Has anyone had experience with the 10-year rule for inherited annuities? My spouse inherited an annuity and we're trying to figure out if we need to take all the money within 10 years or if different rules apply for non-spouse beneficiaries?

I went through something very similar when I inherited my father's annuity last year. The key thing that helped me was understanding that you need to look at Box 7 on your 1099-R for the distribution code - this tells you exactly how the IRS expects it to be reported. For inherited annuities, you'll typically see code "4" which indicates a death benefit distribution. In TurboTax, when it asks about qualified vs non-qualified, since this was likely a personal annuity your mom bought (not through an employer plan), it's probably non-qualified. The tricky part is the basis calculation. Since you mentioned she opened it in 1997, there's likely been significant growth over the years. If Prudential shows the full amount as taxable on the 1099-R, I'd definitely recommend calling them to ask about the original investment amount (cost basis) like others have suggested. This could save you thousands in taxes. Also, make sure you understand that this will be taxed as ordinary income, not capital gains, so it could potentially bump you into a higher tax bracket depending on your other income. You might want to consider if there are any tax planning strategies for next year to offset this additional income.

Something similar happened to me last year, but it wasn't just mixing up W-2s - I completely forgot to include one from a short contract job! Didn't even realize until I got a scary letter from the IRS. Does anyone know if tax software like TurboTax or H&R Block flags potential missing W-2s? I'm paranoid about making this mistake again.

I've been through this exact situation before! When I had multiple W-2s and mixed up the employer information, I was panicking about the $1,800 difference too. Here's what I learned: the IRS matching process happens automatically, but it can take several months after you file. If there's a discrepancy between what you reported and what your employers submitted, you'll get a CP2000 notice. However, don't wait for that if you know you made an error. File Form 1040-X as soon as possible. The key thing to remember is that even if you switched which employer was which in your tax software, as long as the TOTAL wages and withholdings are correct, the impact might be smaller than you think. The big issues usually come from missing income entirely or major errors in withholding amounts. I'd recommend pulling your wage and income transcript from IRS.gov to see exactly what your employers reported, then compare that to what you filed. This will show you the exact discrepancy and help you decide if an amendment is really necessary.

I'm dealing with a very similar situation with my grandmother who moved in with us last year. She's married to my grandfather and they want to file jointly, but I'm covering most of their living expenses since they're on a fixed income from Social Security. After reading through all these responses, it sounds like the key is whether they would have zero tax liability if filing separately. In my case, their combined Social Security is about $16,000 annually, so they likely wouldn't owe any taxes filing separately either. One thing I'm wondering about - do I need to calculate the support test for each parent individually, or can I look at their combined expenses? For example, if I'm paying $1,200/month for their housing costs, do I split that between them when calculating whether I provide more than 50% support for each one? Also, has anyone had experience with the IRS accepting utility bills and grocery receipts as documentation? I've been keeping everything, but I want to make sure I'm tracking the right types of expenses in case I get audited.

I've been through this exact scenario with my parents who moved in with me two years ago. The good news is that you can absolutely claim your mother as a dependent while your parents file jointly, as long as they meet that joint filing exception everyone mentioned. One piece of advice I wish I'd gotten earlier - start documenting your support contributions NOW if you haven't already. I learned this the hard way when the IRS requested documentation. Create a simple monthly expense tracker that includes: - Housing costs (use fair rental value for the space they occupy - I calculated what a 2-bedroom apartment would rent for in my area and divided by the bedrooms in my house) - Utilities (divide by number of household members) - Food expenses (keep grocery receipts and estimate what portion goes to them) - Medical expenses you pay on their behalf - Transportation costs if you drive them places - Any other support like clothing, personal care items, etc. The 50% support test can be tricky to calculate, but with your parents' income at $13,500 combined, you're likely well over the threshold. Just make sure you're calculating it correctly - their total support includes what YOU provide plus what THEY provide for themselves from their own income. Also, don't forget that claiming them as dependents might make you eligible for additional tax benefits beyond just the dependency exemption. If you're paying medical expenses for them, that could potentially push you into itemizing territory depending on your other deductions. Good luck with your tax situation!

I'm going through the exact same thing right now! Got code 960 about 5 weeks ago and it's been radio silence since then. Reading everyone's experiences here is actually making me feel a bit better - at least I know I'm not alone in this waiting game. The interest payment is a nice consolation prize I guess, but man I really needed that refund for some unexpected car repairs. Has anyone here tried calling the IRS directly about a 960 code or is it pretty much just a waiting game until they're done with their review?

I'm dealing with code 960 too and it's been about 7 weeks now. One thing I learned from my tax preparer is that you can request a "case transcript" by calling the IRS which sometimes shows a bit more detail about what specific issue they're reviewing - though like others said, calling doesn't speed things up. Also wanted to mention that if you're really strapped for cash while waiting, some credit unions offer small emergency loans at decent rates that might tide you over better than those refund advance places that can have pretty high fees. The waiting absolutely sucks but at least we'll get that interest when it finally comes through!

This is so incredibly frustrating and I feel your pain! I had the exact same experience last month - waited 2.5 hours to finally get through, started giving my verification info, and then complete silence. The agent just vanished mid-conversation while I was reciting my AGI. I called back immediately and got the "all circuits are busy" message for the rest of the day. What finally worked for me was calling at exactly 7:00 AM on a Tuesday morning. I know it sounds crazy to wake up that early, but I got through in just 35 minutes instead of the usual multi-hour nightmare. The moment the agent picked up, I said "Hi, before we begin - can you confirm this connection is stable? I've been disconnected twice this month during verification and really need to complete this today." The agent was actually super understanding and said they see this constantly. She immediately put a note in my account about the previous disconnection issues, which she said would help if it happened again. I had everything written down beforehand - SSN, last year's exact AGI, filing status, refund amount - and was able to rattle it all off in under 2 minutes without any pauses. Got my verification completed successfully and my refund was deposited 6 days later! The early morning timing really does seem to make all the difference - their ancient phone system is way more stable when fewer people are calling. Don't give up on that $3,400 - it's your money and you WILL get it eventually!

I'm so sorry you're dealing with this - the IRS disconnection issue is absolutely maddening! I just went through the exact same thing last week. Got hung up on twice while trying to verify my identity for a delayed refund, and I was about ready to lose my mind. What finally worked for me was calling at exactly 7:00 AM on a Wednesday. I know it sounds awful to wake up that early, but I got through in about 40 minutes instead of the usual 2+ hour wait. The connection seemed much more stable in the early morning. Here's what I did differently: The moment the agent picked up, I immediately said "Hi, before we start verification - can you confirm this connection is stable? I've been disconnected twice this week and really need to get this resolved." The agent was actually very understanding and said they see this constantly due to their outdated phone system. I also had everything written down beforehand - SSN, exact AGI from 2023, filing status, and expected refund amount. When she asked for verification info, I was able to give it all quickly without fumbling around looking for documents. She even made a note in my account about the previous disconnections, which she said would help if I got cut off again. My verification was completed in under 5 minutes and my refund was released within a week! The early morning timing really does seem to make all the difference. Don't give up on that $3,400 - it's rightfully yours and you'll get it eventually. Try calling right when they open tomorrow and you should have much better luck!