I went through a very similar situation last year with foreign accounts from when I lived in the UK. Had about $45,000 across multiple accounts and was completely unaware of Form 8938 requirements for three years. Here's what I learned: First, don't panic about the $10,000 penalty - that's the maximum for willful violations. The IRS distinguishes between willful non-compliance (intentionally hiding assets) and non-willful failures (honest mistakes like yours). The Streamlined Filing Compliance Procedures that others mentioned is definitely your best path forward. I used it successfully and faced zero penalties. The key is being thorough in your reasonable cause statement - explain exactly how you were unaware of the requirement, mention that you discovered it through tax software, and emphasize that you're proactively coming forward to correct the issue. One practical tip: gather all your foreign account statements for the past 3 years before you start. You'll need detailed records of account balances, opening/closing dates, and maximum balances during each year. The process took me about 2 months to complete, but the peace of mind was worth it. Also remember that working abroad in Singapore actually strengthens your non-willful case - many expats aren't properly informed about ongoing US tax obligations while living overseas. Document that context in your statement.

I want to add another perspective as someone who went through this process recently. While everyone's focusing on the Streamlined procedures (which are definitely the right approach), I want to emphasize how important it is to be completely accurate about your account balances and dates. The IRS has access to foreign account information through FATCA reporting from banks, so any discrepancies between what you report and what they already know can seriously undermine your "non-willful" claim. When I filed my Streamlined package, I triple-checked every balance and date because inconsistencies could make it look like you're still trying to hide something. Also, don't forget about investment accounts, not just bank accounts. I initially missed a small brokerage account in Singapore that had about $8,000 in it because I was focused on my main savings accounts. Even though it was under various thresholds individually, it still counted toward my total foreign assets for Form 8938 purposes. The key is being thorough and consistent in your documentation. If you're missing any account statements, request them now - it's better to delay your filing slightly than to submit incomplete information that could raise red flags later.

Make sure you're considering the age factor in your conversion strategy. If you're under 59½ when you do the conversion and plan to access any of the converted funds within 5 years, you could face penalties on those withdrawals. Each conversion has its own 5-year clock for penalty-free access to the PRINCIPAL amount converted. This is separate from the 5-year rule for earnings.

One additional consideration for your multi-year conversion strategy - don't forget about the impact on your Medicare premiums if you're approaching age 65 or already enrolled. The additional taxable income from your Roth conversions could push you into higher IRMAA (Income-Related Monthly Adjustment Amount) brackets, which would increase your Medicare Part B and Part D premiums. These surcharges are based on your modified adjusted gross income from two years prior, so a large conversion in 2025 would affect your 2027 Medicare premiums. You might want to model different conversion amounts to see how they impact not just your current tax brackets, but also your future Medicare costs. Sometimes spreading the conversions over 4-5 years instead of 3 can help you stay below the IRMAA thresholds while still achieving your goal of converting to Roth.

This exact situation happened to my brother and his wife! They got married in September 2023 and he filed HOH thinking it was fine since he'd always done it that way with his son. Big mistake - the IRS caught it within about 6 weeks and sent them a notice. The good news is they were able to fix it pretty easily with Form 1040-X (amended return). Since they caught it early and were proactive about correcting it, there were no penalties. The IRS agent they spoke with said they see this mistake a lot with newly married couples who don't realize the rules change immediately. Just make sure your husband files the amendment before you submit your return, otherwise the IRS computer systems will flag the mismatch between his "single/HOH" status and your "married" status. That could trigger both returns for review which you definitely want to avoid.

The key thing to understand is that your filing status is determined by your marital status on December 31st of the tax year. Since you got married in June 2023, you're both considered married for the entire 2023 tax year - no exceptions. Your husband definitely needs to file an amended return (Form 1040-X) to change from Head of Household to either "Married Filing Separately" or you'll need to file jointly. Head of Household is only available to unmarried individuals or those who meet very specific "considered unmarried" criteria (which requires living apart for the last 6 months of the year, among other requirements). The IRS will eventually catch this discrepancy when their systems cross-reference your returns, so it's much better to proactively fix it now. File the amendment before you submit your return to avoid triggering automatic flags. Most people in your situation don't face penalties if they correct the error voluntarily and promptly. You might want to run the numbers both ways (joint vs separate) to see which gives you the better tax outcome as a couple before deciding how to proceed.

One thing nobody's mentioned yet - if he takes the 1099 job, he should factor in the cost of liability insurance! As a 1099 contractor, especially in anything medical-adjacent, he might need professional liability coverage that the W2 employer would otherwise provide. I learned this the hard way and ended up paying $1,200/year for basic coverage.

Based on all the factors mentioned here, the W2 position at $37/hour is clearly the better financial choice for your husband. Here's why: 1. **Tax burden**: As others noted, 1099 contractors pay both sides of FICA taxes (15.3% self-employment tax), while W2 employees only pay half. 2. **Benefits value**: You mentioned the W2 includes health insurance ($520/month saved = $6,240/year), 5 days PTO (~2% of annual salary), and 2% 401k match. That's easily $8,000+ in additional value annually. 3. **Hidden costs**: 1099 work may require liability insurance, disability coverage, and other protections that W2 employment typically includes. 4. **Administrative simplicity**: W2 means less quarterly tax planning, simpler record-keeping, and reduced audit risk. When you factor in the benefits package alone, you're essentially comparing $41+ effective hourly rate (W2 with benefits) versus $40 (1099 with additional tax burden and no benefits). The math strongly favors the W2 position, especially since he's already maintaining his primary 1099 work for that entrepreneurial flexibility.

One thing nobody's mentioned - make sure you're also tracking all the utilities, repairs, insurance, etc. that you've paid since separation. If you itemize deductions, those costs help establish that you paid "more than half the cost of keeping up the home" which matters for HOH status. My accountant had me create a simple spreadsheet with every home-related expense after my ex moved out. This documentation really helped support my tax position and prevented any disputes. Just a quick tip from someone who's been there!

I went through almost the exact same situation two years ago. One crucial thing to keep in mind is that even though his name is on the mortgage, the IRS looks at who actually made the payments when determining who can claim the deductions. Since you have a court order giving you exclusive possession and you've been making all payments from your individual account since April, you have a strong case for claiming those deductions for the period after separation. For the joint payments made January-March, you'd typically divide based on your contribution percentage to that joint account (your 35%). Also, definitely explore the Head of Household filing status that others mentioned - it can save you significant money compared to married filing separately. The combination of HOH status plus claiming the mortgage interest and property tax deductions you actually paid could result in substantial tax savings. Keep detailed records of every payment you've made since the separation. Bank statements, online payment confirmations, everything. This documentation will be invaluable if there are any disputes or if the IRS has questions later.