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You're handling this transition really well! As a newcomer to this community, I wanted to share some additional insights that might be helpful for your situation. One thing I don't see mentioned yet is the importance of keeping detailed records of your moving expenses and the timeline of when you actually started living in each property. While moving expenses aren't generally deductible anymore for most people, having clear documentation of when you physically moved can be crucial for establishing your primary residence timeline. Also, since you mentioned it's taking longer than expected to prep your old house for sale, consider whether any of the preparation costs (like staging, repairs specifically for sale, or real estate commission) might affect your capital gains calculation when you do sell. While you'll likely qualify for the exclusion as others mentioned, it's still worth tracking these selling expenses as they can reduce your taxable gain. The temporary two-home ownership is definitely normal during transitions - I've seen this situation frequently, and you're approaching it correctly by being thorough with your documentation and asking the right questions. Keep doing what you're doing!
Welcome to the community! Your point about documenting the physical move timeline is really smart - I hadn't considered how important that could be for proving primary residence status. Since I've been gradually moving my belongings over several months, I should probably note key dates like when I started sleeping there regularly and when I moved my main furniture. The selling expense tracking is also a great tip. I've been focused on the capital gains exclusion, but you're right that keeping track of staging costs, repairs, and commission could still be valuable. Even if I don't end up needing those deductions, having organized records will make the whole process smoother. Thanks for the reassurance about this being a normal transition situation. Sometimes when you're in the middle of it, it feels more complicated than it probably actually is from a tax perspective!
As a newcomer here, I wanted to add something that might be helpful for your situation. Since you mentioned using TurboTax, make sure you're taking advantage of the interview process to capture all the nuances of your two-property situation. One thing that often gets overlooked is that you can deduct property taxes paid on both properties during the overlap period, but you need to be careful about the timing. Make sure you're only deducting the property taxes you actually paid in 2024, not what was assessed or due. If you paid some 2025 property taxes in late 2024 (which sometimes happens with tax bills), those can be deducted in 2024 too. Also, since you owned the old house outright, double-check that you're not accidentally trying to claim mortgage interest on a property with no mortgage - it sounds like you've got this right, but it's a common mistake when people are juggling multiple properties in tax software. The gradual transition approach you're taking (moving slowly while preparing the old house for sale) is actually ideal from a tax perspective because it creates a clear timeline showing your intent to make the new house your primary residence. You're definitely handling this correctly!
Welcome to the community and thanks for the helpful reminders! Your point about property tax timing is really important - I need to make sure I'm only deducting what I actually paid in 2024, not what was assessed. I think I'm handling this correctly, but I'll double-check my records to be sure about the payment dates. You're absolutely right about not claiming mortgage interest on the paid-off property - that would be a costly mistake! Since I own the old house outright, I can only deduct the property taxes I paid on it, while the new house with the mortgage gives me both mortgage interest and property tax deductions. It's reassuring to hear that my gradual transition approach actually works in my favor tax-wise. I was worried that not having a clear "moving day" might complicate things, but it sounds like having a documented timeline of the transition is actually beneficial for establishing primary residence status.
I see you have both an 810 freeze and 570 pending action code - that's a double hold situation that unfortunately means your refund is stuck until the IRS completes their review. The good news is your credits are already calculated and scheduled to post on 4/16-4/17, so once the review clears, your refund should process quickly. With the EIC and those credit amounts, the IRS is likely doing income verification. Keep checking your transcript weekly for a 571 code (which releases the 570) or any updates to the 810 freeze. The wait is frustrating but your refund isn't lost, just delayed while they verify everything matches up.
I've been through this exact situation before! The combination of codes 810 and 570 means your return is in what we call "manual review status." The IRS flagged it for additional verification - likely because of the substantial EIC and credits totaling over $14,000. Here's what helped me during my wait: 1) Check your transcript every Friday morning when they update, 2) Don't call the IRS unless it's been over 120 days from your 570 date (they'll just tell you to wait), and 3) Make sure all your documents are ready in case they send a correspondence requesting verification. The timeline is typically 6-16 weeks from the 570 date for EIC reviews. Your cycle code suggests you should see movement by late April/early May. I know the wait is brutal, but hang in there - once it clears, you'll get your full refund amount!
This is super helpful, thank you! Question about checking the transcript - do you recommend checking on IRS.gov or is there a better way to monitor for updates? Also, did you end up getting any correspondence from the IRS during your review or did it just update automatically on the transcript? I'm trying to figure out if I should be watching my mail too š¬
The market's been crazy lately... I put $7k in VOO last year and it's up like 22%. If I don't sell, no taxes right? But what about next year if I need some of this money? How do I figure out which shares to sell to minimize taxes?
Most brokerages let you choose which shares to sell using different methods like FIFO (first in, first out), LIFO (last in, first out), or specific identification. If you want to minimize taxes, you usually want to sell the shares with the highest cost basis first, which means the ones you bought at higher prices. That way you have less gain to pay taxes on. Robinhood should give you these options when you sell.
Great question! You're absolutely right - no taxes on unrealized gains. You only pay taxes when you actually sell shares and "realize" the gain. So if your VOO investment goes from $6,500 to $8,000 by year end but you don't sell, you owe $0 in taxes on that growth. Just keep in mind that VOO does pay quarterly dividends (currently around 1.3% annually), and those ARE taxable even if you automatically reinvest them. But the dividends from VOO are typically "qualified dividends" which get taxed at the lower capital gains rates (0%, 15%, or 20% depending on your income) rather than your ordinary income tax rate. When you do eventually sell, if you've held the shares for more than a year, you'll pay long-term capital gains tax on any profit, which is usually much better than short-term rates. VOO is a solid choice for a beginner - low fees and broad market exposure. Good luck!
This is really helpful! I had no idea about the dividend taxation even with reinvestment. So just to make sure I understand - if VOO pays out $85 in dividends this year (1.3% of $6,500) and I have them automatically reinvested, I'd still owe taxes on that $85 even though I never touched the money? And these would be taxed at the lower capital gains rate assuming they're qualified dividends? That's actually not too bad compared to what I was worried about with the unrealized gains!
Has anyone used TurboTax or H&R Block for filing US taxes from Canada? I'm wondering if the regular versions work or if I need something special for expat taxes.
I've used TurboTax but you need the premium version to file foreign income and exclusions. It's a bit pricey and doesn't handle some of the more complex expat situations well. I switched to using a specialized expat tax service last year.
I was in a very similar situation a few years ago - US citizen living in the UK with no income for several years due to health issues. The anxiety about being "in trouble" with the IRS was really overwhelming! Here's what I learned: Yes, technically you should file even with zero income, but the IRS is generally understanding about people who genuinely didn't know about the requirement, especially when no taxes are owed. The key is getting compliant going forward. Since you have no income, you likely qualify for the Streamlined Filing Compliance Procedures, which is designed for people in exactly your situation. You'll need to file the last 3 years of tax returns (even if showing zero income) and 6 years of FBARs if you have Canadian bank accounts over $10k. The good news is that with zero income, you won't owe any taxes or penalties. I'd recommend getting professional help just to make sure everything is filed correctly and to give you peace of mind. Don't let the anxiety eat at you - this is much more common than you think and very fixable!
Thank you so much for sharing your experience! It's really reassuring to hear from someone who went through the exact same situation. The anxiety has been keeping me up at night ever since I found out about this requirement. Can I ask - when you filed under the Streamlined Filing Compliance Procedures, did you need to provide any documentation about why you didn't know about the filing requirement? I'm worried about having to prove that our immigration lawyer never mentioned it or that I genuinely had no idea. Also, you mentioned getting professional help - did you use a regular tax preparer or someone who specializes in expat taxes? I'm in a small Canadian town and I doubt the local H&R Block would know much about US expat requirements.
Jake Sinclair
If ur making under $5000 dont even bother filing tbh. I didnt file for 3 years when I was doing odd jobs and nothing happened. The IRS doesnt care about small amounts.
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Brielle Johnson
ā¢This is terrible advice. If you make $400+ in self-employment income, you legally need to file. Plus the original poster specifically wants to contribute to a Roth IRA, which requires filed tax returns showing earned income. Not filing when required can bite you years later with penalties and interest.
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Jake Sinclair
ā¢OK fine but lets be real here - the chance of getting audited on a tiny bit of side income is basically zero. My CPA friend says the IRS is focused on bigger fish. But yes if u want to do the Roth thing u probably need to file. But also the penalties would be tiny on such a small amount if they ever did notice, which they wont. Just saying its not worth stressing about.
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Zara Mirza
As someone who went through this exact same situation when I was 20, I want to emphasize a few key points that might help you feel more confident about the process: First, don't stress too much about perfect record-keeping for this past year - the IRS understands that many people doing casual work don't have pristine records. Make your best good-faith estimate of your total income and document how you arrived at that number. For your Schedule C, you can deduct reasonable business expenses even without perfect receipts - things like tennis balls, equipment, gas money for traveling to lessons, etc. Just be reasonable and honest. Going forward, definitely set up better tracking. I use a simple spreadsheet with columns for date, student name, amount, and method of payment. Takes 30 seconds per lesson and saves hours during tax season. One thing I wish someone had told me: even though you'll owe self-employment tax (about 15.3% on your net profit), you'll likely get most or all of your income tax back due to the standard deduction. So don't panic about owing huge amounts. The Roth IRA is absolutely worth it at your age - compound growth over 40+ years is incredible. You're making a really smart financial decision here!
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Lim Wong
ā¢This is really helpful advice! I'm in a similar boat - just started doing some freelance graphic design work and wasn't sure how to handle the tax stuff. The point about documenting how you arrived at your income estimate is something I hadn't thought of. One question though - when you mention deducting gas money for traveling to lessons, do you need to track mileage or can you just estimate that too? I drive to different clients and never thought to keep track of the miles. Also totally agree on the Roth IRA - wish more people our age understood how powerful starting early can be!
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