What about medical expense deductions? My husband has a lot of medical costs but I don't. Does filing jointly or separately matter for that?

Medical expense deductions are definitely impacted by filing status. For 2025, you can only deduct medical expenses that exceed 7.5% of your adjusted gross income (AGI). If you file separately, only your husband's medical expenses and AGI would be considered for his return. Here's a simple example: If your husband's AGI is $40,000 with $10,000 in medical expenses, and yours is $80,000 with minimal medical expenses, filing separately would let him deduct anything over $3,000 (7.5% of $40,000). So he could deduct $7,000. But filing jointly with a combined AGI of $120,000 means you'd only deduct expenses over $9,000 (7.5% of $120,000), reducing your deduction to just $1,000. In cases with large medical expenses, running calculations both ways is definitely worth it.

I've used FreeTaxUSA for the last few years - it's free for federal and like $15 for state. It handles all the married filing jointly stuff perfectly and lets you compare filing jointly vs separately to see which saves more. WAY cheaper than TurboTax and does basically everything the paid version does.

Do you know where I can find info about tax treaties? My in-laws are from India and I've wondered about this too.

You can find tax treaties on the IRS website - search for "United States Income Tax Treaties A to Z" and you'll find a list of all countries with treaties. For more detailed information, look for IRS Publication 901 (U.S. Tax Treaties). For India specifically, there is a tax treaty, but dependency rules are complex. The treaty mainly covers things like double taxation of income, but personal exemptions and dependent status are usually determined by the regular IRS rules I mentioned earlier.

Good point! I think the substantial presence test is 183 days (about 6 months) in a calendar year, so at 8 months she'd likely meet that. Would that make her ineligible as a dependent?

Thanks for the notebook tip - that's a great idea! I'll definitely start doing that. But what's this Section 1244 thing you mentioned? Is that something that would apply to my situation with just selling stuff online as a side thing?

I misspoke about Section 1244 - that's actually for losses on small business stock and wouldn't apply here. What I meant was that resellers can use the "Cost of Goods Sold" section on Schedule C to account for your inventory costs. The notebook method works great for casual sellers. I recommend categorizing items by type and condition, which helps establish a pattern. For example, "vintage t-shirts - good condition - $3-5 each" or "collectible figurines - mint condition - $10-15 each." This creates a reasonable framework for your estimates. Starting this practice now will make next year's taxes much easier, and having some documentation is always better than none.

TurboTax works ok for this but isn't great. It asks for cost of goods sold as a total number rather than helping you itemize. I found FreeTaxUSA actually handled my small eBay business better and asked more relevant questions about inventory and costs. Plus it's way cheaper.

I used TurboTax last year for my Etsy 1099-K. It was decent but I had to manually create my own spreadsheet for tracking cost of goods sold. It doesn't really help with estimating costs when you don't have receipts - you just enter your total estimate. If you're worried about documentation, you might want something more specialized or at least create your own tracking system alongside TurboTax.

Thanks for this detailed list! We actually have most of these documents already because of the custody situation. The court order is definitely the strongest piece, but I hadn't thought about keeping a calendar of the actual days. That's really smart, especially for the first half of the year when he was with us most nights but not all. Do you know if there's a specific form I need to fill out to claim him since he's not my biological child? Or do I just list him as a dependent when filing?

You'll list him as a dependent on your tax return just like you would any other dependent. There's no special form required specifically because he's not your biological child. The regular dependency forms (Form 1040 and the associated schedules) are all you need. When you're entering his information in your tax software or forms, you'll need to specify your relationship to him. Since he's not related to you by blood or marriage, you would typically select "Other" and might need to write in something like "girlfriend's child" or "member of household" depending on the tax software you're using.

You also might qualify for the Earned Income Credit if your income is within the eligible range. Having two qualifying children (your daughter and potentially your girlfriend's son) could significantly increase that credit compared to just claiming one child.

I think I've already missed that window since it's been about 11 months since her passing, and as you mentioned, I've already completed the rollover into my 401K. I feel like I should have researched this better before making the initial decision, but I was dealing with a lot emotionally and just followed what the HR person at her company suggested.

That's understandable - these decisions often need to be made during difficult emotional times. Since the disclaimer option is no longer available, your best approach now is probably a combination strategy: First, designate her brother as the beneficiary for that portion of your 401K, ensuring he'll receive it if something happens to you. Then, work out a yearly gifting strategy once you're eligible for qualified distributions without penalties. You might also consult with an attorney about creating a simple agreement documenting your intentions, which could help clarify things for your own estate planning. Don't be too hard on yourself - you're trying to do the right thing in a system that doesn't make it easy.

This is actually not great advice. 401K loans become immediately due if you leave your job, and since OP is living overseas, that could be risky. Plus, if you can't repay the loan, it becomes a distribution with all the taxes and penalties. The gift tax concerns would still apply too.