Will Turbotax do anything to fix the problem?
No. Because it is beyond TurboTax's control. It is Apple that is dropping support for older than 3 year OS's from the Apple Developer Tools that are necessary to compile new software that is compatible to the latest Apple release.
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So, will the IRS accept a written explanation of this if we claim $27,000 as a bad debt?
No - for several reasons.
1) it is not a"bad debt" since it does not involve a loan of money from you to the debtor. For it to be a "bad debt" you need to prove that you loaned money that you had previously earned and paid tax on. You can only deduct what was already once taxable. A "potential" inheritance can never be a bad debt.
2) Personal bad debts are no longer deductible (only business bad debts in the course of doing business are).
3) As stated in the other answers, this is basically a legal issue, not a tax issue. You should consult an estate attorney in your state. We cannot give legal advice here.
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Reject - no. The IRS probably does not even have your W-2 yet and they do not verify amounts until mid Feb or March, but if you filed with the wrong amounts you can be assured that the IRS will eventually be sending you a letter. They may or may not delay your refund (if any).
Did you already file with the wrong amounts?
You probably have *not* actually filed since the IRS will not open e-file until Jan. 27, but if you submitted it to TurboTax then see below: If you filed, it is like dropping it into the mail - you cannot get it back if accepted by the IRS or state. To amend your 2019 tax return: -- First, *wait* to see if your return has been accepted or rejected by the IRS or state. DO NOT do anything until you receive the accept or reject e-mail. -- If rejected, you can correct and re-send your return. -- If accepted you should *wait* until your return has been processed and you receive your refund or conformation that any tax due has been paid. (If you file an amended return while you first return is being processed it can cause extended delays for both returns if two returns are in the system at the same time). In addition, if the IRS makes any change on your original return, you might end up having to amend the amendment – a sticky process that can take a year or more). -- Then you can start the amend process. -- Amended returns can only be mailed - allow 8-12 weeks - can take up to 16 weeks (4 months) for processing. See this TurboTax FAQ for help with amending: https://ttlc.intuit.com/questions/1894381-how-to-amend-change-or-correct-a-return-you-already-filed You can check the status of your amended return here but allow 3 weeks after filing for it to show up: https://www.irs.gov/filing/wheres-my-amended-return
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There are several considerations to determine that, but if you were over age 18 at the end of 2019 and NOT a full time student for any part of 5 months (not necessarily consecutive) during 2019 then you cannot be claimed as a Qualifying child Dependent (test #2 below).
(If your parents is not provide more than half of your total support for the year then you also could not be a Qualifying Relative dependent).
---Tests To Be a Qualifying Child--- (Must pass ALL of these tests) NOTE: If a child passes all of these tests he must say “yes” on his/her own tax return (if he/she files one) that another taxpayer CAN claim him/her as a dependent even if they DO NOT claim him/her) 1. The child must be your son, daughter, stepchild, foster child, brother, sister, half brother, half sister, stepbrother,stepsister, or a descendant of any of them. 2. The child must be (a) under age 19 at the end of 2018, (b) under age 24 at the end of 2018 and a full-time student* for any part of 5 months of 2018, or (c) any age if permanently and totally disabled and must be younger than you (or your spouse if filing jointly). 3. The child must have lived with you for more than half of the year (There are exceptions for temporary absences such as school, illness, business, vacation, military service). 4. The child must not have provided more than half of his or her own support for the year. See Worksheet 3-1. Worksheet for Determining Support https://www.irs.gov/publications/p17#en_US_2017_publink1000171012 5. If the child meets the rules to be a qualifying child of more than one person, you must be the person entitled to claim the child as a qualifying child. 6. The child is not filing a joint return. 7. The child must be a U.S. citizen, U.S. resident alien, U.S. national, or a resident of Canada or Mexico *A full-time student is a student who is enrolled for the number of hours or courses the school considers to be full-time attendance during some part of each of any 5 calendar months of the year. See IRS Publication 17 for more information. https://www.irs.gov/publications/p17#en_US_2017_publink1000170876
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At this time of year most taxpayers have not even received their W-2's yet so they will not have the earned income to qualify.
Child care is "work related". It can only be claimed if the care was necessary so that you (and your spouse if married) could work. Both spouses must have earned income to qualify. Only if the child lived with you more than half the year *and* the care was required so that you could work is it allowed. If you did not live with the child or work at the time that the care was provided then it was not necessary so that you could work and therefore is not allowed. See IRS Pub 503. https://www.irs.gov/publications/p503#en_US_2018_publink100048433
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