I went through this exact same situation last year when I moved from California to Nevada! The key thing to remember is that you absolutely cannot modify the W2 yourself - that's considered tax document fraud. What worked for me was calling my employer's payroll department and explaining that the W2 shows the wrong state for where I actually performed work. I had to provide documentation of my move (lease agreement, utility bills) to prove I was a Nevada resident during the tax year. They issued a corrected W2-c within about 10 days. One tip: when you call, don't just say "I moved" - be specific that the STATE shown on the W2 is incorrect for where you physically performed your work duties. That helps them understand it's not just an address change but a tax withholding issue. Since Washington has no state income tax, make sure they didn't withhold any Oregon state tax from your paychecks either - if they did, you'll want that corrected too so you can get a refund from Oregon. The sooner you contact them the better, especially with the filing deadline approaching!

I just went through this exact same issue a few months ago! You definitely cannot change the W2 yourself - that's tampering with a tax document and can get you in serious trouble. You need to contact your employer's payroll department immediately and request a corrected W2 (Form W-2c). Since you moved in December 2023 and worked in Washington all of 2024, the W2 should definitely show Washington as your work state. The good news is that since Washington has no state income tax, you shouldn't have had any state tax withheld from your paychecks - double check your pay stubs to make sure they weren't taking out Oregon state tax all year. When you call payroll, be very specific that this isn't just an address change but that the WORK STATE is wrong on your W2. Have your documentation ready (lease agreement, utility bills) showing you lived and worked in Washington during 2024. Most employers are pretty good about fixing these once they understand the issue. If they drag their feet, you can file Form 4852 (Substitute for Form W-2) with your tax return, but getting the corrected W2 is definitely the cleaner solution. Don't let this delay your filing - start the process with your employer today!

Make sure to keep copies of both the original 401k provider's 1099-R AND documentation from Vanguard showing the rollover was completed. My friend got audited for exactly this situation and having both sets of documents made it super easy to resolve. The IRS just wanted to verify the money actually went into another retirement account.

Just to add some reassurance - I work in retirement plan administration and see this situation all the time. The key thing to remember is that if your 1099-R has distribution code G in box 7, the IRS already knows this was a direct trustee-to-trustee rollover. They're not going to come after you with penalties or anything dramatic. That said, you absolutely should amend to properly report it. The IRS has automated systems that match 1099 forms to tax returns, and eventually they'll send you a notice asking about the missing form. It's much easier to proactively amend than to respond to an IRS notice later. When you amend, you'll report the gross distribution on your 1040 but then show it as a nontaxable rollover, so your tax liability won't change. The amendment is really just about proper reporting compliance. FreeTaxUSA's amendment process is pretty straightforward once you have your refund in hand.

Has anyone tried the buy-borrow-die strategy? I've heard this is what billionaires actually do. You buy appreciating assets, borrow against them for living expenses (no tax), and when you die your heirs get the stepped-up basis (avoiding capital gains). Seems like it would work for dividend stocks too if you just reinvest all dividends and borrow for cash needs.

Another strategy worth mentioning is tax-loss harvesting paired with dividend reinvestment plans (DRIPs). The ultra-wealthy systematically harvest losses throughout the year to offset dividend income, but they do it strategically. Here's what many people miss: you can sell losing positions to harvest the loss for tax purposes, then immediately reinvest the proceeds into a similar (but not identical) security to avoid wash sale rules. This creates tax deductions that directly offset your dividend income. For your $8k in dividends, if you can harvest $8k in losses, you've effectively made your dividend income tax-free for that year. The key is maintaining a diversified portfolio specifically for this purpose - holding similar stocks or ETFs that you can swap between. I also recommend looking into qualified small business stock (QSBS) if you're entrepreneurial. Dividends from qualifying small businesses can be completely tax-free up to certain limits. It requires more active involvement but can be incredibly tax-efficient for the right person. The real game-changer though is understanding that tax optimization is a year-round strategy, not something you think about in April. Start tracking your unrealized gains and losses monthly so you can make strategic moves throughout the year.

I'm in a very similar situation with my 19-year-old son who's a college sophomore! He works about 25 hours a week at a local grocery store making roughly $1,000-1,200 per month, but I still cover his tuition, dorm fees, meal plan, health insurance, car insurance, and give him spending money for textbooks and other necessities. What really helped me understand this was realizing that the "support test" isn't just about income - it's about who actually pays for the major life expenses. Even though my son makes decent money for a college student, when I added up tuition ($18,000), housing ($12,000), meal plan ($4,500), insurance ($2,400), etc., it was clear I was providing well over 75% of his total support. One thing I learned the hard way - make sure you coordinate with your daughter about filing deadlines! My son filed his return before I did last year and forgot to check the "can be claimed as dependent" box. It delayed both our refunds because the IRS had to sort out the discrepancy. Now we file around the same time and double-check everything. The education credits are definitely worth it too. Between claiming him as a dependent and getting the American Opportunity Credit, I save about $3,500 annually on my taxes, which is way more than he would save by filing independently. It's really a win-win when you're already covering the majority of their expenses!

I just went through this exact situation with my 18-year-old daughter last year! Based on what you've described, you're absolutely right that you can claim her as your dependent while she files her own return. Since you're covering tuition, housing, food, medical insurance, phone bill, and other major expenses while she only makes $800-900/month (around $10,000-11,000 annually), you're clearly providing more than half of her support. The IRS looks at total support provided, not just income earned. Here's what worked for us: My daughter filed her own return for her part-time job income and checked the box indicating "Someone can claim you as a dependent." She still got back most of what was withheld from her paychecks as a refund. Meanwhile, I claimed her as my dependent and was eligible for education tax credits like the American Opportunity Credit, which saved me up to $2,500. One important tip - make sure your daughter updates her W-4 at work to indicate she's a dependent. This helps ensure proper tax withholding so she doesn't end up owing money at tax time. The bottom line is this arrangement actually benefits both of you financially when done correctly. You get the dependent deduction plus education credits, and she still gets her refund. Just make sure you both file correctly and coordinate so there are no discrepancies that could delay processing!

I think everyone is overlooking something important - if your daughter is a dependent on your tax return, her standard deduction is much lower than the regular standard deduction. It's limited to either $1,250 or her earned income plus $400, whichever is greater (but not more than the regular standard deduction). So with $2,700 in earned income, her standard deduction would be $3,100 ($2,700 + $400), which means some of her capital gains might be taxable! Make sure FreeTaxUSA is calculating this correctly.

You're absolutely right to be confused about FreeTaxUSA not recognizing the earned income! I went through this exact same issue with my nephew's landscaping income last year. The key is making sure you enter the dog sitting income in the right place. In FreeTaxUSA, you need to: 1. Go to Income → Business Income (Schedule C) 2. Enter "Pet Care Services" or similar as the business name 3. Report the $2,700 as gross receipts 4. Deduct any legitimate business expenses (supplies, mileage, etc.) Once you complete Schedule C, FreeTaxUSA will automatically calculate the self-employment tax AND recognize this as earned income for Roth IRA purposes. The software should then stop giving you errors about the Roth contribution. One thing to note - she'll owe about 15.3% self-employment tax on her net business income (around $413 if she has no deductible expenses), but this is separate from regular income tax. The good news is her total income is still under the standard deduction, so no regular income tax owed. The $1,422 in capital gains goes in the investment section and doesn't count toward Roth IRA eligibility, but it shouldn't push her into owing income tax either.