This thread is absolutely fantastic - I wish I had found information this clear when I was navigating EFIN requirements as a new preparer! The misinformation problem is so real. I actually had a similar experience where I was told conflicting information by different IRS representatives. What strikes me most is how @DeShawn Washington, @Oliver Schmidt, and @Ravi Patel have provided such specific, actionable guidance based on their actual experiences. The detail about selecting "Legal Resident Alien" vs "Non-resident Alien" in the dropdown is exactly the kind of practical tip that can make or break an application. @LunarEclipse - I really hope you're following this thread! It sounds like you can move forward with your own EFIN application and avoid all the complicated business partnership scenarios that were being discussed earlier. The consensus from people who've actually done this successfully as permanent residents is pretty clear. For anyone else reading this who might be in a similar situation: save this thread! The combination of official publication references (@CosmicVoyager citing Publication 3112) and real-world application experiences makes this an incredibly valuable resource. It's exactly this kind of community knowledge-sharing that makes the difference between success and unnecessary complications when starting a tax prep business.

Wow, this thread has been absolutely incredible to read through! @LunarEclipse - I hope you're still following along because it looks like your whole problem just got solved! The fact that multiple people here have successfully gotten EFINs as permanent residents completely changes your situation. What really stands out to me is how this discussion evolved from exploring complex family business arrangements and contractor relationships to discovering that you can likely just apply directly yourself. @CosmicVoyager's citation of Publication 3112 was the game-changer, and then @DeShawn Washington, @Oliver Schmidt, and @Ravi Patel provided the real-world validation with their actual application experiences. The practical tips are gold - especially the dropdown selection detail and the document requirements. It's honestly concerning how much misinformation is floating around, even from IRS reps themselves! As someone just getting started in tax prep myself, I'm saving this entire thread as a reference. The combination of official IRS publication citations and detailed first-hand experiences makes this an invaluable resource. Plus all the backup strategies and tools people mentioned (like taxr.ai for compliance analysis and Claimyr for IRS communication) give great options for various situations. Thanks to everyone who contributed their knowledge here - this is exactly what makes this community so valuable for newcomers like us!

Something nobody's mentioned yet - if you have self-employment income (even from a side gig), you could open a Solo 401k and roll your pre-tax IRA money into that. Then you'd be able to do clean backdoor Roth conversions with your post-tax IRA contributions. I did this last year when I was consulting on the side, and it worked perfectly. The Solo 401k can often have better investment options than an employer 401k too, since you get to choose the provider. I went with Fidelity and have access to all their low-cost index funds with no admin fees.

Great breakdown of your situation! You're absolutely right about the pro-rata rule making backdoor Roth conversions less attractive with your current mix. A few additional thoughts: Since you're 42 with 20 years until retirement, you might consider doing small annual Roth conversions during years when your income is lower (job changes, sabbaticals, etc.). Even though you'd pay tax on 85% of each conversion, spreading it over multiple years could keep you in lower tax brackets. Another angle to consider: if you expect to be in a lower tax bracket in retirement, keeping the Traditional IRA as-is might actually be optimal. You'd continue tracking basis with Form 8606, and your future withdrawals would be partially tax-free based on the pro-rata rule you mentioned. For the earnings question - no, earnings on your post-tax contributions are not tax-free when withdrawn. Only your actual post-tax contribution amounts (your basis) come out tax-free. The IRS treats all earnings as taxable regardless of which contributions generated them. The 401k rollover strategy others mentioned is solid if your plan allows it, but make sure to factor in any differences in investment options and fees when deciding if it's worth it.

As someone who used to do taxes professionally, I'd recommend comparing the actual forms that each software generates rather than just looking at the final numbers. You can usually preview your return before filing. Check these specific things: 1. Is your income categorized correctly on both (W-2 vs 1099)? 2. Are self-employment expenses being deducted properly? 3. Is the standard deduction being applied correctly? 4. Is self-employment tax being calculated only on 1099 income?

This is such a frustrating situation! I went through something similar two years ago and it turned out that the free versions of different tax software have varying levels of sophistication in handling mixed income sources. One thing that really helped me was creating a simple spreadsheet to track exactly what each software was doing with my numbers. I listed out all my income sources (W-2, each 1099, etc.) and then went through both programs to see how they were categorizing and calculating taxes on each piece. In my case, I discovered that one program was double-counting some of my expenses while the other wasn't counting legitimate business deductions at all. The difference in my final tax liability was over $900! My advice would be to not file either return until you're confident about which one is correct. The penalties for filing incorrectly can be steep, and it's worth taking the extra time to get it right. You might also want to consider upgrading to a paid version of one of the software programs - sometimes the additional features are worth the cost when you have multiple income sources like restaurant work plus gig economy income.

Just a tip: no matter which service you use, ALWAYS look at the actual tax forms they generate (Form 1040 and schedules) to see where the differences are. Comparison shop between services but understand WHY they're different. Most discrepancies come from credits like Education, Earned Income, Child Tax, or deductions like student loan interest. Tax software relies on answering interview questions correctly, and each one phrases questions differently which can lead to different answers.

I've seen this exact scenario play out so many times! The $860 difference you're experiencing is actually pretty typical when there are education credits involved. Jackson Hewitt tends to be more thorough with their education credit questions compared to TurboTax and H&R Block. Here's what likely happened: TurboTax and H&R Block probably asked about your education expenses, but their question flow might have led you to accidentally disqualify yourself. For example, they might have asked if you were enrolled "at least half-time" and if you answered incorrectly, it could have knocked out the entire credit even if you were eligible. Since the IRS has already accepted your return, you should be fine. "Acceptance" means the basic info matched their records. Just keep your 1098-T form and any tuition receipts as backup documentation. The American Opportunity Credit can be worth up to $2,500, so a difference of $860 between owing $650 and getting a $210 refund makes perfect mathematical sense. One thing to watch for next year: try to be extra careful with the education questions on whichever service you use. Those credits are worth thousands but easy to miss if you're not careful with the interview process!

Has anyone had experience with settlements that include back pay AND emotional distress? My understanding is they're taxed differently - wages are subject to both income tax and employment taxes, while emotional distress is only subject to income tax.

Based on everything discussed here, it sounds like you're in a pretty straightforward situation compared to some of the more complex settlements mentioned. Since your $27k settlement appears to be primarily for lost wages from your employment dispute, you'll likely need to report the full amount as taxable income and can deduct your attorney fees as an above-the-line deduction (which effectively means you're only taxed on the $18k you received). For setting aside money for taxes, I'd recommend being conservative and setting aside about 25-30% of the $18k you actually received (so roughly $4,500-$5,400). This should cover both federal and state taxes depending on your bracket. Given the timing and amount, you should also consider making estimated tax payments to avoid underpayment penalties. The tools and services others have mentioned (taxr.ai for calculations and Claimyr for IRS questions) seem like they could save you a lot of headache in figuring out the specifics for your situation. Don't let this stress you out too much - employment settlements are pretty common and the tax treatment is well-established once you know the rules!