One of my kids did work a summer job and made about $3,800 last year. How would that change things? Should they file their own return? Would I still claim them as a dependent?

Yes, your child should definitely file their own return for that summer job income. The good news is that you can still claim them as a dependent on your return as long as you provided more than half of their support for the year and they meet the other dependent tests. When they file their own return, they'll check the box indicating "Someone can claim you as a dependent." This is actually beneficial because while you still get whatever dependent benefits you qualify for, they may get some of their withholding back if too much was taken from their paychecks. It's not a major tax strategy that will eliminate your $2500 liability, but every bit helps, and it's teaching them about tax responsibility too.

With mortgage interest of $9,200 and property taxes of $4,500, you're at $13,700 just from those two items. Add in state income taxes (up to the SALT limit) and any charitable contributions, and you might exceed the standard deduction ($13,850 for single filers, $20,800 for head of household in 2023). Run the numbers both ways to see which gives you the better result. But remember, even if itemizing only saves you a few hundred dollars over the standard deduction, that's still money in your pocket.

Thanks for pointing this out! So if I understand correctly, my 2023 contribution ($6,500) plus my 2024 contribution ($7,000) gives me a total basis of $13,500, which matches lines 3 and 5 on my Form 8606. But I only converted $7,204, leaving $6,296 as my remaining basis (line 14). Does that mean none of my conversion should be taxable? That doesn't seem right if I had earnings.

Your understanding is partially correct, but there's a key distinction. When you convert from traditional to Roth, the IRS looks at the proportion of your basis to the total value across ALL your traditional IRAs, not just the one you're converting from. If you converted $7,204, and your total basis across all traditional IRAs was $13,500, then the taxable portion would be calculated using the ratio of non-deductible contributions to total IRA balances. However, if the $7,204 includes $704 of earnings on the original $6,500 contribution, those earnings should be taxable. The fact that line 4b on your 1040 is showing "rollover" but no amount suggests the software isn't calculating this correctly. You may need to manually enter the taxable amount there.

I use TurboTax every year for my backdoor Roth. The trick is to enter the 1099-R first, THEN enter Form 8606 information. If you do it the other way around, it sometimes miscalculates the taxable amount. Also, make sure you're entering your prior year non-deductible contributions correctly on line 2 of Form 8606.

The guy is just some local tax preparer - not a CPA or EA as far as I know. He was recommended by a friend who said he "gets great refunds for everyone." Should have been a red flag right there! Do I still use those same forms to report him even if he's not credentialed?

Yes, absolutely use those same forms even though he's not credentialed. The IRS needs to know about all tax preparers who engage in misconduct, regardless of their credentials. Form 14157 is specifically designed to report any tax preparer who violates tax laws or engages in unethical practices. The fact he's known for "getting great refunds for everyone" is definitely concerning and suggests a pattern of improper deductions. Make sure you mention that in your report, as it indicates this may not be an isolated incident. The IRS may look into his other clients' returns if they suspect a pattern of fraudulent activity.

Wait the IRS actually called your brother? I thought they only communicate through mail. Was it legit? I always heard to be super careful about scam calls claiming to be the IRS.

I managed to get through last month but only by calling at exactly 7:00 AM Eastern when they first open. Even then I waited for 1.5 hours on hold. Tuesdays and Thursdays seem to be slightly better than Mondays from my experience.

Thanks for the tip. I'll try calling right when they open on Thursday. Did you end up resolving your issue when you finally got through? I'm still debating whether it's worth the hassle for a small amount or if I should just pay it.

Does the electronic version work the same for filing? My tax guy always wants the "official" form and I'm worried the electronic one won't count.

The electronic version is exactly the same as the paper one for tax filing purposes - it contains all the same information and is considered an "official" form by the IRS. Your tax preparer can use it just like the paper version. I actually find the electronic ones better because there's no risk of faded print that scanners can't read properly. Plus you can download it as a PDF and keep it stored safely without worrying about losing the physical copy. Just make sure you save it somewhere secure since it has your Social Security number on it.

Last year mine had the wrong state tax withholding amount. Double check all the numbers against your final paystub of the year! Box 1 (wages) and Box 2 (federal tax withheld) are the most important to verify. If there's a mistake, contact HR immediately for a corrected W-2.