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I'm a bookkeeper and see this ALL the time with clients. For just 1-2 days, the penalty will be tiny - like pennies on a typical tax bill. Most of the time for such a small amount, the IRS doesn't even bother to send a notice because the cost of processing and mailing exceeds the penalty amount! If they do charge it, just follow the advice about First Time Abatement. It works like 99% of the time if you haven't had other penalties.
Is there a minimum penalty amount the IRS charges? Like if it calculates to less than $1 do they just drop it?
From what I understand, the IRS typically doesn't issue penalty notices for amounts under $1, but there isn't an official published minimum. The administrative cost of processing and mailing a notice for such a small amount doesn't make sense for them. However, the penalty would still technically exist on your account and could accumulate if you had future late payments. For a 1-2 day delay on most individual tax payments, you're probably looking at under 50 cents in penalty, so chances are good you won't even see a notice about it.
Hey Max! I totally get the panic - been there myself. The good news is that for just 1-2 days late, you're looking at a really minimal penalty. The IRS charges 0.5% per month (calculated daily), so for a couple days you're talking pennies to maybe a few dollars depending on what you owe. But here's the thing - don't stress too much about it. If you do get hit with a penalty, the First Time Penalty Abatement that others mentioned is basically a get-out-of-jail-free card if you've been compliant for the past 3 years. I used it myself about 2 years ago when I had a similar situation (also due to a family emergency, ironically). The IRS approved it without any questions - didn't even need to provide documentation about the emergency. Just called and said "I'd like to request First Time Penalty Abatement for this penalty" and they took care of it on the spot. Your family emergency is totally understandable and these things happen. Don't beat yourself up over it - you'll get it sorted out!
Thanks Lucas, this is really reassuring! I was literally losing sleep over this thinking I'd ruined my perfect payment record. It's good to know that even if there is a penalty, it won't be some massive amount that destroys my finances. The family emergency angle is exactly what happened to me too - my dad had to go to the ER unexpectedly and between hospital visits and coordinating with family, taxes were the last thing on my mind until it was too late. I'm definitely going to try the First Time Penalty Abatement route if needed. Did you call right away after getting the penalty notice, or is there a specific timeframe you have to request it within?
Last year when I used SBTPG, I got a text message when they received my refund and another one when they sent it to my bank. It took exactly 1 business day in between. I remember because I was obsessively checking my bank account every hour! The text came at 10:43am saying they'd received my refund, and then the next day around 2pm I got the second text saying it had been disbursed. My bank then took another day to make the funds available. So all in all it was about 2 business days from when the IRS sent it until I could actually use the money. Make sure you're signed up for text alerts if they offer them - made the waiting game much less stressful!
Thanks for asking this question! I'm in the exact same boat - filed through a different preparer this year and now dealing with SBTPG for the first time. Based on what everyone's sharing here, it sounds like 1-3 business days is pretty typical once they receive it from the IRS. I'm definitely going to check my pending transactions like Mateusius suggested - hadn't thought of that! Also going to sign up for those text alerts Caesar mentioned if they're available. It's reassuring to hear most people get their money pretty quickly, even if there's that extra middleman step we're not used to. Fingers crossed we both get our refunds soon for those business expenses!
I'm in almost the exact same situation as you - dual Swiss-American citizen, lived in Switzerland my whole life, and just learned about US tax filing requirements. The anxiety about airport issues was consuming me until I read through this thread. What's been most helpful for me is understanding that this is purely an administrative tax issue, not a criminal matter. The CBP agents at airports are completely separate from IRS operations and don't have access to tax records. I've traveled to the US twice in the past year while researching my compliance options and had zero issues at customs. The key insight I've gained is that the US tax system for expats is designed around the assumption that most Americans abroad will owe little to no actual tax due to foreign tax credits and exclusions. With Switzerland's higher tax rates, you're likely already paying more in Swiss taxes than you would owe the US anyway. I'm planning to use the Streamlined Foreign Offshore Procedures mentioned throughout this thread. From my research, it seems like the most straightforward path for people in our situation who genuinely didn't know about the filing requirements. The 3-year filing requirement (versus catching up on everything) makes it much more manageable. Your mother's situation is actually quite common among older dual citizens. Many choose to get compliant simply for peace of mind, even when the actual tax impact is minimal. Swiss retirement income generally receives favorable treatment under the tax treaty.
@Freya Andersen Thank you for sharing your experience! It s'so reassuring to hear from someone who s'actually traveled to the US while dealing with this compliance issue. Your point about it being administrative rather than criminal really helps put things in perspective. I m'curious about the timeline for the Streamlined Foreign Offshore Procedures - once you submit everything, how long does it typically take to get confirmation from the IRS that your filing has been accepted? I m'hoping to get this sorted before my planned trip to visit family, but I m'not sure if I should expect weeks or months for processing. Also, for anyone else following this thread, I wanted to mention that I found the IRS has a specific FAQ section for US "Citizens and Resident Aliens Abroad on" their website that covers a lot of these scenarios. It s'been helpful for understanding the basic requirements, though the language is pretty dense. The community knowledge shared here has been much more practical and reassuring than trying to parse through government websites alone. The peace of mind aspect really can t'be overstated. Even though logically I understand the airport arrest fears are unfounded, having a clear path to compliance makes the whole situation feel much more manageable.
As someone who works in international tax compliance, I want to emphasize that your concerns about airport arrests are completely unfounded. US Customs and Border Protection operates independently from the IRS, and they have no access to tax filing information during entry processing. Their focus is on customs declarations, not tax compliance status. Your situation is incredibly common - we call it the "accidental American" problem. The US citizenship-based taxation system catches many dual citizens off guard, especially those who've lived their entire lives abroad. You're definitely not alone in this. With your income level of 5,200 CHF monthly, you'll likely benefit significantly from both the Foreign Earned Income Exclusion (up to $126,500 for 2024) and the Foreign Tax Credit. Since Switzerland has higher tax rates than the US, you may end up owing little to nothing in actual US taxes. The filing requirement exists regardless, but the financial impact should be minimal. For both you and your mother, I'd strongly recommend the Streamlined Foreign Offshore Procedures. This program is specifically designed for non-willful cases like yours and only requires filing 3 years of back returns plus 6 years of FBAR forms. It's much more manageable than trying to catch up on everything. Don't let tax anxiety prevent you from visiting family or renewing your passport. Focus on getting compliant at your own pace, but know that your immediate travel plans are not at risk.
@Nasira Ibanez Thank you so much for this professional perspective! As someone new to this community and dealing with this exact situation, it s'incredibly reassuring to hear from a tax compliance professional. I ve'been reading through this entire thread and the consistent message about airport safety is really helping ease my anxiety. Your point about accidental "Americans being" common makes me feel less alone in this - I was honestly feeling pretty foolish for not knowing about these requirements earlier. One question I have about the Streamlined Foreign Offshore Procedures - do you know if there are any specific documentation requirements for proving non-willful compliance? I want to make sure I have everything properly organized before starting the process. Also, given that I m'planning to renew my US passport soon, is there any particular timing I should consider for submitting the streamlined filing versus the passport renewal? I really appreciate everyone in this thread sharing their experiences. It s'made what felt like an overwhelming and scary situation feel much more manageable with a clear path forward.
Anyone else remember the old days when we had to actually mail paper returns with a postmark by midnight? I once drove to the post office at 11:45pm on April 15th and there was a line of cars around the block! Now we're all stressing about electronic timestamps lol.
Omg yes! I remember the postal workers would be standing outside collecting tax returns right at midnight. They'd even stamp them right there in front of you so you knew you made the deadline. Those were the days!
Don't panic! You're almost certainly fine. The IRS uses your local time zone for the filing deadline, so if you submitted at 11:23pm Pacific Time on April 15th, you made the deadline with 37 minutes to spare. The April 16th date on your confirmation is likely just because the tax prep service's servers are running on Eastern Time (where it was already past midnight when you filed). What matters to the IRS is the actual electronic submission timestamp with your local time zone info, not what's displayed on the confirmation page. If you want peace of mind, you can check your "Where's My Refund" status on the IRS website in a few days - once it shows up there, you'll know your return was accepted and processed normally. But based on what you've described, you should be all set!
Summer Green
Don't forget parking fees and tolls! Those are deductible regardless of whether you use standard mileage or actual expenses. I learned that the hard way after missing out on about $1200 in deductions one year from all the parking downtown at client sites.
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Gael Robinson
ā¢Also, if you wash your truck regularly and it has your business logo on it, those car washes can be 100% deductible as advertising expenses rather than vehicle expenses! Just make sure to note "business logo vehicle" on the receipt.
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Freya Thomsen
As a fellow construction business owner, I can confirm that vehicle expenses like fuel and maintenance should be classified as indirect costs (overhead) on your Schedule C, not direct costs tied to specific jobs. This is true even if you use the truck exclusively for business. The key distinction is that direct costs are materials and labor that can be directly traced to a specific project (like lumber for the Johnson house or concrete for the Smith driveway), while indirect costs support your overall business operations across all jobs. Since you're tracking both receipts and mileage, you'll want to calculate both methods to see which gives you the better deduction. For a gas-guzzling F-150 used 95% for business, the actual expense method often comes out ahead. Just make sure you're applying the correct business use percentage to all your vehicle expenses. One tip: keep a simple logbook in your truck noting the business purpose of each trip. It doesn't have to be fancy - just "job site visit - 123 Main St" or "client meeting - ABC Corp." This documentation will be invaluable if you ever face an audit.
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Amara Eze
ā¢This is really helpful advice! I'm just starting out with my own small contracting business and was completely confused about the direct vs indirect cost classification. The logbook tip is gold - I've been so focused on keeping receipts that I never thought about documenting the business purpose of each trip. Quick question - when you say "business use percentage," do you calculate that based on miles driven or time spent using the vehicle? I use my truck about 80% for work but I'm not sure if that should be based on mileage or just my general estimate of usage.
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