Thank you for mentioning the Head of Household status! We hadn't considered that. Do you know if my partner would need any specific documentation to prove he's been supporting my oldest? We don't have formal custody arrangements since the biological father isn't in the picture at all.

You don't need formal custody arrangements in this case since there's no other person claiming the child. The key is being able to show that your partner maintained the household and supported the child if ever questioned. It's good practice to keep records showing your partner paid household expenses (rent/mortgage receipts, utility bills in their name) and child-specific expenses (school records, medical bills, childcare receipts). Also helpful are any documents showing the child's address matches yours (school records, medical records). The IRS doesn't require you to submit these with your return, but they're good to have if you're ever audited or questioned.

The EITC is huge! But be really careful with the rules there. When I claimed my niece who lived with me, I messed up some paperwork and got audited. Took forever to resolve. Make sure every detail is perfect on that one.

Thanks for sharing your experience! Did you respond to everything by mail or did you have the option to upload documents electronically? I'm curious about how the process actually works.

They initially contacted me by mail with a request for the documentation, but I was able to create an account on their examination portal and upload all my documents electronically. It was actually pretty straightforward - I scanned everything, created a single PDF, and uploaded it with a cover letter explaining each item. They did have questions about two of my documents which required a follow-up phone call, but overall the process was less painful than I expected. Just make sure you respond within their deadlines and keep copies of absolutely everything you send them. The digital option definitely sped things up compared to mailing everything.

I had the exact opposite experience. IRS increased my NIIT by $1200 and when I got audited, they found they had made the mistake. Took forever to get resolved tho. Like 8 months of back and forth.

That's a really smart idea I hadn't thought of! I just checked our business account online and can see the check was deposited at First National Bank, but I'm not seeing any account details. Is there something specific I should ask our bank for to get more information?

You'd want to contact your bank and ask for the "deposit information" from the cleared check. Sometimes they can provide the routing and account number where it was deposited. Not all banks will share this, but many business accounts give you access to this information. Once you have that, you still won't have their TIN, but you'll have more documentation to show the IRS that this was indeed a real vendor who received payment. The bank info combined with their name, email and phone gives you a stronger paper trail.

This is good advice. Also mention that if they refuse to provide a W-9, you're required to do backup withholding at 24% of any FUTURE payments and report them to the IRS. Even though you can't do that for past payments, just knowing you're aware of the requirements might make them reconsider.

Ah crap I didn't even think about self-employment tax! The side gig was graphic design work I did for a local business. They just needed some logos and paid me directly, no tax withholding. So I'm guessing that would count as self-employment? Does that mean I need to file some additional form besides just the 1040-X?

Yes, you'll definitely need to pay self-employment tax on that income. Since it's over $400, you're required to pay the 15.3% SE tax. You'll need to include Schedule SE with your amended return to calculate the self-employment tax, along with Schedule C to report the business income and any related expenses. This is where you might find some deductions to offset the income - did you use your own computer, software, or have any other expenses related to the graphic design work? Those can be deductible business expenses on Schedule C.

The IRS says 16 weeks is currently the normal processing time for amended returns, but mine took almost 6 months last year! The "Where's My Amended Return" tool on IRS.gov was completely useless too - just kept saying "processing" the entire time.

Six months?? That's insane! I was hoping to use my refund for summer tuition. Guess I better make other plans. Thanks for letting me know though - at least I won't be anxiously checking every day now.

Yes! This happened to me too. They coded mine as a "7" (I'm over 59.5) even though it was definitely a rollover. My tax guy said the important thing is to mark it as a rollover when entering it into tax software. He said the IRS reconciles this with the 5498 form your receiving institution files showing the money went into another IRA.

Thanks for confirming! That makes me feel better. I didn't realize the receiving institution files a Form 5498 that the IRS can match to my rollover. That makes sense that there would be a paper trail on both ends. I've been keeping all my documentation just in case, but it's good to know there's an additional safeguard in the system.

Oof, that's a really good point. I had the same issue with a 401k rollover (not an IRA). Had to scramble to find extra cash to make up the withheld amount. Then had to wait for the tax refund the following year to get that withheld money back.