This is a really helpful thread! I'm dealing with a similar situation where my adult son was in rehabilitation for addiction treatment for about 4 months last year, and I'm wondering if the same rules apply. I provided all his financial support during that time and he lived with me before and after treatment. From what I'm reading here, it sounds like temporary absences for medical treatment would fall under the same IRS guidelines as incarceration? Just want to make sure I understand this correctly before I file.

I work as a tax preparer and see these situations fairly often. Based on what you've described, you should be able to claim your partner as a dependent. The key tests you need to meet are: 1. **Support Test**: You provided more than half of his total support for the year (sounds like you clearly meet this) 2. **Gross Income Test**: His income must be less than $4,700 for 2024 (you mentioned zero income, so ✓) 3. **Member of Household Test**: This is where the incarceration question comes in For the member of household test, the IRS considers temporary absences - including incarceration, hospitalization, education, military service, etc. - as time the person is still living with you, provided it's reasonable to assume they'll return to your household. Since your partner lived with you for 7 months and returned after his release, the 5-month incarceration would be considered a temporary absence. Make sure to keep documentation of the financial support you provided (rent, utilities, groceries, etc.) and proof of your shared residence before and after the incarceration period. You don't need to submit anything with your return, but having records ready is always smart in case of questions later. Also double-check that no one else (like his parents) will be claiming him as a dependent to avoid any conflicts with the IRS.

I went through something very similar with my company's ESOP last year and wanted to share a few things that really helped me navigate the process more effectively. First, I'd strongly recommend getting a complete copy of your ESOP plan document (not just the summary), as many plans have specific provisions for medical hardships that aren't well-publicized. My plan actually had a tiered hardship system where certain medical emergencies qualified for reduced penalties beyond just the standard IRS exceptions. Second, timing is absolutely crucial. I ended up splitting my withdrawal across two tax years (December and January) which kept me from jumping into a higher bracket. But here's something most people miss - if you're going to do this, make sure you have qualifying medical expenses in both tax years to maintain the penalty exception for each distribution. One thing that saved me thousands was discovering that my state (Ohio) actually has a more generous medical expense threshold than the federal 7.5% AGI requirement. Some states use different calculations or have additional exceptions, so definitely research your state's specific rules. Finally, don't overlook the administrative side. Make sure you understand exactly when taxes will be withheld versus when they're due. My plan automatically withheld 20% for federal taxes, but I still needed to make estimated quarterly payments because the withholding wasn't enough to cover my actual liability. The whole process was stressful, but taking time to understand all the rules upfront saved me from making costly mistakes. Happy to share more details if anyone has specific questions about the process.

I've been following this thread and wanted to add something that might be helpful for your situation. Since you mentioned you've been contributing to the ESOP for 5 years, there's another angle worth exploring that I don't think anyone has mentioned yet. Some ESOPs have what's called "diversification rights" that kick in after you've been a participant for a certain number of years (often 5+ years) and reached a certain age. Even if you haven't reached the typical retirement age, these rights sometimes allow you to diversify a portion of your ESOP account into other investments without the same withdrawal penalties. This isn't the same as taking cash out, but it could give you access to funds through a diversification distribution that might have different tax treatment than a standard early withdrawal. The diversified amount could potentially be rolled into an IRA, giving you more flexibility for penalty-free withdrawals under various circumstances. Also, I'd recommend specifically asking your plan administrator about any "in-service distribution" options beyond just hardship withdrawals. Some plans allow limited distributions after certain service periods that might not be well-documented in the standard materials. Given all the great advice in this thread about negotiating medical bills, using EAP services, and timing strategies, you're definitely on the right track to minimize the financial impact. The combination of reducing the actual medical expenses AND optimizing the withdrawal strategy could make this much more manageable than that initial 40% tax hit you were facing.

As someone who works in tax preparation, I can confirm that the expat situation you're describing is indeed complex! You're correct that as a US citizen, you'd owe federal taxes on lottery winnings regardless of where you live globally. For state taxes, since you don't have state residency while living in Germany, you would likely only owe state tax to the state where you purchased the ticket (if that state taxes lottery winnings). So in your Florida example, you'd be in luck since Florida doesn't tax lottery winnings at all. However, the German tax situation is trickier. Germany generally taxes residents on worldwide income, and lottery winnings could potentially be subject to German income tax. The US-Germany tax treaty would come into play to prevent double taxation, but you'd likely need to report the winnings to German authorities and potentially pay the difference if German rates are higher than US rates. I'd strongly recommend consulting with a tax professional who specializes in expat taxation before claiming any significant lottery prize. The interplay between US federal tax, potential state tax, German tax obligations, and treaty provisions is complex enough that professional guidance would be essential to avoid costly mistakes. Also worth noting - make sure you're complying with FBAR and FATCA reporting requirements if your winnings push your foreign account balances over the reporting thresholds!

This is such a fascinating discussion! I had no idea lottery taxation could get this complicated across state lines. Reading through everyone's experiences, it seems like the general rule is that you'll potentially owe taxes to both the state where you bought the ticket AND your state of residence, but then you can usually claim a credit to avoid double taxation. What really surprises me is learning about all these edge cases - tribal casinos having different rules, expat situations, temporary residency complications, and states like California not taxing their own lottery winnings but still taxing residents who win in other states. One thing I'm curious about that I haven't seen mentioned - what happens with online lottery purchases? Some states now allow you to buy lottery tickets online through official state websites. If you're physically in one state but buying tickets online from another state's lottery website, which state's tax rules apply? Does it go by your physical location when you made the purchase, or the state whose lottery you participated in? Thanks to everyone who shared those helpful resources too. It's clear that for any significant winnings, professional guidance is definitely the way to go rather than trying to navigate all these complex multi-state tax rules on your own!

I went through something very similar with my S-corp last year - had a massive negative adjustment that made me panic. Turns out it was due to inconsistent tracking of shareholder loans and distributions over multiple years. The key thing I learned is that this adjustment is essentially the IRS form trying to force your balance sheet to balance when there are discrepancies between your books and tax reporting. In my case, we had been treating some owner draws as distributions when they should have been recorded as loan repayments, which created a snowball effect over time. My advice: Don't just ask your CPA to explain it - ask them to show you a detailed reconciliation of every component that makes up that -$1,015,382. They should be able to break it down line by line. If they can't or won't do that, it might be time to find a new CPA who specializes in S-corp taxation. Also, this is a good reminder to track your shareholder basis carefully going forward. That large negative adjustment could potentially impact your basis calculation, which affects how much you can take in distributions without tax consequences.

I've been through this exact scenario with my S-corp and that negative adjustment definitely warrants attention. In my experience, these large adjustments usually stem from one of three main issues: (1) distributions that weren't properly tracked as reducing shareholder basis, (2) inconsistent depreciation methods between book and tax records, or (3) shareholder loans that weren't correctly classified. The good news is this adjustment itself won't directly impact your current year tax liability since S-corp income flows through to your personal return via K-1. However, it could significantly affect your shareholder basis calculation, which is crucial for future distributions and loss deductions. I'd strongly recommend requesting a detailed breakdown from your CPA showing exactly what transactions or discrepancies are creating that -$1,015,382 figure. A competent CPA should be able to provide a line-by-line reconciliation. If they can't explain it clearly, that's a red flag about either their S-corp expertise or the quality of your underlying bookkeeping. Also, consider having them prepare a comprehensive shareholder basis schedule going back to when you elected S-corp status. This will help ensure you're properly tracking your basis for future tax planning and distribution decisions.

I've been dealing with retirement account distributions for several years now, and this discussion really captures all the key points about handling Fidelity 1099-Rs correctly. For anyone who finds this thread in the future, I wanted to summarize the main takeaways: 1. **Use "FIDELITY INVESTMENTS" as the payer name** - This is the primary entity name that matches what Fidelity reports to the IRS 2. **The EIN is crucial** - Enter it exactly from Box 12 of your 1099-R, as this is what the IRS primarily uses for matching 3. **Ignore departmental details** - The "INSTITUTIONAL OPERATIONS CO." and similar subsidiary information isn't needed for tax reporting 4. **Double-check dollar amounts** - The IRS is stricter about monetary accuracy than minor name variations 5. **Be consistent across multiple accounts** - Use the same "FIDELITY INVESTMENTS" format for all your Fidelity retirement distributions I've successfully filed using this approach for the past three years without any issues. The key insight from this thread is understanding that the IRS matching system is designed around EINs and primary entity names, not the complex subsidiary structures that appear on the actual forms. Thanks to everyone who shared their experiences - this has become an excellent reference guide for what can be a confusing aspect of retirement tax reporting!

As someone who's relatively new to handling retirement distributions, I wanted to add my perspective after reading through this incredibly helpful discussion. I actually had a very similar situation with my Fidelity 403(b) rollover distribution last year, and I made the same mistake that several people mentioned here. I initially tried to enter the full name exactly as it appeared on my 1099-R, including all the subsidiary information, thinking that being "more accurate" would be better. This ended up causing a minor delay in my return processing, just like some others experienced. What I learned from that experience - and what this thread confirms - is that the IRS automated matching system is optimized for consistency and standardization, not necessarily for capturing every detail that appears on the source documents. The EIN-based matching approach makes so much more sense once you understand that framework. For future filers dealing with this same question: the collective wisdom here is solid. Use "FIDELITY INVESTMENTS," get the EIN right, and don't overthink the departmental details. The tax system is designed to handle this standardized approach much more smoothly than trying to accommodate all the variations in corporate subsidiary naming conventions. Thanks to everyone who shared their real-world experiences - this kind of practical guidance is exactly what makes online tax communities so valuable during filing season!