Just adding another consideration - depending on your income level, claiming your grandmother might give you access to other tax benefits besides just the dependent exemption. If you qualify as "Head of Household" filing status because of her, that gives you better tax brackets and a higher standard deduction. You might also qualify for a "Credit for Other Dependents" which is worth up to $500. And if you're paying medical expenses for her, those could potentially be deductible if your total medical expenses exceed 7.5% of your AGI.

This is such a complex situation that really highlights how confusing tax law can be when it intersects with benefits! I'm dealing with something similar with my elderly father. One thing I'd suggest is getting the exact breakdown of your grandmother's SSI vs SSDI amounts from her Social Security statements. The $1,240 total could be split different ways, and knowing the precise SSDI amount will tell you definitively if she's under that $4,800 gross income threshold. Also, keep detailed records of everything you're spending on her support - not just the big things like rent and food, but also things like clothing, transportation to medical appointments, etc. The IRS has a specific worksheet (Publication 501) for calculating support, and it's more comprehensive than most people realize. The point about potential SSI reductions is really important too. You might want to call your local Social Security office to ask about how claiming her as a dependent could affect her benefits before you file. Sometimes the tax savings don't offset the benefit reduction.

One thing nobody mentioned - check if your work qualifies as a "permanent establishment" under Article 7 of the US-Belgium tax treaty. If it does, different rules might apply. This bit me when I was contracting with a US company from Sweden.

Dont forget about social security! The US and Belgium have a totalization agreement that prevents double taxation on social security. You'll probably pay into the Belgian system only since you live there permanently, but you need to get a certificate of coverage from Belgian authorities.

Great question! I went through the same confusion a few months ago. The trace number is basically the IRS's internal tracking ID for your specific refund payment. When you see "funded to you" with a trace number, it means your refund has been fully approved and is now in the payment pipeline. You should see your money within 3-5 business days for direct deposit or 1-2 weeks for a mailed check. The hardest part is over - your return cleared all their checks and reviews. Now it's just a matter of the payment system doing its thing. Hang in there, you're almost done!

I see you're getting great answers here! Just wanted to add that you can also check your bank account for any pending deposits - sometimes the money shows up there before the IRS website updates to "refund sent" status. I've noticed with my credit union that refunds often appear as pending a day or two before they actually clear. The trace number is definitely your green light though - you're in the final stretch! Fingers crossed it hits your account soon. 🤞

Has anyone actually received the stimulus payments as part of their late-filed returns? I filed my 2020 return in February 2023 and claimed the recovery rebate credit but I'm still waiting. IRS "Where's My Refund" just says it's still processing.

@Abby Marshall, I was in almost the exact same situation last year! I filed my 2020 and 2021 returns super late while still having unfiled 2018 and 2019 returns. The good news is that you should still get your refunds - the IRS processes each year separately like others mentioned. One thing to watch out for though - if you end up owing money on those older unfiled returns, the IRS can and will apply your current refunds to those balances once you eventually file them. So you might get your refunds now, but if you owe for 2018/2019, they could come back later and ask for some of that money back. My advice would be to try to at least get a rough estimate of what you might owe or be owed for those missing years before spending your refund money. That way you won't get caught off guard later. The stimulus payments should definitely come through with your 2020 return though - those were processed pretty smoothly even for late filers in my experience.

Don't forget that not all "donations" are tax deductible! I learned the hard way last year that giving money to GoFundMe campaigns and directly to individuals doesn't count for tax purposes. Has to be a qualified 501(c)(3) organization. Check before you donate if tax benefits matter to you!

One thing I haven't seen mentioned yet is that you can carry forward unused charitable deductions for up to 5 years if you exceed the AGI limits in any given year. So if you have a particularly generous year where your donations exceed 60% of your income, you don't lose those deductions - they roll over to future tax years. This is especially helpful for people who make large one-time donations or have variable income. Just make sure to keep good records of what you're carrying forward each year!