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"It would include the parent's home for the first part of the year and whatever household expenses (rent and utilities?) the child has after college through the end of the year." I don't think we know whether the grandson is still living with his parents or has moved out to his own place, or will move out before the end of the year. I don't recall any mention of where he is living now. Maybe he doesn't know himself whether he will move out before the end of the year, or how much it might cost. Another unknown!  

@Opus 17 @user17538710126    <<If your loan is forgiven, the amount that is forgiven is usually considered taxable income.  >>   through 2025, the amount forgiven is not taxable income per the ARPA law passed in 2021.  No extension was placed into the OBBB tax law that passed earlier this month, so beginning in 2026, unless Congress does something to extend the tax break, the forgiven loan amount will once again be taxable.   

@rjs I really appreciate your detailed, comprehensive and considerate responses.    somewhere along the way, I raised the same issue.  The OPs family needs to complete the Support Worksheet to have a defensible position, if ever audited, that the "kiddie tax" issue did not apply.  I totally agree with you.  

@bgoodreau01 what specifically on Lines 6-19 is not understood?   <<Thank you all for your time to help me understand. I did review Pub 501 and specidfically lines 6 thru 19. I guess I don't fully understand the difference between expense and support because both are used there, but I do understand the calculation of support and "yes" my grandson and his parents will complete Form 501.>>   all the expenses items discussed on lines 6-19 are part of "support".  Add up all the expenses items listed and the sum is "support"!  What difference is not understood?    Lines 6-12 determine the household expenses that are part of "support".   It's the child's fair share of the household costs under the IRS methodology.  It would include the parent's home for the first part of the year and whatever household expenses (rent and utilities?) the child has after college through the end of the year.    Lines 14-18 are self-explanatory.  These expenses are part of "support" as well.   It's what the parents pay to support the child PLUS what the child paid.  "other expenses" would include anything else not included in lines 14-18.  Note that any medical premiums deducted from his paycheck need to be added in here, etc.  The assessment of "expenses" is all encompassing.    Total support is line 19 and half of that is the critical number required (line 20).    if the child's earned income exceeds Line 20, then there is no "kiddie tax" filing requirement.  If Line 20 exceeds earned income, then there is a "kiddie tax" filing requirement.    If you follow the form, it is all straight forward.   Only completing the form will determine the "kiddie tax" filing requirement answer.  No one responding to your posts can.  

@bgoodreau01    With all the discussion of the minutiae of kiddie tax, we may have lost sight of the underlying question, which is whether your grandson should liquidate his entire $30,000 inherited IRA this year. (It might be more than $30,000 by the end of the year.) There's a risk we haven't mentioned that I think your grandson should consider. With $30,000 or more of unearned income, being under 24 and a student, and with relatively little earned income, if your grandson does not include kiddie tax on his tax return it might raise questions at the IRS. They could audit him as late as 2029, asking him to show why kiddie tax does not apply. If he concludes that his relatively low earned income is more than half of his total support for the year, he better have accurate, detailed, convincing records to show how he calculated his total support. If he is audited and the IRS doesn't accept his explanation, he will end up having to pay the kiddie tax plus penalties and interest. He has to weigh the possible tax savings this year against the risk of an audit. Has he calculated how much he would actually save in taxes?  

Firstly, if you are legally married, you can always choose to file jointly, as long as you agree, even if you filed separately last year.   Generally speaking, you pay more tax filing MFS (married filing separately) than MFJ, due to certain deductions and credits being limited or disallowed for MFS.  As a result, the withholding tables calculate slightly higher withholding when filing separately.  If you decide to file jointly, and don't change your withholding at all, you should probably expect a bit higher combined refund that you both received together last year.  If you both change your withholding to married filing jointly, you will have too little tax taken out, because you will both get credit for the joint standard deduction, even though you can only take it once.  The best way to calculate your withholding is to use this IRS calculator.  Use it once for your combined finances, and file your W-4s based on the result. https://www.irs.gov/individuals/tax-withholding-estimator   The student loan issue is more complicated.  In general, if you have applied for income based repayment and you file MFJ, your payment will be based on your joint income.  The only way to have your IBR payment calculated only on your income is to keep filing MFS.  (If you are not using IBR, your payment is just fixed based on how much you borrowed and your interest rate, of course.)   The problem with filing MFS to get a lower payment is that the end game is uncertain.  If your loan is not forgiven, then you just end up paying more over time.  If your loan is forgiven, the amount that is forgiven is usually considered taxable income.  So you could have a lower payment for 10 or 20 years, and then suddenly a huge tax bill when the loan is eventually forgiven.  And in the mean time, you are paying higher taxes every year, due to the limitations of filing MFS.  Those limitations become even more severe when you have children, because you can't qualify for the child care credit or EITC if you file MFS.  And the chances of loans being forgiven in the future, and whether those forgiven loans will be taxable or tax-free, depends on future politics.   So, filing MFS to have a lower loan payment through IBR is a bet on the future political climate of the US.  One way that things fall out is, you make smaller loan payments and eventually the balance is forgiven and you are free and clear.  (You pay higher taxes along the way, but save in the long run.) The other way things could fall out is your loan is not forgiven and hangs over your head forever, or is forgiven but taxable, and you still paid higher taxes along the way.    There are probably financial advisors who can help with this.  There's no one-size-fits-all answer.  

@bgoodreau01    All of your questions have been answered in earlier replies, but I'll go over it again 1. He will have "earned" income in excess of half the support his parents will have provided him this year, hence the kiddie tax does not apply. Is that correct? (...but his parents will have provided more than half that support). No that's not correct. To avoid kiddie tax his earned income has to be more than half of his total support for the year, not just the support that his parents provided. Surely he will have provided some of his own support, especially now that he is working.  Furthermore, we don't know whether his earned income will actually be more than half of his support. Until someone actually adds up all of his support, such as by completing the worksheet, we are not really sure how much it is. Also, you are making an assumption about how much his earned income will be for the year. There are still five months left in the year. Unexpected things could happen that increase or decrease his earned income. It's his actual earned income for the year that matters, not how much you think it will be based on what you know in July. 2. Because 1 above is true, then he is not required to complete form 8615. What is not clear is just because he does not have to complete Form 8615, does that in itself mean the kiddie tax does not apply? Well, as I just said, we don't know for sure that "1 above is true." Whether kiddie tax applies, and whether he has to file Form 8615, are the same thing. Form 8615 calculates the kiddie tax. If kiddie tax applies, he has to file Form 8615. If kiddie tax does not apply, he does not have to file Form 8615. If he has to file Form 8615, it's because kiddie tax applies. If he does not have to file Form 8615, it's because kiddie tax does not apply. 3. As it relates to the kiddie tax it does not matter if his parents claim him as a dependent (they will not claim him even though he meets the definition of a qualified dependent) but I have read elsewhere it is not "if they did/will", it matters "if they could" claim him. (By the way my tax accountant said because they don't claim him, that in itself means the kiddie tax does apply. I'm not so sure he is correct and that is why I went to this TT community for help). All of this concern about being a dependent is an unnecessary distraction. Being a dependent or not being a dependent has nothing to do with whether kiddie tax applies or whether Form 8615 is needed. Claim / not claim / meets the definition / did / will / could / don't is all irrelevant. It has nothing to do with kiddie tax. Your accountant is wrong. Whether or not the parents claim your grandson as a dependent has nothing to do with whether kiddie tax applies. Maybe you need a new accountant, preferably someone who can read the rules for kiddie tax. Thank you for your expertise and patience with me... My patience is wearing thin. You have gotten the same answers multiple times, from multiple people.  

It sounds like you've already filed and were assessed some sort of interest payment from Massachusetts.  If this is correct and you feel there was an issue with the software, please see this link for guidance on filing an Accurate Calculation Guarantee claim.

The original 42% was calculated by TurboTax in my TY2022 return, as it was the first year of the rental to start in Aug 2022.   TurboTax did not automatically adjust the busines usage to 100% for me in TY2023 & TY2024. Now I am manually making the adjustment. When I amended the TY2023, TurboTax was not prompted for 3115 and I could save and filed the 1040X in mail.   I am amending the TY2024, I am checking here if it's ok to ignore the missing form 3115 warning and go ahead to file 1040X. By doing it, will I am facing issue in Turbotax or audit when I start the filing for TY2025?

@wkassin wrote: Got it, I am going to sit tight until 10-15, one never knows if it will be addressed and to avoid the hassle of a return revision. In theory, Congress will be working on budget and finance bills in September.  You should know well before 10/15 if changes to the disaster loss rules are on the table or not.  

Thank you all for your time to help me understand. I did review Pub 501 and specidfically lines 6 thru 19. I guess I don't fully understand the difference between expense and support because both are used there, but I do understand the calculation of support and "yes" my grandson and his parents will complete Form 501. If I may I would like to confirm what I think you all have said and confirm the kiddie tax would "not" apply: 1. He will have "earned" income in excess of half the support his parents will have provided him this year, hence the kiddie tax does not apply. Isthat correct? (...but his parents will have provided more than half that support). 2. Because 1 above is true, then he is not required to complete form 8615. What is not clear is just because he does not have to complete Form 8615, does that in itself mean the kiddie tax does not apply? 3. As it relates to the kiddie tax it does not matter if his parents claim him as a dependent (they will not claim him even though he meets the definition of a qualified dependent) but I have read elsewhere it is not "if they did/will", it matters "if they could" claim him. (By the way my tax accountant said because they don't claim him, that in itself means the kiddie tax does apply. I'm not so sure he is correct and that is why I went to this TT community for help).   Thank you for your expertise and patience with me...

Again, it depends upon your specific situation and how the aircraft is being used.  As mentioned above, IRS Publication 946 gives more specific details on aircrafts and depreciation as it applies to business use. Please see this link for specific guidance within the publication which directly references business use or this section for specific guidance on noncommercial aircraft rules.   @mp565 

Typically, you wouldn't amend for a REV-1882 form since it is an informational form. It does not include any calculations that would change your tax return and would require an amendment. You can contact Pennie directly to discuss your options. 

Where do you see the terms "stock basis" and "tax basis"? Those are not common terms in relation to income tax. The usual term is just basis. You will also see "cost or other basis," which often gets shortened, somewhat illogically, to "cost basis." Basis is your cost for acquiring an investment or other asset. If you purchased the asset, your basis is the amount that you paid for it. When you sell the asset the difference between the amount that you sell it for and your basis determines your gain (profit) or loss. You report the selling price and the basis on your tax return for the year that you sell the asset. Other than that there is no reporting of any kind of basis, at least as far as income tax is concerned.  

Since you paid enough taxes to meet the thresholds specified, you should not owe penalties and interest on the underpayment of estimates. However, per the MI-1040 instructions, you may still owe interest on the amount of taxes due from the due date through the date the taxes were paid.