This is really helpful information! I've been dealing with a similar excess contribution situation and was worried I'd have to withdraw everything including the earnings. One question I have - when you carry forward the excess contribution, do you need to file Form 5329 every year until the excess is "absorbed," or just for the first year? And is there any limit to how many years you can carry it forward? I'm also curious about the practical side - how do you track this on your own records? Do you just make a note that part of next year's contribution is actually the carried-forward excess from this year?

You need to file Form 5329 each year that you have an excess contribution until it's fully absorbed. So if you carry forward $3,000 excess and can only contribute $2,000 the next year, you'll still have $1,000 excess that requires another Form 5329 filing. There's no specific limit on how many years you can carry it forward, but you'll pay the 6% excise tax each year until it's resolved. For tracking, I keep a simple spreadsheet with: - Original excess amount - Year of excess - Annual 6% tax paid - Amount "absorbed" each subsequent year - Remaining excess balance When I make my regular Roth contribution each year, I subtract any carried-forward excess from my maximum allowed contribution. So if I have a $2,000 excess and the limit is $7,000, I can only contribute $5,000 in new money that year. Most tax software handles Form 5329 well once you know you need to file it. The key is entering the excess contribution amount correctly and making sure it carries forward to subsequent years until fully absorbed.

Anyone know if this is different in Quebec? I have a similar situation but with Revenu Quebec and they seem to have different rules for everything...

I went through almost the exact same situation last year with my first bit of freelance income. Here's what I learned from my tax preparer: You absolutely need to report the $520 income on your T2125 - there's no minimum threshold for reporting self-employment earnings. The good news is that with such a small amount, you likely won't owe any income tax on it due to the basic personal exemption. For the expenses without receipts, I'd strongly recommend NOT claiming them. I made the mistake of estimating some expenses my first year and it caused headaches later when CRA requested documentation during a routine review. It's better to miss out on legitimate deductions than risk issues with unsupported claims. One thing that helped me going forward was setting up a simple system: I use a dedicated email folder for all business-related receipts and confirmations, plus I take photos of physical receipts immediately. Even something as basic as a spreadsheet tracking expenses by date and category makes tax time so much easier. Since this is your first time with self-employment income, consider keeping better records even for small gigs - you never know when that side work might grow into something bigger!

Just a warning based on personal experience - make sure both of you aren't claiming 100% of the interest and taxes! My ex and I both claimed the full amount on our separate returns because we each got a 1098 showing the full amount, and it triggered an audit. Major headache that took months to resolve. We ended up having to amend both returns and split based on our actual payments (which was 50/50 in our case). The IRS was fine with the split once we documented it, but they definitely notice when the same address has double-claimed deductions.

Great question! I went through this exact situation two years ago with my partner. We split our mortgage payments 65/35 and were able to deduct the mortgage interest and property taxes in the same proportion on our federal returns. The key is documentation - keep clear records of who paid what. We set up separate automatic payments from our individual bank accounts to make the paper trail obvious. Your mortgage servicer should provide annual statements (1098 for interest, property tax statements) that you'll both receive, but you only claim your actual portion. One tip: consider whether itemizing makes sense for both of you. In our case, my partner's portion of the deductions plus their other itemizable expenses didn't exceed the standard deduction, so they took the standard deduction while I itemized and claimed my 65% portion. This worked out better tax-wise than if we had both tried to itemize smaller amounts. Also, keep a simple written agreement between yourselves documenting the payment split arrangement - it doesn't need to be fancy, just something showing you both agreed to the percentage breakdown. This helps if there are ever questions down the road.

One thing I'd add to the great advice already shared - make sure you get written documentation from the bank about the account structure. Ask them for a letter or official document that states you were a joint account holder with rights of survivorship (if that's what it was). This documentation could be valuable if you ever face questions from the IRS or need to prove the account's status. Also, consider opening a separate account and transferring the funds there rather than keeping them in the original account. This creates a cleaner paper trail and separates any future transactions from the original joint account history. Plus, you'll want to update the account to remove your aunt's name from any remaining documentation. The fact that you're being so careful about doing this right shows you're on the right track. Most people in your situation don't owe any federal taxes on joint accounts, but having proper documentation gives you peace of mind and protects you if any questions arise later.

I went through almost the exact same situation when my grandfather passed and I discovered I was on his checking account. The key thing that helped me was getting a copy of the original account signature card from the bank - this document showed exactly how the account was set up and whether it had survivorship rights. One thing I learned is that even though you didn't know about the account, the IRS treats joint ownership based on the legal structure, not your knowledge of it. Since you were already a legal owner, you're generally not receiving an "inheritance" in the taxable sense. However, I'd strongly recommend consulting with a tax professional or CPA, especially since $42,000 is a significant amount. They can review your specific situation and ensure you're handling everything correctly. The consultation fee is worth it for the peace of mind, and they can help you understand if there are any state-specific rules in your area that might apply. Also, don't feel rushed to make any decisions about the money right now. Take time to get proper advice and documentation first.

PSA: whoever you pick make sure to check their reviews on google first! And get a price estimate b4 they start working

Honestly might be worth checking if any of these places offer free consultations first. I've heard some will at least look over your docs and give you a rough estimate of complexity/cost before you commit. That way you can shop around without getting locked into their fees upfront.