7 Did you have to pay penalties when this happened? I'm worried because my mom already filed her taxes but I don't think she claimed my education expenses (even though she paid them). I was planning to claim them on my return.

4 We didn't have to pay penalties because we filed the amended returns quickly after getting the audit notice. The IRS was actually pretty understanding once we explained the confusion. In your case, if you're certain your mom didn't claim the education expenses on her return, you should be fine to claim them on yours (assuming you're not claimed as her dependent). If you're worried, you could ask her for a copy of her tax return to verify, or have her check with her tax preparer to confirm she didn't claim any education credits related to your tuition.

13 Yes, you can claim both the Lifetime Learning Credit for qualified education expenses AND the student loan interest deduction in the same year, as long as you're not using the same expenses for both benefits. The student loan interest deduction is for interest paid on qualified student loans during the year (up to $2,500), while the Lifetime Learning Credit is based on qualified education expenses paid during the year. They're separate tax benefits targeting different things. Just make sure you meet the income requirements for both - the student loan interest deduction starts phasing out at modified AGI of $75,000 for single filers, and the Lifetime Learning Credit phases out between $80,000-$90,000 for single filers.

But what if the distribution happened in December 2024 but you don't get the 1099-R until February 2025? Wouldn't that mess up your filing for 2024 if you've already submitted before getting the form?

That's a great question! If a distribution happens in December 2024, but you don't receive the 1099-R until February 2025, you still need to report it on your 2024 tax return. If you've already filed your 2024 return before receiving this form, you would need to file an amended return (Form 1040-X) to include the information from the late-arriving 1099-R. That's why many financial advisors recommend waiting until at least mid-February to file if you know you had distributions, to make sure you've received all your tax documents.

What tax software do you recommend for handling retirement distributions? I've got a mix of regular withdrawals and rollovers this year and I'm worried about messing it up.

Thanks for bringing this up! I actually do have quite a bit of documentation. I've got text messages where she said she was leaving, bank records showing she stopped contributing to household expenses, and I filed a police report when she took some of her belongings in May. I've also been paying all the bills since then which shows I've been the only one maintaining the household. Would it be worthwhile to get a written statement from my neighbors or family members who know about the situation?

Yes absolutely get those statements! The more documentation the better, especially from "neutral" third parties like neighbors. People don't realize how often these situations get messy when exes try to dispute things later. One more thing - if you have any shared accounts that are still open, keep detailed records of who's contributing what. When I filed Head of Household after my separation, I created a spreadsheet showing I had paid 94% of our household expenses that year. The IRS never questioned my filing status, but having that ready gave me peace of mind.

Your filing status is determined by your situation on December 31st of the tax year. So if your children lived with you for more than half the year in total (doesn't have to be consecutive months), and you paid more than half the costs of keeping up the home where you and your children lived, you might qualify for HOH. The key factors are: 1) Did your children live with you for more than half the year in total? 2) Did you pay more than half the household expenses for the home where you and the children lived? 3) Are you and your spouse living apart for the last 6 months of the year?

Thanks for mentioning this! How would I know if a payment was applied to the wrong year? I made my Q4 payment in January 2024 but it was for tax year 2023. Should I be concerned?

If you made your Q4 payment in January 2024 but intended it for tax year 2023, you should be fine as long as you designated it correctly when making the payment. The IRS form/payment system usually asks you which tax year the payment is for. To verify this, you can check your payment confirmation from when you made the payment. It should indicate the tax year. If you're still concerned, you can create an online account at IRS.gov and view your payment history, which shows which tax year each payment was applied to. Just make sure when entering in FreeTaxUSA that you include this payment with your 2023 estimated payments, even though you made it in 2024.

Their interface is definitely not the most intuitive. I found it by using the search feature at the top - just type "estimated payments" and it should take you directly to that section. Saved me a ton of time hunting through menus!

Thanks for this suggestion! My income is actually within the Roth IRA eligibility range but below the higher threshold. I was trying to diversify between pre-tax and post-tax retirement savings, but if I can't deduct the Traditional IRA contributions anyway, switching to Roth IRA might make more sense. Would there be any advantage to keeping non-deductible Traditional IRA contributions rather than just going with the Roth IRA directly?

If you can't deduct your Traditional IRA contributions and you're eligible for a Roth IRA, there's generally little advantage to making non-deductible Traditional IRA contributions instead of contributing directly to a Roth IRA. The main exception would be if you're planning to use the "Backdoor Roth" strategy in the future. Some people make non-deductible Traditional IRA contributions and then immediately convert them to Roth. This can be useful for those who exceed the Roth IRA income limits. However, this gets complicated if you already have other pre-tax money in Traditional IRAs due to the "pro-rata" rule.

I used TurboTax this year with the exact same retirement setup (Roth 401k + Traditional IRA), and it also said my Traditional IRA wasn't deductible because I participate in a workplace plan. So I think all the major tax software follows the same IRS rules on this.