That's interesting! So are you saying the IRS doesn't strictly apply the $1,470 monthly limit that the SSA uses? My daughter has Down syndrome and occasionally works more hours for special events, but we still provide over 90% of her support.

That's right - while the IRS and SSA both use the term "substantial gainful activity," the IRS focuses more on the overall support situation rather than rigidly applying the monthly earnings limit. If you're providing 90% of your daughter's support, you're well within the requirements to claim her as a dependent. The key test for the IRS is whether you provide more than half of your dependent's total support for the year. The SGA question becomes more relevant if they're earning enough that they might be supporting themselves. Even with occasional higher earnings for special events, it sounds like your situation clearly meets the support test.

There are different SGA thresholds for blind individuals versus non-blind individuals with disabilities. In 2023, the threshold was $2,460 per month for blind individuals and $1,470 for non-blind. Doesn't matter what type of disability otherwise - physical, cognitive, etc all fall under the same threshold as long as they're not blind.

Do these ghost preparers ever get caught? Seems like they're scamming a lot of people and the IRS should be all over this.

Yes, the IRS does prosecute these preparers when they catch them, but it's challenging because many operate informally through social media and don't leave much of a paper trail. They often use temporary contact information, prepaid phones, and don't properly sign returns as preparers. The IRS has been conducting a nationwide crackdown on fraudulent preparers, with some high-profile prosecutions resulting in prison time and heavy fines. However, they can't catch everyone, which is why they focus on educating taxpayers about the risks. Remember, even if a preparer completes your return, YOU are legally responsible for all information on it and any resulting penalties.

That's true, but most people making $78K like OP wouldn't qualify for EITC, right? I think there's an income limit that's much lower.

Thanks for mentioning this. We actually don't have kids yet, so I'm not sure if we'd qualify for the EITC. And honestly, I don't think either of us updated our W-4s after getting married - I didn't even know that was a thing we needed to do. Would fixing that help us for this year's taxes or just for next year?

You can still qualify for EITC without children, though the amount is smaller. It depends on your income level - for 2023 taxes, married couples filing jointly with no qualifying children can get EITC if their income is below about $24,210. Regarding the W-4 adjustments, unfortunately that would only help you for future tax years, not for the return you've already filed. But you should definitely both submit new W-4 forms to your employers right away to prevent this problem next year. When both spouses work, you often need to withhold at a higher rate than single filers to account for your combined income pushing you into higher tax brackets. The IRS has a Tax Withholding Estimator tool on their website that can help you fill out your W-4 correctly.

This is generally bad advice for most people. MFS rarely results in tax savings and actually disqualifies you from several tax benefits like education credits, child care credits, and earned income credit. It's usually only beneficial in very specific situations like when one spouse has income-based student loan payments or massive medical expenses.

Thanks for pointing this out! My income was definitely below those limits in 2021 (around $65k) so I was eligible for the full contribution. I think I might have been confused about how much I actually contributed - just double checked and it was exactly $6k, not $8k like I initially wrote. My memory isn't what it used to be lol. If I'm understanding everyone correctly, since the Roth contribution doesn't affect my tax liability and my income was too high for the Saver's Credit but below the Roth income limits, there's really no benefit to amending my return. Does that sound right?

That's exactly right. If your contribution was $6k (within the limit), your income was below the Roth IRA income thresholds but above the Saver's Credit limit, there's really no reason to amend your return. The IRS already has the information from the Form 5498 that your financial institution filed, and since Roth contributions don't impact your tax liability, you're good to go. One less thing to worry about!

Can you explain what a "backdoor Roth conversion" is? I keep hearing about it but don't really understand the concept or why it matters for record keeping.

This is super important! I messed this up my first year and both me and my parents got letters from the IRS because we had conflicting filings. Such a headache to fix.

I hadn't even thought about state taxes! I'm in Texas - do you know if they have state income tax here?

You're actually in luck! Texas is one of the few states with no state income tax, so you don't need to worry about filing a state return. Just the federal one. That makes things much simpler for you! If you ever move to another state though, definitely check their specific requirements. States like California, New York, and many others have their own income taxes with different thresholds and rules.