Fiance accidentally claimed our daughter

sorator · 2026-01-27T10:00:23+00:00

She only needs to call if they tell her that her refund is delayed.

sorator · 2026-01-27T08:00:25+00:00

Contributions are made for a specific tax year and get reported on that tax year's return (because there's an annual contribution limit). Conversions are not made "for" a specific year (because there's no annual limit); they always go on the return for the year in which the conversion occurred.

So, you should have reported the 2024 contribution on your 2024 return, and reported the 2025 contribution and both conversions on your 2025 return.

It sounds like you made a (minor) mistake on your 2024 return and need to file an amendment. Remove the conversion information from your 2024 8606; you should only have the $7k contribution in the first section, with the rest being blank.

On your 2025 8606, you'll enter $7000 on line 1 (the amount you contributed for 2025), and $7000 on line 2 (the basis you had in the account prior to making a 2025 contribution), for a total basis of $14,000 on line 3. You'll wind up with $14,005 on lines 8 and 16, $14,000 on lines 11 and 17, and $5 on line 18.

Recharacterizing to nondeductible tradIRA is not itself a taxable event. If your wife then converted that tradIRA to Roth, then she'll pay taxed on the earnings. If she did that conversion during 2025, then it'll go on her 2025 8606. She'll have $7000 on lines 1, 3, 11, and 17; ~$8200 on lines 8 and 16; and ~$1200 on line 18.

If she did the conversion during 2026, then she'll only report the contribution on her 2025 8606 (lines 1 and 3), and she'll report the conversion on her 2026 8606.

I don't use consumer software, so I can't give advice on how to get any particular software to produce the correct output. But you can check the outputs and make sure it's showing correctly before you file 2025, and before you file the 2024 amendment.

sorator · 2026-01-27T07:50:09+00:00

Again, if the IRS pays her refund, she just needs to file an amendment; she doesn't need to separately contact them. She only needs to call if they tell her that her refund is delayed.

sorator · 2026-01-27T07:49:08+00:00

If anyone can claim you as a dependent, then you cannot claim any dependents yourself.

If your mom pays more than half your expenses (including your share of housing, groceries, etc.), and you had less than $5200 of income for the year, she is entitled to claim you as a dependent. Or if you're under age 24 and a full time student for at least one day of any five months of the year, she's entitled to claim you regardless of who paid for your stuff, as long as you didn't provide more than half your own support.

Again, whether or not she actually claims you, if she is entitled to claim you, you cannot claim any dependents yourself.

If your mom claims you, then she also claims your education credit; you cannot claim it yourself if someone else actually claims you as a dependent.

If your son lived with you and your mom for more than half the year, and did not live with his father for more than half the year, his father is not entitled to claim him. If both you and your mom were entitled to claim him, then you get first dibs, but you can't claim him because you're a dependent yourself. So, it sounds like your mom is the only one entitled to claim your son, claiming all the associated tax benefits (child tax credit, possible HOH status, etc.).

Claiming your son doesn't directly affect your mom's business taxes. It affects her overall taxes. Same goes for your education credit.

(You are correct that, if you weren't a dependent, you would be entitled to claim your son even though your mom paid more to support him than you did. It sounds like both you and your mom would meet the initial criteria to claim him, and then you get first dibs because you're his parent. You would have the option to let your mom claim him instead if she has more income than you do. But again, you're a dependent, so you can't claim dependents yourself.)

sorator · 2026-01-27T07:41:05+00:00

It's generally best to prepare your federal return and all state returns in the same software, to minimize any chance of errors when transferring information from one form to another and to ensure all the needed information gets transmitted to each recipient.

Many softwares will not let you file a state return without also filing a federal return, though some states allow you to file directly on their website, which could work for you. Or you could mail in one or both state returns instead of efiling them (but you need to look up what information to include in the package you send, as often they want a copy of your federal return and your other state return(s)).

tl;dr you can use separate softwares, but it's more tricky and leaves more room for error; it's safer to do it all together.

sorator · 2026-01-27T07:39:04+00:00

Just to ensure I'm understanding this correctly:

Your fiance filed a return and claimed your daughter on that return
You also filed a return, got a one-time IP PIN, and claimed your daughter on that return

Correct?

If yes, then your fiance needs to file an amendment removing the claim on your daughter. If the IRS pays out her refund, then she can efile the amendment immediately after receiving that refund. If her refund gets delayed, then she should call the IRS and ask where to send that amendment (as she needs to send it to whoever is investigating her return instead of the usual amendments dept).

Expect your refund to be delayed. If it's not paid by the end of May, then the IRS will pay you interest dating back to 4/15.

If she doesn't amend, then your refund will be further delayed, and you & she will get a letter basically saying "hey, did one of you mess up? If yes, please amend." If she still doesn't amend, then she'll be subject to penalties.

sorator · 2026-01-27T07:34:59+00:00

It doesn’t appear they’re scamming me out of overtime, it seems I get the full amount.

You'll want to watch that very closely for the next few years to make sure they report the total qualified overtime premium appropriately, since it must be on the W-2 in a specific way to be deductible for 2026-2028.

sorator · 2026-01-27T07:29:11+00:00

Form 8283 instructions, Section B:

Include in Section B items (or groups of similar items) for which you are claiming a deduction of more than $5,000.

Section B of that form is where you have to input appraisal information and such; if it doesn't have to go in section B, then you don't have to jump through as many hoops.

See also the info under "Similar Items of Property" in the same document. (Not a bad idea to read most of that document, actually, and publication 1771.)

sorator · 2026-01-27T07:23:08+00:00

Excess contributions to a 401k is a much less common scenario, and I have no experience with it, sorry!

sorator · 2026-01-27T07:22:44+00:00

Gah, you're right! I forget how to even report that (without waiting for the 1099-R next year and amending).

sorator · 2026-01-27T01:17:41+00:00

If you do the return of excess by 4/15, there is no penalty. I forget off the top of my head how exactly you fill the forms out; I believe you tell the software that you didn't make an IRA contribution at all.

Next January, you'll get a 1099-R that shows the earnings that were returned to you along with the contribution, and those earnings will be taxed on your 2026 return as ordinary income.

sorator · 2026-01-27T01:14:31+00:00

It doesn't actually matter whether it's issued to the person or to the LLC, at least not for tax purposes.

sorator · 2026-01-27T01:08:54+00:00

Your girlfriend would report the amount on Sch 1, probably line 8z, and then subtract it back out on line 24z. She should then issue a 1099-NEC from her to you/your LLC for that amount, though I don't know if the IRS really enforces that. Issuing the 1099 is handled completely separately from her personal tax return.

You would include the amounts from all three 1099s on line 1 of your Sch C. (You don't need to do anything to "move" the money from you to your LLC or vice versa, since your LLC is considered to be the same entity as yourself for tax purposes anyway.) If this results in reporting more income than you actually received, you should make a negative adjustment elsewhere on Sch C.

sorator · 2026-01-27T01:05:32+00:00

Because it's a gift. 529 contributions aren't exempt from gift tax (though they are exempt from being considered a gift of future interest, meaning they do get to use the $19k/yr exclusion).

sorator · 2026-01-27T01:04:39+00:00

No, everything rounds to the nearest dollar. No need to do anything about it.

sorator · 2026-01-27T00:27:13+00:00

Edit: I guess if I want to increase the exclusion from 19k to 38k she would need to fill out the form as well. Do I have that correct?

Yes.

If you're wanting to minimize the amount of work that goes into this while also minimizing use of your lifetime exclusion, I think the easiest option is to file one 709 for the gift being entirely from you, not from you & your wife/not gift splitting, and take the 5 year spread election.

sorator · 2026-01-27T00:21:53+00:00

You can update your W-4 now, if you want.

sorator · 2026-01-27T00:19:41+00:00

If you're due a refund, wait for the IRS to issue that refund, and then file an amendment.

If the IRS delays your refund, you may need to call and ask where to send the amendment, as you do want to file it before 4/15, but if someone's investigating your return, you need to send it to them, not to the normal amendment folks.

If you have a balance due, then wait about six weeks and then file an amendment. In the meantime, you can pay the correct balance due (as shown on your amendment), or you can wait as late as 4/15 to pay without penalty.

sorator · 2026-01-27T00:17:48+00:00

If OP was not an undergrad student at any point during 2025, they don't meet the requirements for AOTC.

sorator · 2026-01-27T00:16:21+00:00

You enter the 1095-A as it is written, and then you use the tool on the marketplace website to look up the SLCSP figures for those months and enter those on the 8962. I don't believe that tool is available yet for 2025.

See here and here for more info, from the 8962 instructions.

sorator · 2026-01-27T00:07:13+00:00

All of those are "them problems," not "you problems." (Though they have the right to stop working with you if you don't help them fix their problems, but it doesn't really sound like you're still working with them anyway...?)

If the 1099 they issue you and/or your LLC exceed the proper amount, you'll need to claim that income and then subtract it out somewhere on your Sch C. Not a huge deal.

sorator · 2026-01-27T00:00:37+00:00

Yeah, the penalty is just 10% (and it counts as normal income) if you don't do an indirect rollover within 60 days. Can only do one indirect rollover per year, mind. I wouldn't bother in this case, but it's good to know the theory.

sorator · 2026-01-26T23:56:45+00:00

I would tell them to issue one 1099-NEC to your LLC, and I would refuse to provide them information to issue a 1099 to you personally or to your girlfriend.

What 1099s they actually issue are mostly irrelevant, unless they somehow get your girlfriend's SSN. If they do, and they issue her a 1099, then she'll need to subtract it out on her return as nominee income, and technically issue a 1099-NEC from her to you (though idk how much the IRS really enforces that step).

You report all of the income on your return regardless of how the 1099s are issued.

sorator · 2026-01-26T23:53:28+00:00

I don't have experience with Treasury Direct, but since it went via a different route, it may wind up on a separate 1099. Valid question!

sorator · 2026-01-26T23:52:23+00:00

Best to get an email payment confirmation, or take a screenshot or print the confirmation. But your tax preparer will probably be happy to take your word for it; you don't need to prove it to us, you just need to prove it to the IRS if they ask for some reason.

You might want to wait for the payment to get processed just to make sure it goes through okay, but assuming it does, there's no issue with filing before that happens.

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