This was definitely a purchase, not a refinance. But your comment about spreading the deduction over the loan term made me wonder - if points for a refinance are spread over the loan term, is there any scenario where points for a purchase could be treated similarly?

For a home purchase, points are generally fully deductible in the year paid, assuming they meet the IRS criteria (which most standard mortgage situations do). There's no option to voluntarily spread them over the loan term like with a refinance. The only scenario where purchase points would be spread over the loan term is if they fail to meet the IRS criteria for immediate deduction - like if they're unusually high for your area or if the property isn't your primary residence. But from what you've described about your standard mortgage on your primary home, those exceptions wouldn't apply to you.

Is there any advantage to amending your 2022 return to itemize instead of taking the standard deduction? Or would the math still work out the same?

Thanks for sharing your experience! Did you have any issues with the IRS contacting you after you both claimed the same children? How long did the whole process take to get resolved?

Yes, both of us received letters from the IRS about 3 months after filing. They requested additional documentation from each of us to prove our claims. I sent in my custody calendar, school records showing my address, and medical receipts showing I was the one taking them to appointments. The whole process took about 6 months to resolve completely. My refund was held until the determination was made, which was frustrating, but in the end they ruled in my favor since I had the kids more nights of the year. Be prepared for the delay if you go this route - it's not quick, but the IRS does eventually sort it out.

Wait I thought the Child Tax Credit was $2,000 in previous years but was INCREASED to $3,000 (or $3,600 for kids under 6) for 2025? Did I miss something? That's a big difference!

Good point about checking the mail more thoroughly. I'll ask her mom to look through her papers again. Do you know if filing an extension is complicated? We've never done that before and I'm worried about messing something else up.

Filing an extension is actually very simple. You just need to submit Form 4868 which you can do electronically through most tax software or the IRS Free File. It automatically gives you until October 15th to file your complete return. The tricky part is estimating any taxes you might owe, since you'll still need to pay by the regular April deadline to avoid penalties and interest. Since your issue is just missing a form rather than not knowing what you owe, you could complete your return as best you can to estimate your tax liability, then pay that amount when filing the extension.

This is exactly right. I work with tax issues, and this marketplace coverage reporting requirement trips up so many people. The system is designed to track premium tax credits at both the subscriber level (mom) and the covered individual level (wife) across returns.

Would love to see your spreadsheet! I'm just starting the process and feeling overwhelmed by all the calculations.

For most businesses, you can amend payroll tax returns (Form 941-X) up to 3 years after the original filing date. So for 2020 Q2, if you filed on July 31, 2020, you have until July 31, 2023 to amend. For 2021 Q3 (the last eligible quarter), most businesses will have until October/November 2024 to file claims. The IRS did implement a moratorium on processing new claims from September 2023 to early 2024 due to fraud concerns, but they're processing claims again now. Just be aware that processing times are extremely long - currently 10-12 months is common.

Do you know if you can request the first-time penalty abatement when you file the late return, or do you have to wait until after they assess the penalties?

You typically need to wait until after the IRS assesses the penalties before requesting first-time penalty abatement. So you'd file your late return, receive a notice from the IRS about penalties, and then call them to request the abatement. When you call, specifically ask for "first-time penalty abatement" and explain that you have a clean compliance history for the previous three years. They'll check your records, and if you qualify, they can often approve it during that same call. It's definitely worth doing - the penalties can add up quickly on late returns!

Are you sure about that? I thought the IRS requires you to file regardless of whether you're getting a refund or not. I've always heard not filing is illegal even if you don't owe anything.