Do you think there's value in going back to the same preparer each year? Or should I shop around for the best price annually?

There's definitely value in building a relationship with the same preparer over time. They learn your specific situation and can provide more tailored advice as they get to know your financial patterns. They'll also notice changes year-to-year that might indicate new tax opportunities. Shopping based on price alone can backfire. The cheapest preparers are often the least experienced or may rush through returns during busy season. If you find someone who does quality work and you're comfortable with them, the continuity is usually worth any small premium you might pay compared to shopping around.

Not everyone is confident doing their own taxes, especially with self-employment income. I tried doing my own and missed a huge home office deduction that my preparer caught the next year. Sometimes paying a professional saves you more than their fee.

This is super important! My brother and I both inherited annuities from our mom, but his was qualified (inside an IRA) and mine was non-qualified. We had COMPLETELY different tax situations and options. The qualified annuity had never been taxed yet, while the non-qualified one had already had some taxes paid.

You're absolutely right about the qualified vs non-qualified distinction. That's a crucial factor I should have mentioned. Qualified annuities (inside IRAs or 401ks) have never been taxed before, so all distributions are generally fully taxable as ordinary income. Non-qualified annuities (purchased with after-tax dollars) will only have their earnings portion taxed, not the original investment amount that's considered the "basis.

Yes, you can disclaim an inheritance including an annuity! My financial advisor had me do this with an inherited annuity from my grandmother. You need to: 1) Not accept any benefits from it 2) Provide written refusal within 9 months of the death 3) Not direct who gets it next (it follows the contingent beneficiary designations) Made a huge difference for my family tax-wise.

Generally, the custodial parent (who the kids live with more than 50% of the time) gets to claim the child tax credit. In your case, that would be your wife since they're with her during the week. However, she can release the claim to you using Form 8332 if you both agree to that arrangement.

How do you apply for that First Time Penalty Abatement thing? Is it automatic or do you have to specifically request it? And what counts as "good compliance history"?

You need to specifically request First Time Penalty Abatement - it's not automatic. You can do this after you file the late return and receive a bill. Call the IRS using the number on your bill and specifically ask for "First Time Penalty Abatement" for your 2019 taxes. For "good compliance history," the IRS generally looks for no penalties in the prior three years and that you've filed all required returns and paid (or arranged to pay) any tax due. So if you didn't have issues with 2016, 2017, and 2018 taxes, you might qualify. Even if you're not sure you qualify, it's worth asking - the worst they can say is no.

I'm not OP, but I had a similar situation with unfiled 2018 taxes, and the IRS didn't contact me until almost 3 years later. With COVID, they got super backlogged. When they finally did reach out, the penalties had piled up like crazy.

This is actually addressed in IRS Publication 503. If you're divorced and sharing expenses, you can only claim expenses for qualifying persons (dependents). So if you're claiming 1 child and your ex is claiming 2, you can only claim the expenses you paid for your 1 dependent child.

Thanks for pointing me to Publication 503. I just looked it up and you're right - it clearly states I can only claim expenses for qualifying persons. Feels frustrating to be paying for childcare that I can't get any tax benefit for, but at least I know the correct way to file now.