This thread has been incredibly helpful! As someone who works in tax preparation, I want to emphasize a few key points that might get overlooked: First, the timing of when you make this decision matters more than people realize. If you've already filed jointly for 2023, you generally can't amend just to change filing status for FAFSA purposes - the IRS rarely allows that without a compelling reason. Second, don't forget about the "prior-prior year" rule for FAFSA. For the 2025-26 academic year, they're using 2023 tax information. So if you're planning for future years, you need to think about this strategy 2 years in advance. Also, I've seen families get tripped up by the "married filing separately" vs "head of household" distinction. You can only file as head of household if you lived apart from your spouse for the last 6 months of the tax year AND paid more than half the household expenses. Just being married and filing separately doesn't automatically make you head of household. One last thing - if either of you has student loans with income-driven repayment plans, filing separately can significantly reduce those monthly payments since they'll only consider one spouse's income. This could be another factor in your overall financial calculation. The multi-year planning approach mentioned by Emma is spot-on. This isn't a one-year decision!

This is an incredibly thorough discussion! As someone who just went through this exact decision process last year, I want to add one more consideration that saved us from making a costly mistake. We were so focused on the FAFSA implications that we almost overlooked how filing separately would affect our health insurance premiums. My wife gets insurance through her employer, but I buy coverage through the ACA marketplace. When you file separately, the premium tax credits are calculated based only on your individual income, not household income. In our case, filing separately would have made me ineligible for any premium tax credits because my individual income was too high, even though our combined household income would have qualified us. This would have cost us about $4,800 more per year in health insurance premiums - completely wiping out any financial aid gains! I'd strongly recommend checking with your insurance situation before making this decision. If either of you gets coverage through the marketplace, filing separately could have major implications for your premium costs. The IRS has specific rules about how premium tax credits work with different filing statuses that aren't immediately obvious. It's just another reminder that this decision touches so many different aspects of your finances beyond just taxes and FAFSA. The tools and professional advice mentioned throughout this thread become even more valuable when you realize how many moving parts there are!

Reading through everyone's experiences here has been incredibly reassuring - thank you all for sharing your stories and advice! As someone who's dealt with tax preparation errors before, I can definitely confirm that EIN mistakes are more fixable than they initially seem. A few additional points that might help: **Stay organized throughout the process** - Create a folder (physical or digital) with all your EIN documentation, amended returns, correspondence with your CPA, and any IRS communications. You'll likely need to reference these materials multiple times over the coming months. **Consider this a learning opportunity** - While stressful, going through this process will make you much more knowledgeable about tax compliance and give you confidence to spot potential issues earlier in the future. **Don't let this consume your entire focus** - Yes, it needs to be addressed promptly, but don't let anxiety about this situation prevent you from continuing to run your business effectively. Once you've filed the amendments with proper documentation, you've done your part and just need to wait for the IRS to process everything. **Trust the process** - The IRS deals with these corrections routinely. With proper documentation showing this was a preparer error and your proactive approach to fixing it, you should be able to get through this without major complications. You're handling this exactly right by seeking advice and taking immediate action. The fact that you caught this yourself during document review actually demonstrates the kind of responsible business practices that work in your favor with the IRS.

I completely understand the panic you're feeling right now - discovering that your CPA made the same EIN error for two consecutive years would be incredibly stressful! But after reading through all the excellent advice shared here, it's clear you have a solid path forward and this is absolutely manageable. What really stands out is that you discovered this through your own diligent document review rather than getting an IRS notice. That actually puts you in a much stronger position for penalty abatement requests, as it demonstrates good faith effort and proactive compliance. Here's what I'd prioritize based on everyone's experiences: **Immediate action items:** - Gather all documentation showing your correct EIN (original IRS letter, bank docs, contracts) - Demand your CPA firm handle all amendments at zero cost - this is 100% their responsibility - Create a tracking system for all the moving pieces (affected years, forms needed, deadlines) **Key advantages in your situation:** - You caught this during the slower tax season when both CPAs and IRS have more bandwidth - Two years is much more manageable than some of the 3+ year situations others have shared - Your proactive discovery shows responsibility rather than negligence The consensus here is reassuring - EIN errors are more common than you'd think, and with proper documentation and prompt action, the IRS is typically reasonable about penalty waivers. You're handling this exactly right by addressing it head-on rather than hoping it goes away. Stay strong - you've got this! The hardest part is behind you now that you know what needs to be done.

Has anyone used TurboSelf-Employed for handling these kinds of business loan situations? I can never figure out where to enter loan proceeds vs. payments in the software and always worry I'm doing it wrong.

As someone who went through a similar learning curve with my consulting business, I'd recommend getting clear on the fundamentals before making any moves. The IRS treats loan proceeds and business expenses as completely separate things. Your $65k profit is taxable income period - doesn't matter if you use it to pay off loans, buy a yacht, or stuff it under your mattress. But here's what CAN help: if you have legitimate business expenses you were planning to make anyway (equipment, software, marketing, inventory), financing those purchases can preserve your cash flow while creating deductions. The wealthy don't avoid taxes by shuffling loan payments around - they strategically time business investments and use debt to acquire income-producing or depreciable assets. Big difference between that and trying to make loan repayments count as expenses (which they're not). My advice: talk to a tax professional about legitimate business investments you could make before year-end that would qualify for Section 179 or bonus depreciation. That's where the real tax savings come from, not from loan gymnastics.

I went through a similar situation last year and the confusion around Publication 936 is totally understandable - it's written in such dense tax language! Based on everything I researched and confirmed with my tax preparer, you should be able to deduct that mortgage interest. The key thing that works in your favor is that you used the cash-out refi proceeds specifically to purchase another residence, which keeps it classified as acquisition debt rather than home equity debt under the Tax Cuts and Jobs Act rules. Since the second property qualifies as your second home (your son living there as your dependent actually supports this, plus your personal use through visits), the interest should be fully deductible as long as you're under the $750,000 qualified residence debt limit. I'd definitely recommend keeping a simple log of your visits to the second property - just dates and brief notes like "family weekend" or "maintenance visit." This creates documentation showing consistent personal use if the IRS ever has questions. Also make sure you have clear records showing how the refinance proceeds went directly to purchasing the second home. Since this deduction would push you into itemizing and make a significant difference in your tax situation, it's probably worth a consultation with a tax professional who handles real estate transactions just to double-check everything. But based on your description, this seems like a straightforward case where the interest should be deductible.

After reading through all these helpful responses, I think you're in a strong position to deduct that mortgage interest! Your situation hits all the key requirements: the cash-out refi proceeds were used to acquire another qualified residence, your son's use as your dependent counts as personal use by you, and you maintain regular personal visits to establish it as your genuine second home. The most important thing is making sure you can document the direct flow of funds from your refinance to the second home purchase - keep those closing statements organized to show the clear money trail. Since you paid off your primary home before doing the cash-out refi, you're likely well under the $750,000 qualified residence debt limit too. I'd also echo what others have said about starting a simple visit log now if you haven't already. Just basic entries like "weekend visit - family time" or "3-day stay for maintenance" will help establish that pattern of personal use if the IRS ever has questions. Given that this deduction would push you into itemizing and create significant tax savings, it's definitely worth pursuing. The rules can seem complex, but based on everything you've described, this appears to be exactly the type of situation where mortgage interest remains deductible under current tax law. Just make sure to keep detailed records and consider that professional consultation for peace of mind given the dollar amounts involved.

I went through a nearly identical situation with Jackson Hewitt in 2022 - they botched my education credits and completely missed my student loan interest deduction, costing me almost $1,200 in additional tax liability. Here's what actually worked for me: 1. **Document everything with dates and reference numbers** - I created a spreadsheet tracking every phone call, email, and document exchange 2. **Request their internal complaint escalation process** - Most people don't know that Jackson Hewitt has a formal Quality Review Department separate from local management 3. **File Form 14157 immediately** - Don't wait. I filed mine while simultaneously working with their corporate office, which actually strengthened my position 4. **Contact your state's Board of Accountancy** - If your preparer was a CPA or EA, this adds serious pressure The breakthrough came when I sent a certified letter to their corporate Quality Review Department (not just customer service) citing IRC §6694 and mentioning I had already filed Form 14157. Within 5 business days, I had a call from their regional compliance manager who arranged for a senior EA to completely redo my return at no cost. They also reimbursed the $89 I paid for professional review of their errors. Total timeline: 3 weeks from escalation to resolution. The key is being persistent and showing you understand the regulations better than their seasonal preparers do.

Based on my experience dealing with tax preparer errors, I'd recommend taking a multi-pronged approach while the filing deadline is still fresh. First, send a demand letter via certified mail to both the local office manager AND Jackson Hewitt's corporate compliance department, specifically referencing IRC §6694 and Circular 230 violations. Include calculated damages from their errors and request full remediation within 10 business days. Simultaneously, file Form 14157 with the IRS - don't wait on this. The form creates an official record and often motivates preparers to resolve issues quickly. Also consider contacting your state's consumer protection agency if Jackson Hewitt is licensed there. Document the specific financial impact: if their education credit error cost you $1,000 in additional tax, plus any penalties or interest, they should cover those costs under their accuracy guarantee. Most major chains will settle rather than face regulatory scrutiny, especially when you demonstrate knowledge of the specific tax code sections they violated. Keep pushing up their corporate ladder - local managers often lack authority to authorize full remediation, but regional compliance departments usually do. The key is showing you won't accept partial fixes or excuses.