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Thank you, so as I understand it, this is what I should see:   2023 Return - $3,850 in other income and 6% penalty (already amended and paid)   2024 Return - $248 earnings in other income, and no 6% penalty because all 2023 activity was withdrawn before 12/31/2024   I understand that I will have to pay the 20% penalty on the full $4,098. Can this be avoided (fully or partially) if I indicate that I used the distribution for medical expenses? As I understand it, even though I was ineligible for the HSA in the first place, I can still use these funds for medical expenses and avoid the 20%?

A lien payoff letter is a letter between a lender and a borrower that states that upon the satisfaction of certain conditions by the borrower (usually payment of a specified amount on a specified date), the lender will release its liens on all collateral securing the loan and all obligations of the borrower.   If this involves a closing on your home sale, it is used to ensure a proper payoff of your mortgage for closing. Sellers or closing agents must contact the lien holder or their attorney for an official payoff statement. This statement outlines the final payoff amount and includes details on principal balances, accrued interest, attorney's fees, and administrative costs.

Code 8 is for an overcontribution made and removed in the same year.  Code P is for an overcontribution from the prior year that is being removed in this year.  Use the code that is applicable to your situation.   If you have entered this information on your 2024 return then the 1099-R that you receive next year should match the fake one you're entering now.  As long as the numbers match you get to ignore it next year.   @markrocknroll 

Yes, you can e-file your amended return to the IRS and Oklahoma (OK) must be mailed according to the instructions. TurboTax will provide the instructions. Check out page 6 and 26 in the link below.  As indicated you can wait a short time, however if you will owe additional tax do not wait past April 15th to file your amendment. OK Form 511 Instructions @nananancy74008 

we cant see your return so look at the Qual Dividend and capital gain worlsheet.     in the tax calculation the LTCG does not come first to see if you're over the thresholds it comes last and taxable social security is taken into account before the capital gains   here's an over-simplified example 1) taxable income (line 15 of 1040) less qualified dividends and long-term capital gains 2) 94050 3) smaller of 1 or 2 4) line 2 less line 3  not less than zero. The QD and LTCG taxed at 0% 5) taxable income less line 2 taxed at 15%   a)lets assume taxable income 100,000 so line1 above 78,000 b) smaller of 1 or 2 is 1 or 78,000 c) 94050-78000 =16050 taxeda t zero d) 100000-94050 = 5950 taxe at 15%   This example shows that the amount of taxable income affects the portion of QD and LTCG that's taxed. Even though, in this example, it was below 47025 a portion gets taxed    

I reviewed your return. You entered a RMD amount required for the inherited Roth IRA larger than what is shown as distributed on Form 1099-R.    To clarify, did you not take your full RMD for the inherited Roth IRA? If not then you need to take it as soon as possible. If you take it soon you can say "Yes I took the entire remaining amount during the correction window". Also, you can request a waiver of the penalty if you have reasonable cause. Please see Relief for Reasonable Cause for additional information.   @jfschultz     

I’m in the same situation and will do this method to cancel out the dual reported income. My only question is, since it’s a large amount of overlapping income would this not trigger an audit? And if it does how do I justify the offsetting expense when it technically isn’t an expense 

The purchase of a business isn't a deduction, it's an investment.  You will have the purchase price of the business as your basis in the business along with any further investments that you will make.  When you sell the business somewhere down the road you will hopefully make a profit as well as earning money from the business in the intervening period.  There is no deduction for investing money.   However, during the operation of the business you do get to deduct depreciation on all of the equipment that you bought.  Enter the equipment into TurboTax and assign a portion of what you paid to each item.  Different items depreciate at different rates but you will deduct a portion of what you paid for the equipment over the next several years.     @checkengineautomotiveaz 

He can be claimed as a dependent for 2024.  As stated earlier, the parents can forego that (and the $500 other dependent credit) to allow him to claim the tuition credit. He still marks his return that he CAN be claimed as a dependent. He is not eligible for the refundable portion of the AOC.    You can add food to the rent in determining the amount of R&B paid in 2024.  The amount of R&B allowed, for the 1099-Q, is the lower of your actual costs or the school's allowance for cost of attendance (essentially what on campus students pay).   So, he does need to enter his 1099-Q.  Theoretically TurboTax (TT) can handle it. But mistakes are frequent. The bottom line for you is: what ever amount of  the $2049, in box 2, that ends up taxable (I rough estimate about $500+), will be wiped out by the increased tax credit ( TT should use the LLC instead of the AOC). If you get something different, reply back and we'll kook for a workaround. You should get a screen "Amount used to calculate education credit".  You have a special situation. I would start with $3000 in that box. You may have to adjust it.    Enter the 1099-Q before your enter the 1098-T.  You may have to delete both and start over.  For room and board, enter only the amount over $6659 (the amount allocated to the parent's 1099-Q). Enter your book expense.   Other things to be aware of: 1. The taxable portion of the 1099-Q is unearned income and the "kiddie tax" form 8615 will be generated.  2. Any self employment tax (line 23 of form 1040), from the independent contractor gig, will NOT be wiped out by the education credit.                                                                                                                         

Some of the situations that are now in TurboTax Deluxe, instead of in Free Edition, include: Unemployment income Retirement Savings Contribution Credit for 401(k) and IRA contributions Education credits Child Dependent Care Credit  

If you think you should be taking a distribution in December 2024 not for medical expenses in order to cut off the excess from 2023, then, yes, the 1099-SA should have in box 1 the total distribution, box 2 might as well have nothing, and box 3 should have "1".   You understand that any time that you change entries on a form that is copied to the IRS, that the IRS may write you can ask why, but it seems that you understand that you will have to document what you did and why. Please do not add any explanation to your return, since the IRS - at this time anyway - is not really capable of handling such things. It's enough that you will be prepared to respond to a query, if that ever happens.   And yes, I am ignoring the $0.78. In the big scheme of things, your distribution added to Other Income and the 20% penalty, will swamp any need to address that.