Don't overthink this - I was in your exact situation last year. The gift tax annual exclusion is $17,000 for 2023 and now $18,000 for 2024, so unless her contribution to the joint account exceeds that amount in a single year, you're fine anyway. Plus, like others mentioned, it's not even a gift since you're both going on the title. My girlfriend and I just kept careful records of who contributed what to our down payment so we could properly document our respective equity if we ever need to (hoping we don't!). We actually drew up a simple agreement showing our initial contributions even though we're both on the mortgage and deed. Might be worth doing.

Something to consider that hasn't been mentioned yet - make sure you're both clear on how you'll handle the mortgage interest deduction when you file your taxes next year. Since you're unmarried but both on the mortgage, you'll need to decide how to split the deduction between your separate tax returns. The IRS allows unmarried co-owners to each deduct their proportional share of mortgage interest based on their ownership percentage. So if you're 60/40 contributors as you mentioned, you might want to document that split for tax purposes too. Your tax preparer will ask about this when filing season comes around. Also, just a practical tip - if you do end up consolidating the funds, make sure to get a cashier's check or wire transfer for closing rather than a personal check. Most title companies won't accept personal checks for amounts that large, and it avoids any last-minute surprises at the closing table.

I'm still confused about something...if safe harbor only applies to estimated payments, what's even the point? If I follow safe harbor rules for my quarterlies but still end up owing a lot more at tax time, I still get penalized?? That seems really unfair!

I think there's some confusion here about what the substantial underpayment penalty actually is. It's not a penalty for owing more tax than expected - it's specifically for accuracy-related issues on your return. The substantial underpayment penalty under IRC Section 6662 applies when you understate your tax by the greater of $5,000 OR 10% of the correct tax. But this penalty is for things like negligence, disregard of rules, or substantial understatement - not just for owing more than you thought you would. So @Maria, if you follow safe harbor rules and end up owing more at tax time simply because your income was higher than expected, you won't face the substantial underpayment penalty as long as your return is accurate and you didn't negligently understate your tax liability. You'd only face this penalty if there were actual errors or questionable positions on your return that caused you to significantly understate what you truly owed. The safe harbor rules are incredibly valuable - they let you make reasonable estimated payments without having to perfectly predict your income, and you won't get penalized for underpaying quarterlies as long as you meet the safe harbor thresholds.

Friendly reminder that even if the wrong form number was the issue here, always double-check your actual tax forms against what you're inputting in the software. I made a typo on entering a number from my W-2 last year and ended up having to file an amendment, which was a huge pain.

Great point about double-checking everything! I learned this the hard way too. Another tip for anyone using FreeTaxUSA - they have a really helpful review section before you submit that shows you all the forms that will be included in your e-filing. It's worth taking a few minutes to scan through that list to make sure everything looks right, especially if you're filing forms you haven't used before like the HSA form 8889. Better to catch any issues before hitting submit than dealing with amendments later!

So I'm a mortgage underwriter and see this question occasionally. The mortgage subsidy recapture is definitely real, but there are several exemptions most people don't know about: 1) If you sell your home at a loss, no recapture tax is due 2) If your income doesn't exceed the qualifying income by more than 5% compounded annually, no recapture tax is due 3) If you refinanced into a conventional loan during the 9-year period, the rules get complicated (sometimes it still applies, sometimes not) For the original poster - yes, file the form. The amount owed decreases each year you own the home, and at 8 years 9 months, you're only paying 20% of the max recapture amount. The IRS doesn't typically hunt people down for this specific issue, but if you get audited for any reason, they will definitely catch it.

I'm dealing with this exact same situation right now! Bought my first home with an FHA loan in 2016 and just sold it last month after 7 years and 8 months. Found that same paperwork buried in my files and had a mini panic attack. After reading through all these responses, I'm definitely going to file Form 8828. The income exemption might save me though - my salary has gone up but I don't think it's increased by more than 5% annually compared to the area median income. One thing I learned from my closing documents is that the original "federally subsidized amount" was clearly stated in the disclosure I signed at purchase. It was buried on page 47 of my loan docs but it's there. If anyone else is looking for this number, check your HUD-1 settlement statement or the mortgage subsidy disclosure form you would have signed. Thanks everyone for the helpful info - this community is a lifesaver for navigating these obscure tax situations!

My experience with Chime has been inconsistent. Last year got it 2 days early, this year got it right on the DDD date. I think it depends on what time of day the IRS actually releases the payment batch.

Chime user here! I've been using them for my tax refunds for the past 3 years. This year I got my deposit exactly 1 day early - my transcript showed a DDD of March 5th and it hit my Chime account on March 4th around 6 AM. In my experience, Chime typically gets deposits anywhere from same day to 2 days early, but it's not guaranteed. The timing really depends on when the IRS releases the batch and how quickly Chime processes it. I'd say expect it potentially 1-2 days early but don't count on it being more than that. Good luck!