Thanks for the suggestion, but unfortunately it's not that simple in our case. My brother has a multi-car discount policy that would be significantly more expensive if we split it up. Also, his driving record is better than mine, so our total costs would increase by about $780/year if I got my own policy. That's why we've kept this arrangement going. I'm wondering if there's a way to make it work tax-wise without actually changing the policy.

That makes sense about the multi-car discount. In that case, I'd suggest creating a formal agreement between you and your brother. Have him "bill" you for the insurance with a simple invoice each month, and pay him by check or electronic transfer that clearly states "vehicle insurance" in the memo/notes. Keep these records organized. This creates a paper trail showing you're paying for a legitimate business expense. On your Schedule C, you'd list it as "vehicle insurance" under car expenses. Just be aware you can only deduct the percentage used for business - if you use the car 60% for business and 40% personal, you can only deduct 60% of what you pay.

This is the correct answer. The "substance over form" doctrine is exactly what the IRS would apply here. It doesn't matter whose bank account the payment comes from - it matters who is the economic payer. If brother gives cash first, then brother is the economic payer.

Thank you so much for explaining! That really helps ease my mind. One more question - will this form stay on file forever at the bank or is it just a temporary thing for the SSN correction?

We keep W-9 forms on file for the life of your account, but it's just part of your account documentation. It doesn't get sent to the IRS or anything - we only use it if there's ever a question about your tax ID or if we need to issue a 1099 form (which would only happen if you earned significant interest on your account). It's really just paperwork to make sure we have your correct information. Nothing to worry about at all!

Technically that interest is taxable income, but if your total income is below the filing threshold (currently $13,850 for single filers), you don't need to file a tax return at all. Banks only send 1099-INT forms when interest exceeds $10 in a year anyway. With just $2 in interest, you won't receive any tax forms, and there's no need to file just to report that tiny amount if you're otherwise below the filing threshold.

I didn't even think to call my 401k administrator! That's a great idea. My plan does mention hardship withdrawals for medical expenses in the documentation, but when I requested the distribution I just did it through their online portal and didn't specify the reason. I'll definitely give them a call tomorrow and see if they can issue a corrected form with code 2. Would that completely eliminate the need to file Form 5329, or would I still need to do that?

If they can issue a corrected 1099-R with code 2 (which indicates an exception applies), you won't need to file Form 5329 at all to claim the exception. The code 2 tells the IRS that the distribution already qualifies for an exception to the 10% penalty. This would make your e-filing much simpler since you wouldn't have to deal with the additional form. Just make sure to wait for the corrected 1099-R before filing if they agree to issue one.

The health insurance premium exception is super helpful! I used it last year when I had to take an early distribution during a period of unemployment. You need to make sure you meet all the criteria though - you must have received unemployment compensation for 12 consecutive weeks.

That's a good point about the 12 consecutive weeks requirement. There are also some timing requirements - the distribution must be taken in the year you received unemployment compensation or the following year. And if you've been reemployed for more than 60 days, you no longer qualify for this exception.

Which tax software did you find handles dividend reinvestments the best? I've been using FreeTaxUSA but wondering if one of the paid ones might be better for handling investments.

The core treatment of reinvested dividends hasn't changed for 2025. However, there are some reporting changes that brokerages need to follow that might make your 1099-DIV look slightly different. The basis reporting requirements have been enhanced to provide more detail, but this is mostly a change for the brokerages, not for taxpayers. You'll still report dividends received in 2024 on your 2025 tax return the same way as before.

Did you ever call the IRS or do anything special to get it moving? Or did it just suddenly update on its own?

It just updated on its own. I checked the "Where's My Refund" tool religiously every morning and one day it finally showed a deposit date. I never called or did anything special to move things along. I've heard from friends that calling doesn't usually speed things up anyway - they just tell you to keep waiting unless there's an actual issue with your return that needs to be addressed. So unless you think there might be a specific problem, it seems like waiting is unfortunately the only option.

I've noticed something similar! My husband and I filed separately (complicated situation) but on the same day. He got his refund after 3 weeks (no kids/CTC on his return) and mine took 6 weeks (claiming our daughter and the CTC). Definitely seems like these get sorted into different processing queues.