Has anyone checked line 30 on Form 1040 (Recovery Rebate Credit) on both returns? That was the source of discrepancy for me last year - one software automatically calculated it correctly while the other one needed manual input.

I just went through this exact same situation last month! Had a $89 difference between TurboTax and FreeTaxUSA. After comparing both returns line by line, I discovered the issue was in how they handled my dependent care FSA contributions on Form 2441. TurboTax was correctly reducing my eligible dependent care expenses by the FSA amount I contributed, while FreeTaxUSA was double-counting it somehow. The IRS instructions are pretty clear that you can't claim the dependent care credit for expenses you already paid for with pre-tax FSA dollars. My advice would be to print out both completed returns and go through them systematically: - Compare your Form 1040 line by line - Check any schedules you have (A, B, C, etc.) - Look at state return calculations if applicable - Pay special attention to credits like Child Tax Credit, Education Credits, and Dependent Care Credit The $64 difference you're seeing is definitely worth investigating. In my case, TurboTax had it right and I would have gotten in trouble with the IRS if I'd filed the incorrect return showing the higher refund.

One thing nobody has mentioned yet is that if the annuity was a joint annuity with rights of survivorship, the tax treatment would be completely different. Are you sure it wasn't this type of annuity? Sometimes these details get missed when you're dealing with the aftermath of losing someone.

I'm sorry for your loss and understand how overwhelming this situation must be. Based on what you've described, you're dealing with a common but complex estate tax issue. Since the annuity had no named beneficiary and went to the estate, you're correct that the full $400k becomes taxable income to the estate in 2023. On Form 1041, you'll report this as income and can claim the 20% withholding as a credit against the estate's tax liability. Unfortunately, once qualified funds flow through an estate, the opportunity for tax-deferred treatment (like rolling to an inherited IRA) is generally lost. The estate will pay taxes on the income, then distribute the after-tax proceeds to your husband per the will. A few suggestions: 1) Consider if the estate can make distributions in the same tax year to potentially shift some tax burden to your husband if he's in a lower bracket, 2) Make sure you're claiming all allowable estate deductions on the 1041 to minimize taxable income, and 3) Consult with an estate tax professional who can review all the specific details of your situation. The K-1 your husband receives from the estate distribution won't be taxable income to him personally since the estate already paid the tax.

I'm new to dealing with estate matters, but this discussion has been incredibly educational! I'm currently helping my elderly neighbor navigate some inheritance issues, and the level of detail everyone has shared here is amazing. One question that came up while reading through all these responses - for those who've successfully gotten step-up basis corrections from their brokerages, did you encounter any situations where the brokerage initially pushed back or claimed they couldn't make the adjustment? My neighbor's situation involves a smaller regional brokerage firm, and I'm worried they might not be as familiar with these requirements as the larger national firms that others have mentioned. Should we be prepared with specific IRS regulations or forms to reference if they give us resistance? Also, the point about documenting everything thoroughly really resonates. It sounds like creating that comprehensive paper trail isn't just helpful for taxes - it's essential for avoiding problems down the road. Thank you all for sharing such detailed experiences!

As someone new to estate administration, I'm amazed by how complex these step-up basis issues can be! I'm currently serving as executor for my grandmother's estate and dealing with similar brokerage account complications. Reading through everyone's experiences here has been incredibly valuable. The point about verifying that the step-up basis uses the actual date of death rather than the account transfer date is something I never would have thought to check. I'm definitely going to request that detailed breakdown from our brokerage before proceeding with any distributions. One thing I'm curious about - for those who've dealt with multiple brokerage firms, have you found that some are more responsive and knowledgeable about estate matters than others? We're working with a mid-sized firm and I'm wondering if it might be worth consolidating assets with a larger firm that has more specialized estate services. Also, the advice about creating detailed documentation for beneficiaries is spot on. Even though it feels like extra work now, I can see how having everything clearly organized will save headaches later when family members need to file their own tax returns. Thank you all for sharing such detailed experiences - this community has been more helpful than any of the professional resources I've consulted so far!

As a newcomer to this community, I'm amazed by the depth of knowledge and helpful advice being shared here! Reading through this entire discussion has been incredibly educational. I wanted to add one consideration that might be relevant for your situation - since you mentioned this was such an unexpected windfall during a business trip, you might want to think about setting aside money immediately for your tax obligations rather than spending or investing it all right away. With federal taxes potentially in the 32-37% range for this amount (depending on your other income), plus California state taxes around 9-13%, plus potential penalties if you don't make adequate estimated payments, you could be looking at owing $35,000-$45,000 or more in taxes on these winnings. I'd suggest opening a separate savings account and immediately parking at least 45-50% of your winnings there specifically for taxes. This way you won't be scrambling to come up with tax money next April, and if you end up owing less than expected, you'll have a nice bonus left over. The psychological aspect is important too - it's much easier to set aside tax money right after a big win when you're feeling flush than it is to come up with that same amount months later when the excitement has worn off and you've gotten used to having the extra money. Congratulations on your incredible luck, and thanks to everyone else for sharing such detailed and helpful guidance!

As someone who's dealt with similar international tax complications, I want to echo what others have said about getting professional help, but also add a timeline consideration that's crucial for your situation. Given that this happened recently and we're already well into the tax year, you need to act quickly on several fronts: 1. **Immediate estimated payments**: With winnings this large, you'll likely trigger underpayment penalties if you don't make quarterly estimated payments. The next deadline is coming up fast, so calculate roughly what you'll owe and get a payment submitted to avoid penalties. 2. **FBAR compliance**: Since you opened that German bank account, the FBAR deadline is October 15th with automatic extension, but don't wait. Get familiar with the FinCEN Form 114 requirements now. 3. **Documentation while it's fresh**: Contact the German casino ASAP for any available documentation of your win. International paperwork can take weeks to obtain, and memories fade. Get everything in writing while the details are still clear. The advice about setting aside 45-50% for taxes is absolutely critical. In your shoes, I'd immediately transfer that amount to a separate "tax account" and treat it as already spent. The worst feeling is having to scramble for tax money months later when the reality of the bill hits. One more thing - consider consulting with both a tax professional AND a financial advisor. This windfall could significantly impact your overall financial planning, retirement contributions, and investment strategy going forward. You've got a great problem to have, but it definitely requires immediate and careful attention!

According to the IRS website (https://www.irs.gov/refunds/tax-season-refund-frequently-asked-questions), this error can happen for several reasons: 1. Information entered doesn't match their records 2. You've checked too many times in a 24-hour period 3. Your return is still being processed 4. There's a system update in progress I'm seeing a lot of posts about this on other forums too. Can anyone confirm if checking too frequently actually causes this error? I've been checking mine daily and wonder if I should stop.

I went through this exact same situation last year after my divorce! The "information doesn't match" error started appearing right around the same timeframe too - about 6 weeks after filing. In my case, it turned out to be related to the name change process. Even though I had filed with my married name (since that's what was on my W-2s), the IRS system was trying to cross-reference with Social Security records that were in the process of being updated to my maiden name. What finally worked for me was calling the IRS Identity Protection Specialized Unit directly at (800) 908-4490. I know everyone says calling is impossible, but I had better luck with this specific number than the general line. They were able to see that my return was actually processing fine - the WMR tool was just having authentication issues because of the name situation. The whole thing resolved itself once they put a note in my file, and I got my refund about 10 days later. Since you mentioned this refund is important for your fresh start, I'd recommend trying that number. They seem more equipped to handle post-divorce filing complications. Good luck! 🤞