That's a really important point about the deadline - thank you! I'll make sure to get this done well before tax time. Does the custodian typically send some kind of confirmation document that I'll need for my tax return?

Yes, your custodian should provide you with a statement showing the recharacterization. You'll need this for your records, though it's not something you attach to your return. The custodian will also send you a Form 5498 showing the recharacterized contribution to the Traditional IRA, and you'll likely see the reversed Roth contribution on your Form 5498 for the Roth IRA. For your tax return, you'll need to fill out Form 8606 to report the nondeductible Traditional IRA contribution and any conversion you do. Keep all the paperwork from your custodian with your tax records in case of questions later.

How much was the 6% penalty on your contribution? I'm wondering if it might be simpler to just pay it rather than doing all this recharacterization stuff. I'm only slightly over the income limit.

Do students ever qualify for any special moving deductions or credits? I'm planning to move for my first job after graduation and wondering if I can deduct anything.

Unfortunately, moving expenses are no longer deductible for most people since the 2017 tax law changes. The only exception is for active-duty military members moving due to military orders. As a student starting your first job after graduation, you likely won't have any federal tax deductions for moving expenses. However, some states still allow moving expense deductions on their state returns. Also, if your new employer provides any relocation assistance, that's typically taxable income, but sometimes employers will "gross up" the payment to cover the tax impact.

FreeTaxUSA doesn't handle everything correctly tho. My gf used it last year and it messed up her education credits. She had to file an amendment. Sometimes paying more for a professional is worth it if they catch things software might miss.

I did pay my TurboTax fees upfront with my credit card, so that shouldn't be affecting my refund amount. My tax transcript specifically shows the full amount of $3,892 as the intended refund. This is so frustrating!

In that case, definitely sounds like an offset or calculation issue. One thing I've noticed is that sometimes the "Where's My Refund" tool and the transcript show different amounts. Have you checked the Where's My Refund tool on the IRS website to see if it shows a different expected amount than your transcript?

Not always an offset though. Sometimes it's a math error correction (MEC) which would show different codes like 29X series. I work in tax prep and see this pretty often - IRS recalculates something on the return and adjusts the refund but the notice explaining why comes weeks later.

Can you explain more about the trust option? Wouldn't that defeat the purpose of giving the girlfriend financial independence if the money is tied up in a trust for the kids?

You're right that a trust solely for the children wouldn't address the goal of financial independence for the girlfriend. What my attorney suggested (and what we ended up doing) was a combination approach: a direct gift to my partner for her immediate financial security, plus a separate family trust where she was both a beneficiary and a trustee. This had several advantages: it reduced the immediate gift tax implications by splitting the amounts, it provided structured financial security for both her and our children, and it created an additional layer of documentation showing the personal nature of these financial arrangements. The trust paperwork explicitly referenced our family relationship, which further reinforced that these were personal financial planning decisions rather than business compensation.

Bad idea. The IRS would absolutely flag that as suspicious. Going from $50K to suddenly hundreds of thousands in "contractor fees" would trigger an audit instantly. Plus, even if it was legitimate, she'd have to pay self-employment tax on all of that, which is around 15%. That's a huge tax hit compared to receiving it as a gift.

I've heard about trading LLCs but wasn't sure if my volume would qualify. I do about 3-5 trades per week, mostly multi-leg options strategies. Would that be enough activity to potentially qualify for trader status? And what kinds of expenses could I deduct if I went this route?

Based on 3-5 trades per week, you might be borderline for trader tax status. The IRS looks for substantial activity (often daily), seeking income from the activity's price swings rather than dividends/interest, and a significant amount of time dedicated to it. Multi-leg options strategies do show sophistication, which helps. If you qualify, you could potentially deduct home office expenses, computer equipment, trading platform subscriptions, investment research materials, education related to trading, and even a portion of your internet and phone bills. These would be business deductions rather than investment expenses, which makes a big difference tax-wise.

I looked into QOZs for my options profits last year. The deferral is nice but remember you're locking up capital in often speculative development projects. Most require $50k+ minimums and 7-10 year commitments. The funds also have high fees. Just make sure you're not making a bad investment just to save on taxes.