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Speaking from experience (3 years running a US-based online marketing business while traveling), the technical/practical aspects were actually harder than the legal/tax aspects. Time zone challenges when clients expect meetings during US business hours but you're in Asia was brutal. Internet reliability is another huge factor - I learned to always have backup internet options (local SIM with hotspot capability + regular wifi). Also recommend setting up a good VoIP phone service that lets you maintain a US number. I use Google Voice which lets me make/receive US calls from anywhere. Clients never knew I was responding from a beach in Bali at 11pm my time.
One thing I haven't seen mentioned yet is visa requirements and how they might affect your tax situation. While you can absolutely run your US business from abroad, some countries have strict rules about working on tourist visas, even if it's remote work for a US company. Countries like Thailand, Vietnam, and several European nations are cracking down on "digital nomads" working on tourist visas. Getting caught could result in deportation and future visa denials. Consider looking into digital nomad visas that several countries now offer - Portugal, Estonia, and Barbados have legitimate remote work visas. Also, be aware that spending too much time in certain countries (usually 183+ days) can trigger tax residency there, which could complicate your US tax situation even with the FEIE. Each country has different thresholds and rules. I'd strongly recommend consulting with both a US international tax attorney AND researching the work visa requirements for each country you plan to visit. The $500-1000 you spend on proper legal advice upfront could save you from major legal and tax headaches down the road.
This is such an important point that people often overlook! I'm actually planning something similar and had no idea about the 183-day tax residency rules. Do you know if there's a good resource to check these thresholds for different countries? I was planning to spend about 4 months in Portugal and 3 months in Thailand, so I want to make sure I don't accidentally trigger tax residency anywhere. Also curious about the digital nomad visas - do those change your tax situation at all compared to being on a tourist visa? I assume having official permission to work remotely is better than the gray area of tourist visas, but wasn't sure if it creates any additional tax obligations.
This is absolutely infuriating and highlights just how broken our tax system is when it comes to gambling. I'm dealing with something similar - made about $500 in actual profit from online casinos but have to report over $8,000 in "winnings" because of how they classify every single transaction. The most ridiculous part is that the IRS basically forces you to become an accountant just to gamble legally. I've been tracking every spin, every hand, every bet - it's insane. And then you're penalized for taking promotions that are specifically designed to attract customers. What really gets me is that traditional investments get much more favorable tax treatment. If I buy and sell stocks 1000 times and end up with a $500 profit, I only pay taxes on the $500. But with gambling, somehow every winning transaction is taxable income even when you're just getting your own money back. The system is designed to discourage gambling while simultaneously maximizing tax revenue from it. It's a complete mess that punishes people for following the law and trying to report everything correctly.
You've hit the nail on the head about how backwards this system is. The stock market comparison is spot on - imagine if every time you sold a stock for more than you paid, even if it was part of a larger losing position, you had to report that individual sale as income. It would be chaos. What really bothers me is that the IRS essentially treats gambling like a business for tax purposes (every transaction is income) but doesn't allow you to deduct expenses like a business would. If I ran a retail store and bought inventory for $1000 then sold it for $1100, I'd only pay taxes on the $100 profit. But with gambling, that same $100 profit somehow becomes $1100 in taxable income unless you jump through hoops to itemize. The whole system seems designed to either discourage gambling entirely or to maximize tax revenue from people who don't understand the rules. Either way, it's the regular person who gets screwed while trying to do the right thing and report everything honestly.
This entire thread perfectly captures why I've completely stopped gambling online despite enjoying it recreationally. The tax compliance burden is absolutely insane relative to the entertainment value. I went through something similar a few years ago - won about $3,000 total but had to report nearly $25,000 in "winnings" because of bonus rollover requirements and the IRS's ridiculous definition of what constitutes a win. Spent more on tax preparation software and my own time than I actually profited from gambling. The worst part is that casinos KNOW this creates a nightmare for players but they don't care because they're not the ones dealing with the tax consequences. They happily promote these deposit bonuses and rollover requirements that create thousands of taxable "wins" for what amounts to small actual profits. What really sealed it for me was realizing that even if I won big, a significant portion would go to taxes on phantom income I never actually received. Meanwhile, if I lose, I get limited deduction benefits that often don't even help unless I have other itemizable expenses. The system is fundamentally broken when following the law correctly requires more work than most people's actual jobs. I'll stick to Vegas where at least the wins and losses are more straightforward to track.
You're absolutely right about Vegas being more straightforward. I'm actually considering doing the same thing after this nightmare. At least with live casinos you can track your sessions more easily and the wins/losses are clearer. What kills me is that these online platforms make it seem like you're getting "free money" with all their promotions, but they don't warn you about the tax implications at all. If I had known that accepting a $500 bonus would create $15,000+ in reportable "winnings" just from the rollover requirements, I never would have touched it. The irony is that the more "successful" you are at meeting their bonus requirements, the worse your tax situation becomes. It's like being punished for playing their games correctly. I've basically paid more in additional taxes and tax prep time than I ever won, which makes the whole thing feel like an elaborate scam disguised as entertainment.
I've been dealing with this exact same Form 5695 rejection issue! My wife and I jointly own our home and installed a geothermal heat pump system last year. Got the same "Joint Occupancy" error message when trying to e-file through FreeTaxUSA. After reading through all these responses, I'm feeling much better about just waiting until March 17th. I was initially panicking thinking I had messed up the energy credit calculation or ownership percentage somehow. It's reassuring to know this is a widespread IRS system bug affecting multiple tax software platforms. One thing I'll add - if anyone is considering the paper filing route, remember that your state return might also need to wait until your federal return is processed. My state (Virginia) requires the federal AGI to match before they'll accept an e-filed state return, so I'd probably end up paper filing both anyway. Might as well wait for the electronic fix at this point.
Thanks for sharing your experience with FreeTaxUSA - it's helpful to know this issue spans across different tax software platforms. Your point about state returns needing the federal AGI to match is spot on. I'm in a similar situation where my state return got rejected alongside the federal one, and now I understand it's because they're linked. I think waiting until March 17th makes the most sense too, especially since we'd likely have to paper file both federal and state returns if we go that route now. At least with the electronic fix, we should be able to resubmit both returns quickly once the IRS resolves the Form 5695 processing error. The geothermal system sounds like a great investment! Those energy credits can really add up when you're dealing with higher-cost installations like geothermal vs my heat pump.
I'm dealing with the same Form 5695 joint occupancy rejection! My partner and I co-own our condo and installed new windows and a heat pump water heater last year. Got rejected through TaxAct with the identical error message about processing being corrected on March 17th. Reading through everyone's experiences here has been incredibly helpful - I was worried I had calculated the energy credit wrong or misunderstood the joint ownership rules. It's reassuring to know this is a widespread IRS system issue affecting all the major tax software platforms. I think I'm going to wait for the March 17th fix rather than paper filing. Between the 6-8 week processing time for paper returns and the potential complications with my state return, it seems like waiting a couple more weeks for the electronic fix is the smarter move. Plus, based on what others have shared, we shouldn't need to change anything on our forms - just resubmit once the IRS resolves their processing error.
I'm in the exact same boat! My husband and I co-own our townhouse and installed solar panels plus a new HVAC system last year. Got hit with the same Form 5695 joint occupancy rejection through FreeTaxUSA. It's such a relief to find this thread and realize we're all dealing with the same IRS system bug. I was second-guessing everything - the ownership percentages, the credit calculations, whether I needed separate forms. Spent hours re-reading the Form 5695 instructions thinking I missed something obvious. Definitely going to wait for the March 17th fix too. The paper filing route seems like it would just create more headaches, especially with state returns potentially getting delayed as well. At least we know our forms are correct and it's just a matter of the IRS fixing their processing system. Thanks everyone for sharing your experiences - this community has been more helpful than hours of trying to decode IRS error messages!
Has anyone actually done the math here? At $32/hr full-time, that's about $66k annually. The 2023 standard deduction for HOH is $20,800, leaving about $45k taxable. That puts some income in the 22% bracket. Child tax credits are $4k total ($2k per kid), which wouldn't completely eliminate tax liability that's well over $4k. Something doesn't add up with the employer's calculations. I'd double-check that your W-4 was processed correctly.
Don't forget about the Earned Income Credit though. With two kids and that income level, it could be significant. Also possible OP has other deductions we don't know about.
You're absolutely right to question those calculations, Chloe. Let me break down the math more precisely: At $66k with HOH filing status: - Standard deduction: $20,800 - Taxable income: ~$45,200 - Tax liability before credits: roughly $4,800-5,200 With two kids: - Child Tax Credit: $4,000 ($2k each) - Earned Income Credit at that income level with 2 kids: approximately $1,500-2,000 So total credits could be around $5,500-6,000, which would indeed cover or exceed the tax liability. However, I agree something seems off with the employer's system showing zero withholding. Most payroll systems are conservative and would still withhold something as a buffer. Oliver, I'd definitely verify that your W-4 information was entered correctly - especially the number of dependents and filing status. It's also worth checking if there are any other factors like pre-tax deductions (health insurance, 401k contributions) that might be reducing your taxable wages further than expected. The safest approach might be to request modest additional withholding just to avoid any surprises, even if the math suggests you'll break even.
This breakdown really helps clarify things! I'm in a similar situation and was getting conflicting advice from different sources. One thing I'm wondering about - does the Earned Income Credit phase out quickly at higher income levels? I'm making about $58k with one kid and want to make sure I'm not overestimating my credits when planning my withholding strategy. Also, @Oliver Weber, have you considered using one of those tax projection tools mentioned earlier in the thread to double-check these calculations? It might give you more confidence in your current setup or help identify if there really is an issue with your employer's withholding system.
Jay Lincoln
after 5 months of my transcript being blank and the as of date changing multiple times, i finally broke down and spent money on claimyr.com to actually talk to a human at the IRS. turns out they flagged my return because my 2022 return hadn't fully processed yet due to a clerical error on their end. the agent fixed it right away and I got both refunds within 2 weeks. sometimes you just need to talk to a real person to fix these issues.
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Douglas Foster
I'm going through almost the exact same thing! Filed in March 2023 and my transcript has been blank forever. Just like you, I've had to verify my identity multiple times (twice online and once by phone). My "as of" date also recently changed to a future date in 2025. It's so frustrating because you feel completely in the dark about what's happening. I've been checking my transcript obsessively too, hoping to see some kind of update or code that would give me a clue about the status. From what I'm reading in the other comments, it sounds like the date change might actually be a positive sign that things are moving forward. I really hope that's the case for both of us! Let me know if you see any other updates on your transcript.
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Oliver Fischer
β’Oh wow, it's such a relief to hear from someone in the exact same situation! I was starting to think I was the only one dealing with this nightmare. The obsessive transcript checking is driving me crazy too - I probably check it 3-4 times a day hoping something will finally appear. It's encouraging that you also had the date change recently. Maybe we're both finally getting close to some resolution! I'm trying to stay optimistic after reading some of the other comments about this being a good sign. I'll definitely keep you posted if I see any updates. Please do the same! It helps knowing I'm not alone in this mess. Fingers crossed we both get some good news soon π€
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