Can both parents in the same household file as Head of Household? I thought there was some rule against that if you live together?

Hey Sean! Congratulations on the upcoming baby! Your situation isn't as complicated as you think. You're absolutely right that you can file as Head of Household based on your new baby, even with a December birth. Here's the key thing everyone's touched on but I want to emphasize: for Head of Household, you need YOUR qualifying person. Your girlfriend's son doesn't count for YOUR filing status since you're not married yet - he's not legally your stepchild. But that's totally fine because your biological child will be your qualifying person. The December timing works in your favor too. As others mentioned, the "more than half the year" rule for a newborn only applies to the time since birth, not the full calendar year. One practical tip: start keeping detailed records NOW of all household expenses you pay (rent/mortgage, utilities, groceries, etc.). You'll need to show you paid more than half the cost of maintaining the home. This becomes especially important since you and your girlfriend will both potentially be filing as Head of Household from the same address - the IRS may want to see clear documentation of who paid what. Good luck with the baby and congratulations on the upcoming wedding next summer!

Has anyone looked into using a Roth conversion strategy here? I'm wondering if it would make sense to convert portions of the Inherited IRA to a Roth Inherited IRA over time. You'd pay taxes on the conversion amounts now, but then future growth would be tax-free, and distributions from the Roth wouldn't be taxable income. Might be worth considering if you think tax rates will increase in the future.

I went through something very similar when my grandmother passed and left me as the sole beneficiary on her 401k, even though she wanted it split between me and my two cousins. One thing that really helped was getting all parties on the same page early about the tax situation. I created a simple spreadsheet showing exactly how much we'd each net after taxes if I took distributions at my rate versus what we would have received if the accounts had been set up differently from the start. What ended up working for us was a combination approach: I took the required minimum distributions each year and immediately gifted the after-tax amounts to my cousins. For larger distributions, I timed them for years when I had lower income (like when I took unpaid parental leave). The key was being completely transparent about every dollar coming in and going out. I shared all the tax documents and distribution statements so there were no questions about the process. It took a few years to fully distribute everything, but we minimized the tax hit and everyone felt the process was fair. One last suggestion - definitely consult with a tax professional who has experience with inherited IRAs. The rules are complex and the stakes are high enough that professional guidance is worth the cost.

Has anyone used health insurance premiums as a deduction while traveling? I'm paying for a global health insurance plan that covers me in all countries ($370/month) and wondering if that's fully deductible as self-employed.

Great thread! As someone who's been doing the digital nomad thing for 3 years, I'd add a few more deductions that might apply to your situation: **Equipment depreciation** - If you buy a laptop, camera, or other business equipment while traveling, you can depreciate it over several years or take the Section 179 deduction for the full amount in year one (up to certain limits). **Professional memberships and subscriptions** - Any industry associations, professional development platforms, or business-related subscriptions are fully deductible. **Banking and payment processing fees** - International transaction fees, wire transfer costs, and payment processor fees (PayPal, Stripe, etc.) are all business expenses. **Legal and professional services** - Tax prep, business formation costs, contract reviews, etc. **Travel between client locations** - While personal travel isn't deductible, if you're traveling specifically to meet clients or for business purposes, those costs can be deducted. One thing that helped me was opening a dedicated business checking account and putting ALL business expenses on a business credit card. Makes tracking so much easier come tax time. Also, consider using apps like Expensify or similar to photograph receipts immediately - you'll thank yourself later! The Foreign Earned Income Exclusion is definitely worth pursuing if you can hit those 330 days. At your income level, it could eliminate most of your federal tax liability.

Just a quick tip: make sure you keep proof of when you file! Even if there's no penalty, it's good to have documentation showing you filed as soon as you realized the mistake. Take screenshots of your filing confirmation or save the email receipt. I had an issue a couple years ago where the IRS claimed they never received my return even though I filed electronically. Having the confirmation email with date and time stamp saved me a huge headache.

Don't panic - you're in a much better situation than you think! Since you're expecting a refund of around $870, there are absolutely no penalties for filing late, even past the extension deadline. The IRS only penalizes late filing when you owe them money. That said, definitely file this weekend as planned. While there's no penalty, you're essentially giving the government an interest-free loan of your refund money. Plus, you want to get it done before you forget again or lose any documents. For your multi-state situation with the job change and move, TurboTax should handle it well. Just make sure you have all your W-2s from both states and any documentation related to your move - some moving expenses might be deductible depending on your situation. The key thing is to file accurately rather than rushing. Take your time to make sure you capture all your income sources and potential deductions from your move and job change. You've already waited this long, so a few extra hours to do it right won't hurt.

Has anyone noticed PayPal's new reporting requirements? I think they're sending 1099-Ks for much smaller amounts now which means the IRS is getting more visibility into these transactions anyway.

I've been dealing with this exact situation for my consulting business. One thing to keep in mind is that you should also save screenshots or records of the PayPal transaction details showing the breakdown of the payment and fees. This documentation will be helpful if you ever get audited, since it clearly shows the $1250 you paid for services versus the $40 PayPal fee. I learned this the hard way when my accountant asked for detailed records during tax prep last year. Also, make sure you're consistently handling all your PayPal transactions the same way - don't mix and match reporting methods or it could raise red flags.