Has anyone used TurboTax for reporting the annual I-Bond election with an early redemption penalty? Does it handle this situation correctly or do I need to make manual adjustments?

This is a really helpful thread! I'm dealing with a similar situation with my teenager's I-Bonds. We elected annual reporting to take advantage of the kiddie tax exclusion, but I was confused about how to handle the 3-month penalty when we had to redeem early for unexpected expenses. Based on what everyone has shared here, it sounds like option 1 is definitely the way to go - only report the interest you actually get to keep. It makes sense that the penalty effectively means that interest was never earned in the first place. I'm curious though - does this same principle apply if you have multiple I-Bonds purchased at different times and you only redeem some of them early? Do you calculate the penalty impact on a bond-by-bond basis, or is there some other method for tracking which specific interest gets forfeited?

You'll want to ask your brokerage for what's usually called a "gift transfer form" or "securities gift documentation." Most major brokers have specific forms for this - for example, Fidelity calls it a "Gift of Securities Form," while Schwab uses an "Account Transfer Form" with a gift designation option. When you submit the request, make sure to specify that this is a gift transfer (not a sale) so they document it properly with the original cost basis. The paperwork should clearly show: 1) the transfer date, 2) that it's a gift (not a sale), 3) the original purchase date and cost basis of the securities, and 4) both your and your brother's identifying information. Most brokers will automatically generate the proper documentation, but it doesn't hurt to explicitly ask them to note it as a gift transfer in their records. This creates a clear paper trail that will be invaluable if there are ever any questions down the road about the cost basis or gift tax implications.

I've been following this thread and wanted to share my experience as someone who made the opposite choice - we kept our joint account and just dealt with the annual tax splitting. My sister and I have had a joint investment account for about 3 years now, and while the tax documentation is a bit more work each year, it's actually been manageable. We created a simple shared Google Sheet that tracks our contributions, dividends received, and any trades. Each December we run through it and calculate our respective portions of the 1099 income. I report everything on my return (since my SSN is primary), and she reports her portion on hers with a note explaining the allocation. Our tax preparer said this approach is totally fine as long as we're consistent and keep good records. The main advantage for us has been easier ongoing management - we can make investment decisions together and pool our buying power for certain positions. But reading through all these responses, I can definitely see how the separate account approach would be cleaner, especially if you're not actively managing investments together on an ongoing basis. Just wanted to offer the perspective that the joint account approach can work if you're willing to put in the annual documentation effort!

Did you check box A, B, C, D, or E on the form? If you're claiming any of the special conditions for waiver (like I had to when I had an unexpected wealth event mid-year), you need to attach an explanation letter along with the form. The IRS was super picky about having that documentation when I filed my 2210.

Based on everyone's responses, it sounds like the most likely issue is that you need to use 110% of your 2022 tax liability for line 5 since your AGI was over $150,000. But before you resubmit, I'd suggest double-checking a few things: 1. Make sure you're looking at the actual tax amount from line 16 of your 2022 Form 1040 (not line 24 which includes additional taxes) 2. Calculate both 90% of your 2023 tax ($13,423.50) AND 110% of your 2022 tax, then use whichever is smaller 3. If you haven't already, consider whether any of the waiver conditions apply to your situation (boxes A-E on the form) The good news is that once you get the calculation right, the IRS should process your refund relatively quickly. I went through something similar last year and it was frustrating, but getting that line 5 calculation correct based on your income level should resolve the issue.

Heads up - you might also want to check if your current car insurance covers delivery driving. Most standard policies don't, and if you get in an accident while delivering, they might deny your claim. I found out the hard way unfortunately.

Great question! I was in a similar situation last year - working part-time and picked up DoorDash to make ends meet. Here's what I learned: You're right to be thinking about taxes early! Since DoorDash classifies you as an independent contractor (not an employee), you won't get a W-4 from them. Instead, you'll receive a 1099-NEC if you earn $600+ in a year. For your primary job's W-4, I'd recommend updating it to account for the extra income. A good rule of thumb is to set aside about 25-30% of your DoorDash earnings for taxes (this covers both income tax and self-employment tax). You can have your main employer withhold extra from each paycheck by putting an additional amount in line 4(c) of your W-4. Also, start tracking your mileage from day one! It's your biggest potential deduction. I use a mileage tracking app and it saved me hundreds last tax season. One more tip - if you think you'll make more than $1,000 from DoorDash this year, you might need to make quarterly estimated tax payments to avoid penalties. The IRS has worksheets to help calculate this. Good luck with the side gig! It definitely helped me get through some tight months.

Anyone have experience with H&R Block's handling of Form 2210? TurboTax always seems to calculate a penalty for me even when I don't think I should have one, wondering if switching software would help.

I had this exact same issue! The key thing to understand is that Line 8 on Form 2210 should be the SMALLER of two amounts, not necessarily your full 2023 tax liability. Since you mentioned having 110% of your 2023 tax withheld, you should definitely qualify for safe harbor protection. The problem might be that TurboTax isn't correctly applying the "deemed paid evenly" rule for W-2 withholding. Here's what worked for me: I manually calculated Form 2210 using both the regular method and the annualized income installment method to see which gave me a lower penalty (or no penalty). Sometimes the software defaults to one method when the other would be more favorable. Also, double-check that TurboTax is correctly pulling your 2023 tax amount. I've seen cases where the software uses the wrong line from the prior year return, especially if you had refundable credits that affected your actual tax liability vs. what you owed. If you're still getting a penalty calculation after verifying these details, you might want to file Form 2210 manually with your return to override the software's calculation.