2 Can you explain how that works? I thought you couldn't "carry forward" Roth contributions like that?

18 You're right that you can't exactly "carry forward" Roth contributions in the traditional sense, but if you're eligible to contribute in the current year, you can apply excess contributions from a prior year to the current year instead of withdrawing them. For example, if you made an excess contribution in 2021, and you're eligible to contribute to a Roth in 2023 but haven't maxed it out yet, you can apply some or all of that 2021 excess amount toward your 2023 contribution limit. You'd still owe the 6% penalty for 2021 and 2022 (if you didn't fix it before the 2022 deadline), but you'd avoid the penalty for 2023 and beyond without having to withdraw funds.

6 I believe the 6% penalty continues indefinitely until you fix the excess contribution, but I'm not sure if there's a point where the IRS won't let you fix it anymore.

That's a great point I hadn't thought about! I just double checked and thankfully mine shows coverage for all 12 months for both me and my kids. But what would have happened if there was a mistake and you'd already filed? Would you have needed to amend your return?

If you'd already filed and later discovered an error on your 1095-B, you typically wouldn't need to amend your return in most cases. Since 2019, when the tax penalty for not having health insurance was reduced to $0 at the federal level, there's generally no direct tax impact. However, it's still important to get the form corrected by contacting Medicaid, as having accurate records of your health insurance coverage can be important for other reasons, including potential state requirements or if questions come up later about your coverage history.

You don't need to submit either form with your tax return. Both the 1095-B (from Medicaid) and 1095-C (from your employer's insurance) are informational forms for your records. You do need to accurately answer the health insurance coverage questions in your tax software, indicating that you had coverage all year through a combination of employer insurance and Medicaid. The forms themselves don't get submitted - they're just proof of your coverage if you're ever asked about it.

Thank you! That makes it so much clearer. I was driving myself crazy thinking I needed to enter all the policy numbers and dates from both forms. Such a relief to know I just need to indicate I had coverage all year and keep these forms in my records.

This finally makes sense! So basically I can't get both benefits on the same dollars - either the money is tax-free OR I can use it for LLC but not both. Would it be possible to split my qualified expenses? Like use $8,000 for tax-free fellowship treatment and the remaining $5,500 for the LLC calculation?

Exactly! You can absolutely split your qualified expenses to optimize your tax situation. You could allocate $8,000 of your qualified expenses to make that portion of your fellowship tax-free, and then use the remaining $5,500 toward calculating your Lifetime Learning Credit. With the LLC giving you a credit of 20% of your qualified expenses, that $5,500 would generate a $1,100 tax credit. You'd need to calculate whether this approach saves you more than making all $13,500 of your fellowship tax-free. It depends on your tax bracket, but credits are generally more valuable than exclusions from income.

I used TaxSlayer last year with a research fellowship and Lifetime Learning Credit. It worked fine but you have to be careful about how you enter the fellowship income. If you received a W-2, enter it as wages. If no W-2, you need to report it as "Other Income" and then separately indicate how much was for qualified expenses. For the LLC, make sure you're only claiming expenses that weren't already covered by tax-free scholarship/fellowship funds. TaxSlayer has a decent education credits section but doesn't always make this distinction super clear.

Wouldn't this definitely cause problems with OP staying in the industry though? The DOL investigation would name them specifically right? Unlike the IRS where there's at least some level of confidentiality?

You're right that there's less anonymity with a state labor board complaint. They typically inform the employer who filed the complaint during the investigation process. That said, there are strong anti-retaliation laws that make it illegal for your former employer to badmouth you in the industry or interfere with future employment. Whether this causes industry problems really depends on your specific situation - how vindictive your former employer might be, how large the industry is in your area, and how much power they have within it. It's definitely something to weigh carefully based on your individual circumstances and tolerance for potential conflict.

I did try talking to her about it while I was still working there. She blamed her accountant for all the mistakes but never actually fixed anything. When I brought it up again after getting my W2 and seeing all the problems, she got defensive and basically said her books were correct and I must be mistaken. That's when she cut my pay citing "tax errors" that needed to be "corrected" going forward. I've been hesitant to reach out again since quitting because our last conversations were pretty tense. But maybe a formal letter outlining the issues with copies of the checks would be worth trying before filing anything official?

A formal letter is definitely worth trying. Make it professional, not accusatory, and focus on the factual discrepancies with your documentation attached. Suggest that you're hoping to resolve this directly before having to involve tax authorities. Send it certified mail so you have proof she received it. Give a reasonable timeframe for response (like 14 days). This approach gives her one last chance to correct things, and if she doesn't respond, you've created additional documentation of your good-faith efforts to resolve the situation before filing official complaints. That paper trail of attempting resolution can be beneficial if you do need to escalate things.

That's a really good point I hadn't considered. I'm in Texas so I don't have state income tax, but I did live in California for part of 2020 before moving. Does that mean I need to file a partial year California return for that period?

Yes, you would need to file a part-year resident California return for 2020. California is particularly aggressive with non-filers and has a longer statute of limitations than the IRS for certain things. Since you sold property during that period, California will be especially interested in whether any capital gains tax is due to them. When you file as a part-year resident, you'll only pay California tax on income earned while living there, plus any California-source income (like rental income from California property) earned after you moved. Given the housing market in 2020, there might be significant tax implications depending on how long you owned the California property.

You can use TurboTax for prior years, but you'll need to buy the desktop software for each specific tax year you need to file - the online version only works for current year. And if your situation includes property sales or complex investments, you'll definitely need the premium versions.