Is this still true with the changes to the child tax credit? I thought they made some modifications recently and wasn't sure if non-working parents still qualify the same way.

Yes, this is still true even with recent changes. For 2023 tax filing (which happens in 2024), the Child Tax Credit is $2,000 per qualifying child under 17. The credit is partially refundable even for non-working parents - up to $1,500 per child can be received as a refund through the Additional Child Tax Credit. Even with just SSI income and no other earnings, the mother in this situation would likely qualify for the refundable portion if she's the custodial parent. There were temporary expansions to the credit during COVID that have expired, but the basic structure allowing non-working custodial parents to benefit still exists.

This is what my sister had to do. Her ex claimed their kids even though they lived with her. She filed by paper, got letters from school showing the kids' address, and eventually got her refund. Took forever though - like 8 months. But at least she got the money eventually.

Oh my god, thank you! I had no idea that option existed. I was literally about to enter 156 separate transactions manually. When you say "same characteristics" - does that mean I can group all my long-term VOO purchases together, and then do a separate group for VTI, etc? Or do they need to all be the same stock to use this method?

Yep, exactly! You can group by security type - so one group for all your VOO long-term transactions, another for VOO short-term, another for VTI long-term, etc. Just make sure within each grouping they all have the same tax characteristics (same term length and whether basis was reported to IRS). The summary method is actually what most professional tax preparers use for clients with lots of trades. The IRS doesn't need to see every individual $10 fractional share purchase!

Thanks for this! I was literally losing my mind thinking about manually entering thousands of $0.03 transactions. Monthly aggregation sounds way more reasonable. Do you know if the monthly totals need to be reported as "Other Income" or as interest income? I've seen conflicting advice online.

The IRS hasn't given super clear guidance on staking specifically, but most tax professionals treat it as "Other Income" on Schedule 1, not interest income. Interest income is generally for fixed returns from lending, while staking is more like mining rewards (which the IRS has clearly stated is Other Income). Just make sure you're also tracking these rewards as your cost basis for when you eventually sell those tokens! That's where a lot of people mess up and end up paying double tax.

I never filed an amendment because I didn't realize the mistake until recently when I was going through old tax documents. Would it be worth filing one now even though it's past the 3-year window just to have it on record? Would the Tax Benefit Rule apply to capital gains from a home sale? I'm not super tax-savvy and trying to figure out if I should hire someone to help me fight this.

Filing an amendment now even though it's beyond the refund window could potentially help establish your good faith efforts to comply with tax law. While you won't get the refund, having it documented could support your case if you request penalty abatement for the current issue. The Tax Benefit Rule typically wouldn't apply directly to capital gains from a home sale in your situation. It's more relevant when you take a deduction in one year and then recover that expense in a later year. For your specific case, I'd recommend consulting with a tax professional who specializes in IRS disputes since there might be other strategies available based on your full tax history.

I used OIC last year for a similar situation and got my tax debt reduced by about 70%. But you have to qualify based on your income, assets, and ability to pay. It's not just available because you disagree with the assessment. And you'll need to be current on all your other tax filings to qualify.

Thanks for clearing that up! So there's no way to reorder the credits even with additional forms. That's disappointing but good to know. Do you know if adjusting withholding for next year would help maximize the use of carried-forward adoption credits? I'm trying to ensure we can use as much as possible of the carried forward amount.

Adjusting your withholding won't directly help you use more of the adoption credit, as that doesn't change your actual tax liability - it just changes how much is paid throughout the year versus at filing time. What could help is planning to have more taxable income in future years (if possible) or timing certain deductions differently. For example, you might consider deferring some deductions to a future year when you don't have as many credits, which would leave more tax liability for your adoption credit to offset. A tax professional could help you model different scenarios based on your specific situation to maximize the credit usage over the 5-year carryforward period.

That's really interesting! I hadn't considered filing an amended return. Did you have to provide additional documentation to support the changes? And approximately how long did it take for the amended return to be processed? I'm wondering if this approach might work for us too.

Thanks for the detailed list! I didn't realize payment processing fees were deductible - that's actually a significant amount for my business. Is there a good rule of thumb for determining what percentage of my internet and phone to deduct? I use both for business but obviously personal use too.

For internet and phone, you need to determine a reasonable business-use percentage. If you use your cell phone 70% for business and 30% personal, you can deduct 70% of those costs. Just make sure you can justify the percentage if asked. For payment processing fees, absolutely deduct them all! Those PayPal/Stripe/credit card fees add up quickly and are 100% legitimate business expenses. Don't forget the monthly fees plus the per-transaction percentages. Many new business owners miss these, but they can easily add up to thousands of dollars in deductions over a year.

I second this. Using a tax professional my first 2 years taught me how to properly do my taxes. Now I use TurboTax but actually understand what I'm doing. The education alone was worth the fee, and they likely will save you more than their cost.