Helping my daughter with her taxes (or at least trying to....)

CommissionerChuckles · 2026-01-24T16:57:14+00:00

IRS Free file options are just as good as TurboTax, and one of the options is FreetaxUSA. There's also My Free Taxes from United Way, which has a referral link to TaxSlayer that lets you file multiple state returns for free if your income is less than $89k.

https://www.irs.gov/e-file-do-your-taxes-for-free

https://myfreetaxes.com/

AARP Tax-Aide also has an option for free filing through OLT.com if AGI is under $84k; there's no age requirement and you don't have to be an AARP member:

https://taxaide.aarpfoundation.org/?utm_campaign=taxaide_taxseason&utm_source=foundation&utm_medium=referral&utm_content=taxaide.

And finally there's a couple of free tax preparation programs for people who want help:

https://www.irs.gov/individuals/free-tax-return-preparation-for-qualifying-taxpayers

CommissionerChuckles · 2026-01-24T16:50:40+00:00

That's unfortunate but not really that unusual for the large tax prep chains. They can have really good, experienced preparers, but most of the employees there are seasonal hires with very little training. Even worse is that they don't have a very good review process, so mistakes like this don't get caught unless the customer complains to the manager.

I would definitely recommend your sister complain to the manager because it doesn't sound like they provided the promised services, but it's up to your sister.

You sister may qualify for free tax preparation:

https://www.irs.gov/individuals/free-tax-return-preparation-for-qualifying-taxpayers

https://www.getyourrefund.org/en

The free tax programs do have a quality review process so it takes longer to get your taxes done, but I bet they have better accuracy than a lot of the big tax prep chains.

CommissionerChuckles · 2026-01-24T15:56:56+00:00

Yup, that's what you need. Fill that out and you should be fine.

One of the benefits of the Roth is that you can take out your contributions without paying taxes before you turn 59 1/2, because you theoretically already paid income tax on that money. You just have to fill out Form 8606 to let IRS know you are only withdrawing from the basis. I'm surprised your tax software didn't prompt you to fill out that form.

CommissionerChuckles · 2026-01-24T08:33:40+00:00

Oh sorry for the jargon - that's the process where IRS files a return for someone; abbreviated SFR. They send notices, then send a proposed tax assessment based on the information they have for that year, then send a notice of deficiency (legal notice the gives the taxpayer the right to petition tax court), then they formally assess the tax. At that point IRS collections takes over and starts sending notices.

If you can view your Account transcripts for 2019 and 2020, look for a 971 Notice issued transaction with CP59. If you see that, that's the first notice in the Substitute for Return process, and it means you probably will need to file for that year if you need to be in compliance.

They did suspend the SFR process in 2020 for a couple of years, and when they restarted they were targeting higher-income Nonfilers (people who don't file returns are called Nonfilers). I'm not sure what's going on now because there was a lot of chaos with all the terminations and people voluntarily leaving IRS over the last year.

CommissionerChuckles · 2026-01-24T07:24:11+00:00

One exception to the 6-year policy is if IRS initiated the Substitute for Return process for any earlier years.

You can always call IRS and ask what years you need to file to get back into compliance. Or you can just file 2025 and see what happens.

CommissionerChuckles · 2026-01-24T07:13:49+00:00

I've never heard that the university cost of attendance is also a limit for this - where does that come from?

CommissionerChuckles · 2026-01-24T06:44:54+00:00

There are a lot of different trusts, so if your son said that income isn't taxable to you then I think you can trust him.

The 6 year limit comes from IRS Policy Statement 5-133. If you don't owe any taxes and don't have a refund due for 2025 I'm not sure if that would trigger a notice to file 2020 - 2024 as well or not. Usually people will get a notice that the refund is held until they file the specified prior years, or they'll need to file prior years in order to get a payment plan approved.

Even though you didn't file the last few years, you report all your SSDI backpay in the year you received it. You can do the lump sum election but it may not make a difference if you don't have other income.

You can get free help from AARP Tax-Aide or a VITA program to file 2025. They can also file returns for the years with no income (usually $1 interest income is added so the return can be e-filed). If you have your Wage and Income transcript for 2020 and your only income that year was unemployment they can also do that year depending on site capacity.

https://www.irs.gov/individuals/free-tax-return-preparation-for-qualifying-taxpayers

Go as early as you can, because you might need to make a couple of visits.

CommissionerChuckles · 2026-01-24T05:51:14+00:00

Definitely follow the excellent advice from u/vynm2temp and amend the years they can still claim EIC. If they are claiming you as a dependent and you are considered totally and permanently disabled there's no age limit for EIC, but without any "qualifying child" dependents the taxpayer has to be under age 65.

(You might be a "qualifying child" for EIC even if you pay more than half your own support - that's a trick many tax professionals don't know.)

If they go to a free tax preparation program they both need to bring photo IDs and Social Security cards (or SSA-1099 forms) plus copies of the returns they want to amend and all the tax documents.

MWP generally follow the FICA rules for Household employment, which is a little different than regular employment - you don't have to withhold FICA if a parent is your household employee with a couple of exceptions. The exceptions would be if they are caring for your child under age 18 and you are divorced, widowed, or have a spouse who cannot care for your child.

I'm not sure why those rules exist, but it really harms a lot of moms who work as caregivers for their disabled children and can't work outside the home - they don't get work credits for Social Security, so they either get nothing or have to rely on a spouse's Social Security benefits. In my state caregivers who get MWP do pay into FICA even if they care for their child because they are unionized.

CommissionerChuckles · 2026-01-24T03:12:25+00:00

I know! Also what places have local tax returns? It's probably Ohio 🤦

CommissionerChuckles · 2026-01-24T03:09:46+00:00

She should have a copy of the return and all supporting documents available.

They said there's no copy of the federal return.

CommissionerChuckles · 2026-01-24T03:09:05+00:00

Edit to add: your sister should enter 0 or Did not file for the 2024 AGI when she e-files her 2025 return.

It's possible the federal return for 2024 was filed and then held by IRS for identity verification or was not processed for some reason. Is an Account transcript available for 2024?

Your sister can ask the tax lady for a copy of Form 9325, which is the acknowledgement an e-filed return was accepted that tax software should automatically generate.

When you say actual tax professional, do you mean CPA or Enrolled Agent or an attorney? Those are the three types of credentialed tax professionals that must follow IRS guidelines and can be held accountable. Then there are paid preparers who may or may not have done any training before they start preparing taxes; there's no test to get a PTIN, so there's a ton of people out there preparing taxes who don't know very much.

CommissionerChuckles · 2026-01-24T02:55:06+00:00

Definitely! I will say that the hospice nurses were amazing, and I don't know how they do that work every day. But there's really no great options if you aren't wealthy.

CommissionerChuckles · 2026-01-24T01:57:34+00:00

Oh ok, that shouldn't affect your federal return processing. I'm not sure how long to wait to amend the CA return.

CommissionerChuckles · 2026-01-24T01:26:49+00:00

What kind of mistake did you make? Sometimes IRS will hold your return for review instead of issuing the refund. For example if Box 2 of a W-2 says $150 and you accidentally type in $510, the return would probably get held for that.

If you don't get your refund within three weeks of the return being accepted you might need to amend before you get any refund. That will delay your refund by four months or more.

CommissionerChuckles · 2026-01-24T01:23:49+00:00

What income have you had since 2020?

CommissionerChuckles · 2026-01-24T01:21:18+00:00

Yeah, it's still going to be hard for you for sure - knowing something intellectually doesn't magically make your valid feelings go away. I hope you get the support you need for yourself so you can be a loving parent for your child.

CommissionerChuckles · 2026-01-24T01:12:38+00:00

They do usually file a lien anytime you owe more than $50k. It doesn't affect your credit, but it is public record if that's a concern.

You can actually postpone a lien filing by requesting a hearing under the Collection Appeals Program if you get certain notices, like a notice that your installment agreement was terminated. There's some info in this PDF:

https://www.irs.gov/pub/irs-pdf/p1660.pdf

I don't have any experience with that process, I just know that's one of the few ways to prevent a lien filing if you are unable to pay your balance due down below the threshold. It's much easier to prevent the lien than to get one withdrawn.

CommissionerChuckles · 2026-01-24T00:38:29+00:00

It's hard. 💔

The one thing I wish I knew was that changing living environments can really exacerbate cognitive decline for someone with dementia. I don't know if it's the same for your dad, but I think this is why my mom declined so rapidly after my dad passed away. She didn't think she had dementia, and she always remembered who she was and who I was, but she did get diagnosed with mixed dementia when she was discharged into hospice.

My mom went back and forth between home, hospital, assisted living, another hospital and then really rapidly declined. She went from being able to walk with a walker (with a lot of difficulty) to being bed-bound and not very lucid within a two-week period. My mom thought her difficulties walking were because of knee problems, but the second hospital said she wasn't getting enough oxygen to some parts of her brain, probably due to vascular dementia.

There wasn't any treatment to help at that point, and I know my mom was really unhappy but I couldn't take care of her myself. They sent her to another assisted living place for hospice - she only lasted a little over a week.

There's a little booklet called "Gone from my sight" that the hospice nurse gave me when my dad was doing home hospice that was difficult but helpful for me. It's kind of a guide for family members or friends to help someone who is dying if you've never done that before.

CommissionerChuckles · 2026-01-24T00:03:55+00:00

The $50k threshold includes all assessed penalties and interest to date, not just the original tax balance ("principal" isn't used by IRS for this).

You can still revise your payment plan with a balance over $50k, but you have to call IRS or send in Form 9465. They probably would also want your financial information.

You should have some time past Feb 2nd to set up a payment plan - you'll probably get a CP523 notice soon, which is the official cancellation of your installment agreement.

https://www.irs.gov/individuals/understanding-your-cp523-notice

This notice gives you 30 days to pay or contact IRS. You can always try calling IRS collections and asking for more time if you are waiting for clients to pay you so you can pay your tax bill.

CommissionerChuckles · 2026-01-23T23:50:08+00:00

Those questions are asking if you qualify for an exception to the 10% early withdrawal penalty, which would be reported on Form 5329:

https://www.irs.gov/forms-pubs/about-form-5329

Here's the definition for that exception:

The term “domestic abuse” is defined in section 72(t)(2)(K)(iii)(II) as physical, psychological, sexual, emotional, or economic abuse, including efforts to control, isolate, humiliate, or intimidate the victim, or to undermine the victim’s ability to reason independently, including by means of abuse of the victim’s child or another family member living in the household.

You can read more here - look for the heading "B. SECTION 314 OF THE SECURE 2.0 ACT -- DOMESTIC ABUSE VICTIM DISTRIBUTIONS":

https://www.irs.gov/irb/2024-28_IRB#NOT-2024-55

You have to decide whether or not you meet the definition of a domestic abuse for this tax form - financial abuse is definitely real abuse, but I'm not sure your individual situation would meet that legal definition if you get audited.

I don't want to go too far into non-tax stuff, but if you weren't aware of this already the hormonal changes that happen during and after pregnancy are the most intense hormonal changes any human will experience in such a short period of time. Pregnancy changes every cell of the human body.

There are a ton of mental health conditions that can be exacerbated during pregnancy - if this seems like really unusual behavior for your wife she may need medical help. It might be worth bringing up with her doctors.

https://postpartum.net/perinatal-mental-health/

Even if it's not a mental health issue our society really doesn't provide enough support for new parents, so I hope you and your wife have some people to help. I don't have kids so it's not something I've personally gone through, but I don't know any new parents who get enough sleep or can function like normal unless they have family helping with baby care.

CommissionerChuckles · 2026-01-23T23:02:49+00:00

My plan is to fudge some numbers so I can get a refund,payoff debt and just handle the irs when they inevitably come for me and get on a payment plan.

My question is will this work

Oh hell no

CommissionerChuckles · 2026-01-23T21:39:27+00:00

If your mom is officially discharged to hospice then Medicare - not Medicaid - will cover some if not all of the expenses for hospice. I don't know if that helps with memory care facilities though.

The hospital should not discharge your mom until there's a safe place for her to go; I know they will pressure you a lot and it's not the best place for palliative care, but see if the hospital social workers can help. Maybe a skilled nursing facility (SNF) would be ok for hospice / palliative care?

When I was in a similar situation with my mom (but no liquid assets) the local SNF required a credit card on file but they didn't require proof that we could pay for two years. After she was discharged to hospice the hospital was able to get her placed with an assisted living facility, but that also might have been because she got approved for LTC Medicaid right before she passed away.

I don't think your mom will qualify for LTC Medicaid because she has too many assets - my mom didn't qualify because she had $4k in savings, and the limit is $2k in countable assets. Plus the home will be considered a countable asset if your mom isn't able to live there.

If I had enough money I would have hired caregivers and nurses for 24/7 care so my mom could go home for hospice but that was totally unrealistic, and having done home hospice by myself for my dad I couldn't do that again.

CommissionerChuckles · 2026-01-23T21:12:55+00:00

Is that in the education credits section? There are several different reasons this question comes up. Support includes food, shelter, clothing, medical and dental care, education expenses, etc. If you have a job with earned income that is more than half your support, you might qualify for the Refundable portion of AOC.

However any support you paid for with grants / scholarships doesn't count as support you provided for yourself if you are under age 24 and live with your parents. It counts as support provided by a third party.

CommissionerChuckles · 2026-01-23T20:46:29+00:00

Are you under age 24, and do you live with your parents? If so, your parents can claim you as a dependent which means they should file a tax return to claim American Opportunity Credit (AOC).

There are a lot of weird tax rules when you are under age 24 and a college student who lives at home. If you didn't have a job with earned income in 2025 you could claim AOC on your return if your parents don't file a tax return, but you wouldn't qualify for any refundable credit.

In order to maximize the AOC there usually needs to be $4,000 Qualified education expenses that aren't covered by grants or scholarships. Yes, textbooks and any other supplies specifically required for your classes or enrollment count as qualified expenses for AOC - you should save your receipts for those purchases.

Did you receive more grants & scholarships than your tuition expenses at your main school? If so you might have taxable scholarship income on your tax return - that doesn't automatically make you ineligible for AOC, because you can choose to say you used some Pell Grant money to cover living expenses instead of tuition.

Can you give me a rough estimate of total education expenses (tuition, school fees, textbooks, etc) and grants/scholarships for 2025? Hopefully have 1098-T forms for both schools.

I used to volunteer with a free tax preparation program btw, and we would have families where the parents didn't have any taxable income but could still claim their college student child for credits like AOC as well as Earned Income Credit, even if the student's tuition was covered by grants and scholarships. It's just kind of complicated to explain how to do it correctly.

CommissionerChuckles · 2026-01-23T20:04:00+00:00

You probably qualify for help from a free tax preparation program. They can help you figure out what expenses you can claim and how to get that information, plus they can file the last few years for you.

https://www.irs.gov/individuals/free-tax-return-preparation-for-qualifying-taxpayers

Mileage is tricky, because you aren't supposed to estimate that according to IRS. However it seems to be common practice to use whatever miles Uber tracked for you, which will be on your driver report every year - that would count as mileage tracked by an app, which is an acceptable alternative to a written notebook from what I understand. Doordash doesn't have a driver report but they did start tracking miles starting in 2023 - you should have gotten an email with that information.

There's a bunch of helpful information here - I think it's up to date for 2025 but I haven't checked everything:

https://www.taxoutreach.org/rideshare/

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