One thing nobody mentioned is that if you don't claim your child as a dependent, they might be eligible for a much bigger stimulus payment or recovery rebate credit (depending on what Congress passes next year). During the pandemic years, my son got $1,800 filing independently that he wouldn't have received if I had claimed him. Worth considering!

This is exactly the kind of analysis every parent with college kids should be doing! You're absolutely right to question whether claiming her makes sense financially for your family as a whole. Based on what you've described, you need to factor in the education tax credits that others have mentioned. The American Opportunity Tax Credit alone could be worth up to $2,500 if your daughter has qualified education expenses, which would completely change your calculation. That $2,500 credit minus the $500 you'd lose by not getting the full Child Tax Credit still puts you way ahead of the $1,000 she'd save filing independently. Also consider that at your income level, you're probably getting more benefit from the education credits than she would filing on her own, since you likely have higher tax liability to offset. The key is running both scenarios with ALL applicable credits and deductions included - not just looking at the Child Tax Credit in isolation. I'd recommend using tax software to model both approaches or consulting with a tax professional who can run the numbers properly. The difference could easily be $1,000+ in either direction depending on your specific situation.

Just chiming in to add my experience as someone who didn't file for 5 years (2016-2020) and finally caught up last year. The biggest surprise was that I was actually OWED money for 3 of those 5 years because I had too much withheld from my paychecks! Unfortunately I could only get refunds for 2020 since the others were outside the 3-year window, but I was relieved there were no penalties since I was due refunds. The peace of mind from being caught up is worth it even though I lost out on some refund money. Whether you should file really depends on if you had taxes withheld that were more than what you would have owed. If you were a W-2 employee with normal withholding, there's a decent chance you're owed money rather than owing the IRS.

Gabriel, I can definitely understand your stress about this! From what you've shared, you're actually in a pretty good position since you've gotten current with 2021-2023. Here's my take on your specific situation: Since you're primarily concerned about FAFSA eligibility for January, you should be fine. FAFSA typically uses the "prior-prior year" tax information, so for starting school in January 2025, they'll likely want your 2023 return (which you have filed). However, I'd still lean toward filing those back years (2017-2020) for a few reasons: 1. You mentioned wanting peace of mind - unfiled returns can create anxiety that lingers 2. If you were a W-2 employee during those years, there's a decent chance you're owed refunds (especially for 2020, which you might still be able to claim) 3. It eliminates any future complications if you need tax transcripts for loans, employment background checks, or other purposes Before spending money on a tax preparer though, I'd suggest trying to figure out if you were even required to file for those years. If your income was below the filing threshold for any of those years, you wouldn't need to file at all. You can check the IRS website for historical filing thresholds by year. The fact that your current tax preparer seemed confused suggests he might not specialize in back tax situations - you might want to consult with someone who has more experience with unfiled returns to get a clearer picture of your obligations and potential refunds.

Can someone explain the difference between SSAR and standard RSUs? My company offers both and I'm trying to understand the tax implications before my first shares vest next month.

I'm dealing with a similar situation and wanted to share what I learned from my tax preparer. The key thing to remember is that RSUs and SSARs are handled differently for tax purposes, but both should already be included in your Box 1 wages. For your specific situation with the $7,500 SSAR sale, you absolutely need to find the original exercise documentation to determine your cost basis. This is critical because without it, you might end up paying taxes twice - once when the SSARs were exercised (already included in a previous year's W2) and again when you report the sale. A few places to check for this information: 1. Your company's equity portal (Fidelity NetBenefits, E*TRADE, etc.) 2. Email confirmations from when you exercised the SSARs 3. Previous year tax documents if you exercised them recently 4. Contact your HR department - they should have records of all equity transactions Don't guess at the cost basis or leave it blank on Form 8949. The IRS will assume zero basis if you don't provide it, which could result in paying tax on the full $7,500 sale amount even though you already paid income tax when the SSARs were exercised.

This is a really interesting case that highlights how family arrangements have evolved! I went through something similar when my adult nephew moved into our guest house with his daughter after his divorce. The IRS Publication 501 specifically addresses this - what matters is whether you're maintaining separate households economically, not whether you share the same street address. Since your ex-SIL has his own bank account, pays for his children's expenses independently, and contributes to household costs through services (childcare and maintenance), he's essentially operating as a separate economic unit. One tip from my experience: I'd suggest documenting the fair market value of the childcare services he provides. In our area, quality after-school care runs about $15-20/hour. If he's watching your kids even 10 hours a week, that's $600-800/month in equivalent rent. Combined with his direct expenses for his kids, he's likely well over the "more than half" threshold for household support. The key is being able to show the IRS that despite sharing a roof, you're running two distinct households with separate finances and responsibilities. Keep good records and you should both be fine filing HOH!

I'm dealing with a very similar situation right now! My brother and his teenage son moved into our converted garage apartment after his job relocation, and we've been wondering about the same HOH question. What really helped me understand this better was looking at IRS Publication 501, which explains that the "household" test isn't about the physical structure but about whether you're maintaining separate economic units. The fact that your ex-SIL pays for his kids' expenses, has separate accounts, and contributes equivalent value through childcare and maintenance really strengthens his case for HOH status. One thing I learned from my research is that the IRS has actually ruled favorably in several cases where family members shared addresses but maintained separate households. As long as you can document that he's covering more than half the cost of supporting his "household" (including the fair market value of his service contributions), you should both be fine filing as HOH. The key is just making sure you both have good documentation - receipts for his kids' expenses, some record of the childcare hours he provides, and maybe a simple written acknowledgment of your arrangement. From everything I've read and researched, sharing an address while maintaining separate economic households is completely legitimate for HOH purposes.

This is a really common confusion! The key thing to understand is that the W-4 is about withholding the right amount of taxes from your paychecks throughout the year, not about who gets to "claim" your child on your actual tax return. Since you're married filing jointly, you'll both benefit from having your daughter as a dependent when you file your return regardless of your W-4 setup. However, if you both put your child's credit amount ($2,000) in Step 3 of your W-4s, you'd be telling your employers to withhold $4,000 less in taxes combined - but you're only entitled to one $2,000 child tax credit. This would likely result in underwithholding and you'd owe money at tax time. The best approach is to coordinate your W-4s. Since you both make similar incomes (~$58k each), you could either have one of you claim the full $2,000 child tax credit and the other claim zero, or you could each claim $1,000. I'd recommend using the IRS Tax Withholding Estimator at irs.gov to run the numbers and see what works best for your specific situation. Don't worry - this trips up a lot of couples! The important thing is making sure your combined withholding matches your actual tax liability.

Great question! This is exactly the kind of confusion that trips up many married couples filing jointly. The short answer is: you should NOT both claim your daughter on your separate W-4 forms. Here's why: When you both claim the same child on your W-4s, you're essentially telling both of your employers to withhold less tax from your paychecks because you each expect to receive the $2,000 child tax credit. But since you're filing jointly, you'll only receive ONE $2,000 credit for your daughter - not two. This means you'll have underwitheld taxes throughout the year and likely owe a significant amount when you file. With your similar incomes ($58k each), I'd recommend one of these approaches: 1. One spouse claims the full $2,000 child tax credit in Step 3 of their W-4, the other claims $0 2. Each spouse claims $1,000 in Step 3 (splitting the credit) The IRS Tax Withholding Estimator tool on irs.gov is perfect for your situation - just plug in both of your income info and it will tell you exactly how to fill out both W-4s to get close to the right withholding amount. This way you avoid both owing too much or getting a huge refund (which is essentially an interest-free loan to the government). Your coworker was right that coordination is key, but it's not that "only one parent can claim" - it's that the total credits claimed across both W-4s shouldn't exceed what you'll actually get on your joint return.