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I will ask her POA/Trustee to update her State of Residence to NJ while maintaining her Mailing as PA.  The POA/Trustee is not at this point going to contact all financial institutions and have them retroactively change 2025 residence and any state withholding to NJ. How do I handle the amending State, especially for the 1099-R where taxes were already withheld for PA? One note: PA does not tax qualified IRA distributions so the PA withholding on that 1099-R was all to be refunded on the PA return already filed. 1) Amend State and move *all* income to NJ Resident, even for the 1099-R that had PA withholding, and then 2) For the 1099-R which had PA withholding, take a credit on the NJ return for taxes already paid to PA, 3) Change the PA return, already filed, to Non-Resident and *only* report the 1099-R income and taxes withheld as "PA source income"). (This seems like I would be double-taxed on the 1099-R.)  

Q.  Isnf the recipient whoever is on the 1099-q? So it’s whether it went straight to the school (1099 reported to student) or you withdraw -1099 names you. )  is that right? A. Yes.  But, at the time that you make the withdrawal, you get to decide where the distribution will be sent. You tell the plan administrator to send it to you, the beneficiary or direct to the school. ____________________________________________________________________________________________ Qualified Tuition Plans  (QTP 529 Plans) Distributions General Discussion It’s complicated. For 529 plans, there is an “owner” (usually the parent), and a “beneficiary” (usually the student dependent). The "recipient" of the distribution can be either the owner or the beneficiary depending on who the money was sent to. When the money goes directly from the Qualified Tuition Plan (QTP) to the school, the student is the "recipient". The distribution will be reported on IRS form 1099-Q.  The 1099-Q gets reported on the recipient's return.** The recipient's name & SS# will be on the 1099-Q. Even though the 1099-Q is going on the student's return, the 1098-T should go on the parent's return, so you can claim the education credit. You can do this because he is your dependent. You can and should claim the tuition credit before claiming the 529 plan earnings exclusion (unless your income is too high).  The American Opportunity Credit (AOC or AOTC) is 100% of the first $2000 of tuition and 25% of the next $2000 ($2500 maximum credit). The educational expenses he claims for the 1099-Q should be reduced by the amount of educational expenses you claim for the credit. Room and board (R&B) are also qualified expenses for the 529 distribution, but not the AOC (R&B are also not qualified expenses for a scholarship to be tax free). But be aware, you can not double dip. You cannot count the same tuition money, for the tuition credit,  that gets him an exclusion from the taxability of the earnings (interest) on the 529 plan. Since the credit is more generous; use as much of the tuition as is needed for the credit and the rest for the interest exclusion. Another special rule allows you to claim the tuition credit regardless of whose money was used to pay the tuition. In addition, there is another rule that says the 10% penalty is waived if he was unable to cover the 529 plan withdrawal with educational expenses either because he got scholarships or the expenses were used (by him or the parents) to claim the credits. He'll have to pay tax on the earnings, at his lower tax rate (subject to the “kiddie tax”), but not the penalty.   Total qualified expenses (including room & board) less amounts paid by scholarship less amounts used to claim the Tuition credit equals the amount you can use to claim the earnings exclusion on the 1099-Q.  Example:   $10,000 in educational expenses (including room & board)    -$3000 paid by tax free scholarship***    -$4000 used to claim the American Opportunity credit  =$3000 Can be used against the 1099-Q (on the recipient’s return)   Box 1 of the 1099-Q is $5000 Box 2 is $2800 3000/5000=60% of the earnings are tax free; 40% are taxable 40% x 2800= $1120 There is  $1120 of taxable income (on the recipient’s return)   **Alternatively; you can just not report the 1099-Q, at all, if your student-beneficiary has sufficient educational expenses, including room & board (even if he lives at home) to cover the distribution. You would still have to do the math to see if there were enough expenses left over for you to claim the tuition credit. Again, you cannot double dip!  When the box 1 amount on form 1099-Q is fully covered by expenses, TurboTax will enter nothing about the 1099-Q on the actual tax forms. But, it will prepare a 1099-Q worksheet for your records, in case of an IRS inquiry. On form 1099-Q, instructions to the recipient reads: "Nontaxable distributions from CESAs and QTPs are not required to be reported on your income tax return. You must determine the taxability of any distribution."  ***Another alternative is have the student report some of his scholarship as taxable income, to free up some expenses for the 1099-Q and/or tuition credit. Most people come out better having the scholarship taxable before the 529 earnings. A student, with no other income, can have up to $15,750 of taxable scholarship (in 2025) and still pay no income tax.     

No, legal fees to setup a Grantor Trust aren't deductible.  These fees are considered personal expenses and are not deductible even if reported on a grantor letter.  Fees paid to an attorney to create the trust are considered capital expenses, not expenses for producing income, and are not deductible.

Yes. As a California resident, you are taxed by California on all your income, regardless of where you earned it. You will report your wages on a California resident state tax return.    Since Washington doesn't have a state income tax on wages, you won't need to file a tax return for wages earned there.    CA Residents 

No, you won't be penalized for amending your return to add the overtime deduction.   If you are expecting a refund, we recommend that you wait to amend until after the IRS has processed your original return and you have received your refund.   To amend your tax return, please read this TurboTax article.    Please note that the amendment form 1040X will only be available in TurboTax after 2/25/2026.  

If you are using TurboTax Online, you cannot prepare and file a tax return for another person using an existing TurboTax account. You'll need to create a new account for to file for another person.   In TurboTax Online, you cannot work on more than one return at the same time. You have to log out of the first return, and log in the other account.   If you are using TurboTax Desktop, you can start a new return for yourself by clicking on Start a new return on the Welcome page of TurboTax.   Please read this TurboTax Help topic on how to start a new tax return for another person.

After editing my 1099-DIV with foreign income and taxes paid declared by $1 (less), I fill out the carryback input (either AMT carryback from 2025, or regular), but the tax credit is not applied -- I see amount due of $1 for the amended 2024 federal return when carryback is from AMT, and an amount due of >$180 if the carryback from 2025 is not AMT (less than the expected credit).  I was able to switch the 2024 return to use the simplified AMT election for foreign tax credit. Is that the reason?   I asked the AI helper on the right sidebar of turbotax online, and got this answer: "TurboTax Online primarily supports amendments with visible direct changes. For complex carryback entries that do not alter prior year amounts, specialized entries or forms might require manual review or using TurboTax Desktop for more detailed control. This means you potentially could encounter limits in TurboTax Online for this specific carryback treatment without modifying the 2024 foreign tax figures." Will try phone support today, but I have been trying adamantly for a week, and I may have to use H&R or another service, it is starting to look like.