4-year-old to stay with grandparents in Japan for about 6 months while attending a local preschool there. Reading through all these responses, it sounds like the consensus is that foreign childcare can qualify for both the Dependent Care FSA and tax credit as long as you document everything properly. The key points I'm taking away are: 1. Write "FOREIGN" instead of an EIN/SSN on tax forms 2. Get translated receipts and official documentation from the provider upfront 3. Use traceable payment methods (no cash) 4. Make sure both parents are working during the childcare period 5. Keep exchange rate documentation if using FSA One question I haven't seen addressed though - does it matter what type of visa or status the child has while overseas? Our daughter would just be visiting on a tourist visa, not enrolling as a permanent resident or anything. I assume that's fine since it's clearly temporary, but wanted to check if anyone has experience with this aspect. Thanks to everyone who shared their experiences - this is exactly the kind of real-world advice you can't get from just reading IRS publications!

This is such a helpful thread! I'm dealing with something similar but with a twist - we're considering sending our 3-year-old to a Montessori program in Italy for 4 months while we're working remotely from there. One thing I haven't seen mentioned is whether the "care" requirement changes if you're physically in the same country as your child, even if they're staying with relatives. In our case, we'd be working full-time in Italy while our son stays with my parents about 2 hours away and attends the local Montessori school. I'm wondering if this still qualifies as "dependent care" for tax purposes since we'd technically be available (though not practically, given our work schedules and the distance). Has anyone dealt with a situation where the parents and child are in the same foreign country but the child is being cared for by others during work hours? Also, does anyone know if there are different documentation requirements when the parents are also temporarily abroad versus when only the child is overseas? I want to make sure I'm not missing any nuances that could affect our eligibility for the FSA or tax credit benefits.

I'm a small business owner who went through something very similar about 18 months ago. My bookkeeper had been using an incorrect EIN (off by one digit) for almost two full tax years before we caught it during a routine review. The most important thing is to act quickly and be completely transparent with the IRS. I called their Business & Specialty Tax Line and the agent was actually quite helpful once I explained it was an honest clerical error by my tax preparer. Here's my step-by-step process that worked: 1) Gathered all documentation - original EIN letter, copies of incorrectly filed returns, proof of all payments made, 2) Called the IRS to report the error and get a case number, 3) Filed amended returns with detailed explanation letters for each affected year, 4) Followed up regularly until everything was resolved. The whole process took about 4 months, but no penalties were assessed since I was proactive and could prove all taxes were actually paid on time. The IRS sees these EIN transposition errors more frequently than you'd think. One critical tip - make sure to check ALL your filings, not just income tax returns. This includes quarterly payroll reports (941s), annual unemployment reports (940), and W-2s. If any of those used the wrong EIN, you'll need to file corrections for those as well. Your CPA should absolutely handle this correction at no cost since it was their error. If they won't take responsibility, consider finding someone more reliable for future filings.

This happened to my consulting business about a year ago - my CPA had transposed two digits in our EIN for both 2022 and 2023 returns. I was terrified when I discovered it, but it turned out to be much more manageable than I expected. Here's what I learned: The IRS actually has a pretty straightforward process for EIN corrections. Call their Business & Specialty Tax Line at 800-829-4933 first thing - they'll create a case file and give you specific instructions for your situation. The agent I spoke with said they see these clerical errors regularly and are usually very reasonable about penalty waivers when you're proactive. You'll need to file amended returns (1120X or 1040X depending on your business structure) with a detailed explanation letter for each affected year. Make sure to emphasize that this was an "inadvertent clerical error by tax preparer" and that all tax obligations were fulfilled on time. Document everything - get case numbers, agent names, reference numbers for all communications. Keep copies of all payment confirmations showing you actually paid your taxes, even though they were credited to the wrong EIN initially. The good news is that since your payments went through fine, the IRS can see you were compliant with your tax obligations. That goes a long way toward getting penalties waived. Your CPA should absolutely handle all the correction paperwork at no charge since this was their mistake. If they won't take responsibility, that's a red flag about their reliability going forward. The whole process took about 3-4 months for me, but everything was resolved with no penalties. You've got this!

I'm really sorry this happened to you - missing the 83(b) election is such a common mistake that catches so many startup employees off guard. The 30-day deadline is unfortunately non-negotiable, and there's no way to file it retroactively after this much time has passed. Since your equity had $0.00 FMV when granted, you would have owed virtually no tax with a timely 83(b) election. Now you'll face ordinary income tax on the fair market value at each vesting date instead of locking in the $0 value upfront. The key now is proactive tax planning. I'd strongly recommend: - Getting your company's current 409A valuation immediately to estimate what you'll owe when your first 25% vests - Starting to set aside 35-45% of the estimated vested value for taxes (covering federal, state, and payroll taxes) - Asking about your company's policy on share sales since many private startups don't allow employees to sell shares to cover tax obligations If your company's valuation has grown significantly since January 2024, you could face substantial tax bills that you'll need to pay out of pocket. Consider whether you'll need to make quarterly estimated tax payments to avoid underpayment penalties. The silver lining is there are no penalties for not filing the election, and your cost basis will be stepped up to the FMV at vesting, preventing double taxation on future sales. It's not ideal, but definitely manageable with proper planning. Don't be too hard on yourself - focus on getting prepared for the upcoming vesting events!

I feel for you on this - missing the 83(b) election is such a gut punch, but you're definitely not alone. I made the same mistake with my first startup equity grant and spent weeks beating myself up about it. The harsh reality is that the 30-day deadline is absolutely ironclad - I even tried reaching out to a tax attorney to see if there were any exceptions, but there simply aren't any. The IRS doesn't grant extensions or allow late filings for 83(b) elections, even in extraordinary circumstances. Here's what I learned from my experience: while you can't fix the missed election, the situation isn't catastrophic if you plan properly. Since your shares had $0.00 FMV at grant, you're essentially moving from paying no tax upfront to paying ordinary income tax as shares vest. The real question is how much your company's valuation has grown since January 2024. My advice would be to immediately request the current 409A valuation from your company - they should share this since it directly impacts your tax planning. If the valuation is still relatively low, your tax hit might be manageable. But if your startup has raised funding or grown significantly, start preparing for potentially substantial tax bills. I ended up setting aside about 40% of each vesting tranche's estimated value to cover all taxes, and that worked well. Also consider whether you'll need quarterly estimated payments - if you expect to owe over $1,000 beyond normal withholdings, the IRS expects quarterly payments to avoid penalties. The silver lining is that your cost basis gets stepped up at each vesting date, so you won't face double taxation when you eventually sell. It's not ideal, but definitely manageable with proper planning ahead of your vesting dates.