This is such a comprehensive and eye-opening discussion! I'm currently on an H1B visa and planning to return to my home country (Mexico) in the next 2-3 years, and I've been contributing to my Roth IRA for the past 5 years. One aspect I wanted to add that I haven't seen mentioned yet is how the Mexican tax authority (SAT) treats foreign retirement accounts under their recent anti-avoidance rules. Mexico has been cracking down on foreign financial accounts, and there are now much stricter reporting requirements for Mexican tax residents with overseas assets above certain thresholds. What's particularly concerning for my situation is that Mexico doesn't fully recognize the tax-free status of Roth IRA distributions under their domestic tax law, even though the US-Mexico tax treaty has provisions for retirement income. I've been told by a cross-border tax advisor that Mexico may treat Roth distributions as regular investment income subject to their capital gains tax rates, which could significantly impact the benefit I was expecting. I'm also dealing with a practical issue that @StarStrider mentioned about banking regulations - Mexican banks have been implementing stricter "know your customer" requirements for large foreign transfers, which could complicate receiving Roth distributions. Some banks now require extensive documentation about the source of funds, including proof that taxes were properly handled in the source country. Has anyone in this thread dealt with countries that don't fully recognize the US tax treatment of Roth accounts? I'm starting to wonder if I should consider alternative strategies, like potentially converting my Roth back to a traditional IRA before moving, though I know that would have immediate tax consequences. The insights everyone has shared here have been invaluable for understanding just how complex these cross-border retirement planning issues can be!

This thread has been incredibly informative! I'm currently on an F-1 visa (just started working on OPT) and planning to return to South Korea in about 18 months. I've only been contributing to my Roth IRA for about a year, but this discussion has me wondering if I should even continue given all the potential complications. From what I'm reading, it seems like even when the US treats qualified Roth distributions as tax-free, each home country has its own interpretation and compliance requirements that could significantly complicate things. South Korea has been implementing stricter foreign asset reporting requirements recently, and I'm concerned about the ongoing administrative burden. A few specific questions that this discussion has raised for me: 1) For those who went through this process, what was the total cost (legal fees, tax preparation, compliance, etc.) of managing the cross-border aspects? I'm trying to do a cost-benefit analysis of whether the Roth IRA benefits justify the complexity for someone with a relatively short US work period. 2) Has anyone considered just withdrawing their Roth contributions (which I understand are always tax-free) before leaving the US to avoid the ongoing international compliance issues? Obviously you'd lose the growth potential, but it might simplify things significantly. 3) Are there any alternative retirement savings strategies that work better for temporary US workers who plan to return home? Maybe focusing more on taxable investment accounts that might have simpler international treatment? The experiences everyone has shared really highlight how much more complex this is than I initially realized. Thank you all for the detailed insights - it's helping me make a much more informed decision about my retirement planning strategy!

Just wanted to add my experience from this tax season - I saw the same 960 code and called FreeTaxUSA directly to confirm what everyone here is saying. The customer service rep explained that when you select "pay fees from refund," you're essentially authorizing them to act as an intermediary. They create what's called a "temporary bank product" where the IRS deposits your full refund, FreeTaxUSA takes their preparation fee (mine was $14.99), and then they ACH transfer the remainder to your actual bank account. The whole process took about 10 days from when my refund was issued. The authorization is very narrowly defined - they can't access any other tax information or communicate with the IRS about your return status. It's purely transactional. Your daughter should receive email updates from FreeTaxUSA throughout the process showing when they received the refund and when they transferred her portion.

Thank you everyone for the detailed explanations! As someone new to this community, I really appreciate how thorough and helpful these responses have been. I had the exact same concern when I saw a 960 code on my transcript after using TaxSlayer and choosing the refund transfer option. What struck me most was how this authorization process isn't clearly explained during the filing process - you really have to dig into the fine print to understand what's happening. For anyone else encountering this, I'd recommend keeping screenshots of your filing confirmation emails and checking your transcript periodically to see when the code gets removed. It's also worth noting that some tax prep companies are more transparent about this process than others - might be something to consider when choosing software for next year's filing season.

I'm in a very similar situation and your post really resonates with me. I discovered FBAR requirements just last month when preparing my 2023 taxes, and like you, I've been living in the US since 2018 with foreign accounts I never knew needed separate reporting. After reading through all the responses here and doing my own research, I wanted to share what I learned from speaking with an EA (Enrolled Agent) who specializes in international tax issues. She confirmed that for people like us who properly reported all foreign income on our tax returns but simply didn't know about FBAR filing, the Delinquent FBAR Submission is definitely the right path. The key questions she had me ask myself were: 1) Did I report all foreign income on my tax returns? 2) Was there any intent to hide assets? 3) Are my total foreign assets under the really high thresholds that would trigger additional scrutiny? Since you mentioned your assets are around $38k and you've been properly reporting income, you should qualify for the simple delinquent filing process. The horror stories you're reading about massive penalties are typically for cases involving tax evasion or very large unreported assets. One practical tip: before you start the FBAR filings, gather all your foreign account statements for the past 6 years and create a simple spreadsheet with highest balances for each account by year. This will make the actual filing process much smoother. You've got this! The anxiety is the worst part, but the actual compliance process is more straightforward than it initially appears.

I completely understand the overwhelming anxiety you're feeling right now - I went through something very similar when I discovered I'd been missing FBAR filings for several years. The good news is that your situation sounds very straightforward for the Delinquent FBAR Submission process. Since you mentioned you've been properly reporting all income from your foreign accounts on your tax returns, you're exactly the type of person this process was designed for. The IRS recognizes that many people simply weren't aware of the FBAR requirement, especially immigrants who are dealing with an already complex tax system. A few things that helped calm my nerves when I was in your position: 1. The horror stories online often involve much larger amounts of money or cases where people were actively trying to hide income - that doesn't sound like your situation at all. 2. Your $38k in foreign assets puts you in a very different category than the cases that result in severe penalties. 3. The fact that you proactively filed your 2022 FBAR and are now trying to get into compliance actually works in your favor - it shows good faith effort. For the practical side, I'd recommend starting with the BSA E-Filing system to submit your missing FBARs for the past 6 years. Keep your explanation simple and honest - "I was unaware of FBAR filing requirements until 2023" is perfectly sufficient. Make sure you have your foreign account statements handy for calculating the highest balances each year. You're going to get through this, and it's likely going to be much less dramatic than your anxiety is telling you right now.

Great thread everyone! As someone who went through this process last year, I wanted to add a few practical tips: 1. **PTIN timing**: While Oliver mentioned PTINs are issued quickly online, be prepared for potential delays during peak application periods (November-January). I'd recommend applying ASAP to avoid any last-minute issues. 2. **EFIN considerations**: If you're just starting out with tax prep, consider whether you actually need your own EFIN right away. Many new preparers partner with established firms or use third-party e-filing services for their first season to test the waters before committing to the full EFIN process. 3. **State requirements**: Mikayla touched on this, but definitely research your state's specific requirements. Some states require separate registrations even if you have a CPA license. California, for example, has its own CTEC registration for non-credentialed preparers, though CPAs are exempt. 4. **Insurance**: Something not mentioned yet - consider professional liability insurance once you start preparing returns for compensation. Your CPA license might provide some coverage, but tax preparation has its own specific risks. Ashley, to directly answer your question: Yes, you need the PTIN regardless of your CPA status, and getting it now will absolutely cover you for the 2024 tax season. The EFIN is only if you want to e-file directly yourself.

One important detail that hasn't been mentioned yet - make sure you understand the difference between getting a PTIN for "occasional" vs "regular" tax preparation. The IRS considers you a tax return preparer if you prepare even ONE return for compensation, so your CPA license doesn't change that requirement. However, if you're planning to prepare more than 10 returns per year, you'll also need to complete continuing education requirements through the IRS Annual Filing Season Program (AFSP) - though as others mentioned, CPAs are exempt from this since you already have CE requirements. Also worth noting: if you decide to go the EFIN route, the IRS now requires you to maintain detailed records of all returns you e-file, including client consent forms and copies of all tax documents. It's a significant administrative burden that many new preparers underestimate. The third-party e-filing route that Sean mentioned really does make sense for your first season to see if you want to commit long-term. One last tip - consider joining your local chapter of the National Association of Tax Professionals (NATP) or similar organization. They often have resources specifically for CPAs transitioning into tax preparation and can help navigate some of these regulatory requirements.

Hey Malik! I totally get your frustration - that 33% withholding definitely feels like a punch to the gut when you're used to your full paycheck amount. The good news is that you have several solid options to fix this. Since you're single with no dependents, you're definitely overwithholding by claiming 0. On the new W-4 form (which doesn't use allowances anymore), you'd want to just check "Single" in the filing status section and leave most other sections blank for a basic situation like yours. One thing I'd suggest before making any changes: take a close look at your pay stub breakdown like Sean mentioned. Make sure you understand what's federal income tax vs. FICA vs. state taxes. If your federal withholding alone is more than about 15-20% of your gross pay, you're probably withholding too much. You can always start conservative - submit a new W-4 with just your filing status and see how your next few paychecks look. If you're still overwithholding, you can always adjust again. Better to make gradual changes than to swing too far in the other direction and end up owing at tax time!

Welcome to the "holy crap, where did my paycheck go?" club! I remember that exact feeling when I started my first job out of college. Seeing 33% vanish felt like highway robbery, but you're definitely not alone in this. Here's what helped me figure it out: I actually kept a simple spreadsheet tracking my gross pay, total withholdings, and the breakdown between federal/state/FICA for a few months. It helped me understand my actual tax burden versus what was being withheld. For someone in your situation (single, no dependents, one job), the new W-4 form makes this much simpler than the old allowance system. Just fill out your basic info, check "Single" for filing status, and sign it. That should bring your federal withholding down to a much more reasonable level. One more tip: if you're worried about making a mistake, you can always submit a new W-4 partway through the year if your first adjustment doesn't feel right. HR departments are used to people tweaking their withholdings, especially new grads who are figuring this stuff out for the first time. Don't stress too much about getting it perfect immediately!