Omg I didn't even think about that possibility! How would we know if that's what happened? And what did you have to do to fix it?

You can usually tell if there's potential identity theft if the notice mentions income sources your son didn't actually have. For example, if the notice shows income from employers he never worked for or investment income from accounts he doesn't own. In our case, we had to file Form 14039 (Identity Theft Affidavit) with the IRS and provide documentation proving my daughter's legitimate income. We also placed a fraud alert on her credit reports and froze her credit as a precaution. The IRS has a special department for tax-related identity theft cases, and they eventually cleared everything up - though it did take about 4 months to fully resolve.

I work in tax prep and we're definitely seeing an uptick. The IRS got a funding boost to go after unpaid taxes, but their systems are still outdated. They're basically casting a wider net with automated notices hoping to catch actual issues, but it means way more false positives.

Did you find it difficult to negotiate that part-time with benefits arrangement? I've been thinking about trying something similar but worried companies would just laugh at the idea. Any tips on how to approach it?

I was definitely nervous about asking! The key was approaching companies that already advertised flexible work arrangements rather than trying to convince traditional employers. I researched which companies in my field were rated well for work-life balance and specifically mentioned I was looking for part-time professional work with benefits during interviews. It took about 6 interviews before I found the right fit. I also gained leverage by offering to work reduced hours for slightly reduced pay percentage (I work 25 hours but get paid 70% of full-time salary). The company saves some money while still getting an experienced professional, and I get the flexible schedule plus benefits I needed.

I'd never thought to check the library for financial resources. What kinds of databases did they have access to? Was it mostly general info or could you get personalized advice too?

Do you know which states offer these additional education credits? I'm in California and wondering if there's something similar I could claim.

I don't know all the states, but I know California doesn't have a specific education credit like New York does. Some states that definitely have education tax benefits include Indiana, Massachusetts, Michigan, and Wisconsin. The best way to find out is to check your state's department of revenue website or look at your state tax forms for education-related credits or deductions. Sometimes they're called different things like "Education Expense Credit" or "Tuition and Fees Deduction.

Thanks for the warning! Since I'm returning to college and have taken classes years ago, I'll need to figure out if I've already used up my 4 years of American Opportunity Credit eligibility. Is there any way to check that, or do I just need to look through my old tax returns?

You'll definitely want to check your previous returns if you have them. The AOC can only be claimed for 4 tax years total, and they don't have to be consecutive. If you went to college right after high school and claimed it then, you might have used it up already. If you don't have your old returns, you can get tax transcripts from the IRS website that will show if you claimed the credit before. Just go to IRS.gov and search for "Get Transcript." This is something you want to be 100% sure about because claiming it a 5th time would definitely trigger problems.

My employer actually picks the plan and pays the premium directly to the marketplace. They just give me this weird separate W-2 at the end of the year showing what they paid. So based on what you're saying, that would be the first scenario? And does that change how I should enter it in TurboTax?

Yes, if your employer selects and pays for the plan directly, that's more like traditional employer-provided coverage, just administered through the marketplace instead of a group plan. In this case, you would enter the W-2 normally in TurboTax, and the software should recognize that these amounts aren't subject to federal income tax. Just make sure when entering the W-2 that you include any codes shown in Box 12, as these codes tell the tax software how to treat different types of income. If your W-2 has code DD in Box 12, that explicitly marks the amount as employer-provided health coverage, which is not included in taxable income.

I've had issues with TurboTax too. Try checking if there's a code in Box 12 of your W-2 (like DD for employer health coverage). Sometimes TurboTax doesn't recognize these codes if you don't enter them exactly. Also worth reviewing the "Review" section before filing to make sure the taxable income calculation looks right.

Thanks for the tip! I'll definitely double check the Box 12 codes this time. I think last year I might have skipped over that part since I didn't know what those codes meant. Really appreciate the advice!

That's good to know about the refund time limit. Do you know if filing for an extension would help with that deadline at all? And did you have to fill out any special forms to explain the guardianship situation to the Taxpayer Advocate?

Unfortunately, extensions only give you more time to file - they don't extend the three-year window for claiming refunds. That three-year clock starts on the original due date of the return regardless of extensions. For 2020 taxes (due in 2021), you're approaching that deadline, so prioritize that year first if possible. For the Taxpayer Advocate Service, you'll need to complete Form 911 (Request for Taxpayer Advocate Service Assistance), along with documentation of your guardianship/POA. Having your Form 2848 already completed helps. They're very familiar with guardianship situations and can sometimes help expedite transcript requests or provide guidance specific to your circumstances.

This is important. I made the mistake of not properly closing my dad's business when I became his guardian, and it caused all kinds of headaches years later. The state kept assessing annual fees and eventually sent it to collections because we thought just stopping operations was enough.