Just a quick bit of advice based on my experience as someone who's filed with 1098-Ts for years: make sure you understand the difference between Box 1 and Box 2 on the form! Box 1 shows payments RECEIVED by the school, while Box 2 (on older forms) showed amounts BILLED. The IRS cares about what was actually paid (Box 1), not what was billed. Also, don't forget that you need to subtract any tax-free educational assistance (scholarships and grants) from the total qualified expenses before calculating your credit.

Has anyone used TurboTax for this situation? I'm trying to enter my son's 1098-T but it keeps asking who paid the expenses, and I'm not sure what to put since the money came from several different sources (my account, his savings, and his aunt).

One important thing that hasn't been mentioned is the tiebreaker rules the IRS uses when both parents claim the same dependent. Even as the custodial parent, it's good to know these: 1. If only one person is the child's parent, they get priority 2. If both are parents, the parent who lived with the child longer during the year gets priority 3. If time lived with both is equal, the parent with higher AGI gets priority 4. If neither parent can claim the child, the person with higher AGI gets priority As the custodial parent, you should win under rule #2, but having documentation of the time the kids lived with you is super important!

Just fyi - I got absolutely destroyed when my ex and I both claimed our kid. We both thought we had the right (I was custodial parent but our decree said he could claim in odd years). IRS froze both our refunds for 8 months and we both had to submit tons of documentation. I would highly recommend getting this sorted BEFORE you file rather than dealing with the headache afterward. And definitely don't count on an extension to "lock in" anything - it really doesn't work that way.

Don't forget to check if you qualify for the home sale exclusion too! If you lived in the inherited house as your primary residence for at least 2 of the 5 years before selling, you might be able to exclude up to $250,000 of the gain ($500,000 if married filing jointly). This is ON TOP OF the step-up in basis. So even if you had some gains after the step-up, you might not owe any taxes at all. My brother inherited mom's house, lived in it for 3 years, then sold it for a $75k gain over the stepped-up value and didn't owe a penny in capital gains.

IMPORTANT: Make sure you're keeping track of any improvements your grandmother made to the property!! If she added a new roof, remodeled kitchens/bathrooms, finished a basement, etc., those costs increase her original basis! My tax guy said people forget this all the time and end up paying more in capital gains than they should.

One thing nobody's mentioned here is that you should document everything about your custody time. Keep a calendar marking all days your child was with you, save texts or emails about exchanges, school records showing your address, medical appointments, etc. If this becomes a dispute with the IRS (which happens when two people claim the same child), having documentation is crucial. The IRS will side with whoever can prove they had the child the majority of the time.

Just a heads up - whoever files first usually gets the benefit initially. If your ex's boyfriend files first claiming your child, your e-filed return will likely be rejected. You'll need to paper file and then the IRS will investigate. This happened to me last year. My ex's new wife claimed my kid even though they only had weekend visitation. I had to paper file, and then a few months later we both got letters from the IRS. I sent in my documentation showing my son was with me most of the time, and eventually got my refund with the proper credits.

While everyone's giving advice about dealing with the IRS, don't forget the criminal aspect here. What your mom's husband did is textbook fraud. Document EVERYTHING from those years: 1. Any emails/texts asking you to put the business in your name 2. Proof of your $500/week payments showing you weren't the true owner taking profits 3. Any documents he had you sign without proper explanation 4. Bank statements showing who actually controlled the business accounts Take all of this to the district attorney in the county where the business operated. This is criminal fraud, and they might be interested in pursuing charges especially if there's a paper trail. Also - and this is important - protect your credit immediately. File disputes with all three credit bureaus explaining the situation. Get identity theft protection. A tax lien can destroy your ability to get housing, transportation, or employment for years.

Something nobody has mentioned yet - your mom's husband might have committed identity theft in addition to tax fraud. Contact the Taxpayer Advocate Service (TAS) at 1-877-777-4778. They're an independent organization within the IRS that helps taxpayers resolve problems. Tell them you believe you're a victim of identity theft related to tax fraud. This might qualify you for relief under several IRS programs. The fact that he put a business in your name without your informed consent (you didn't understand the tax implications) is a form of identity theft in many jurisdictions. And despite what others have said about your wife's assets, look into "innocent spouse relief" IMMEDIATELY. If properly filed and approved, this can protect your spouse from liability for these taxes. Don't wait on this - timing matters for these filings.