Thank you for this clear explanation! I've been so confused and worried. Do you think I should keep specific documentation showing I pay for everything? Like copies of mortgage payments, utility bills, etc.? And is there any chance they'd make my girlfriend amend her return?

Yes, definitely keep documentation of everything you pay for - mortgage/rent receipts, utility bills, grocery receipts, childcare expenses, medical bills for the child, etc. The more you can document that you covered the majority of household costs, the better. The IRS typically won't force your girlfriend to amend her return based on your filing. However, if both of you were audited, they might determine who was actually entitled to claim the child. Since you're not disputing her right to claim the child as a dependent (just filing HOH based on your household contribution), you should be fine.

This is actually really good advice. My ex and I had similar tax disagreements and it was a symptom of bigger financial incompatibility. We ended up working with a financial counselor who helped us create a fair system for expenses AND tax benefits. Might be worth looking into.

You make a good point. We've definitely been having some disagreements about money lately. She feels entitled to claim our daughter because she makes less money and gets a bigger refund that way, but I'm the one covering almost all our expenses year-round. Maybe this is about more than just taxes.

Would a letter from the bank explaining their error be helpful too? My credit union offers to provide error documentation letters when they make mistakes.

Absolutely! A formal letter from your bank explaining their error would be extremely valuable. That's basically gold when dealing with the IRS for penalty abatement. If your credit union is offering that, definitely take them up on it. The IRS looks for official documentation when considering reasonable cause for penalty relief. A formal letter from the financial institution taking responsibility for the error is much stronger evidence than just your explanation of what happened.

Did you have to file any special forms when you resubmitted? Or did you just send a payment with an explanation letter?

This makes so much sense, thank you! That was exactly my concern - that without documenting last year's basis correctly, I might mess up the calculations for this year. If I submit the standalone 8606 forms for last year now, should I wait to receive confirmation before filing this year's return? Or is it ok to go ahead and file as long as I've sent in the previous forms?

You don't need to wait for confirmation from the IRS before filing this year's return. As long as you've submitted the prior year's Form 8606 before you file this year's return, you're in good shape. When completing this year's Form 8606, you'll use the basis information as if last year's form was properly filed, since you're now correcting that oversight. Just keep copies of everything you send to the IRS, including proof of mailing for the prior year forms. This documentation will be important if there are ever any questions about your IRA basis in the future.

I second FreeTaxUSA for handling Backdoor Roth stuff! IRS Free Fillable Forms is just too easy to make mistakes with since it doesn't guide you through what forms you need based on your entries.

My CRA account just says "information unavailable" when I try to check benefit dates. Any idea why?

That "information unavailable" message usually appears for one of three reasons. First, your return might still be in processing and they haven't calculated your benefit amounts yet. Second, there could be a review flag on your account that's temporarily suspending benefit calculations. Third, there might be an issue with your CRA online account access. Try checking the "Account messages" section to see if there are any notices about your account being under review. If nothing shows up there, it's probably just still processing, especially if you filed your 2022 return recently. Processing times for late returns can take 8-12 weeks before benefits start showing up in your online account.

Yes! Mine changed too. From what I understand, they're staggering payment dates to reduce system load. My payment date shifted from the 10th to the 15th. I called and they said it's normal.

Thanks for bringing this up - I hadn't considered the basis limitations! Any simple way to calculate my basis? I've had the S-corp for about 5 years, started with $5K initial investment, and have been putting in some money each year to cover expenses (around $15K total over the years). Never taken any distributions.

Your basis starts with your initial investment ($5K) and increases by any additional capital contributions ($15K) and any income that was reported to you on K-1s over the years. It decreases by losses and any distributions you took. So if you never took distributions, your basis would be $5K + $15K + any income reported on K-1s from previous years - any losses from previous years. You'll need to look at all your old K-1s to track this properly. If your basis went to zero in a previous year, any excess losses would be suspended and carried forward until you have basis again. This is separate from the NOL rules and often catches people by surprise.

I tried using TurboTax for my S-corp NOL last year and it was a nightmare. It kept asking me questions that didn't make sense for an S-corp, and I don't think it properly tracked my basis. I ended up paying a CPA to fix everything and it cost me way more than if I'd just gone to them in the first place.