Are you writing off all your business expenses correctly? I'm self employed too and was shocked at my tax bill until I learned what I could deduct. Car mileage, home office, cell phone, internet, laptop, software subscriptions, health insurance premiums, business travel, professional development... the list goes on. My tax guy found over $20k in legit deductions I was missing.

I feel your pain! I went through something similar my first year hitting six figures as a freelancer. That 45-50k total tax bill is unfortunately pretty normal for self-employment income at your level. A few things that might help reduce the sting: 1. **Quarterly payments for next year** - Since you now know your income level, increase those quarterly payments to avoid another big surprise. Aim for about 35% of your gross income. 2. **Business structure** - At your income level, it might be worth exploring an S-Corp election. You'd pay yourself a reasonable salary (subject to payroll taxes) and take the rest as distributions (no SE tax). Could save you several thousand annually. 3. **Maximize retirement contributions** - A Solo 401k lets you contribute as both employer and employee, potentially up to $69,000 for 2024. Even a $20k contribution could save you $5-7k in taxes. 4. **Track EVERYTHING** - Business meals (50% deductible), equipment, software, professional memberships, continuing education. I use QuickBooks Self-Employed to categorize expenses automatically. The good news? You made $160k! That's amazing. The tax bite hurts but it means your business is thriving. Just plan better for next year so there are no surprises.

Just wanted to share a warning - I had tax debt from 2006-2008 that should have reached the CSED by 2018-2020, but I found out the IRS had sued me in federal court for the tax debt back in 2016 (I never received the notices because I moved several times). Once they get a judgment, the CSED no longer applies and they can collect for 20+ years!! If your debt is substantial (mine was about $48,000), they might have already taken this step. You should check court records in your jurisdiction to make sure they haven't filed a suit against you. This completely changes the CSED situation.

Just wanted to add another important point that hasn't been covered yet - if you're dealing with CSED issues, make sure you understand the difference between the Collection Statute Expiration Date and the Assessment Statute Expiration Date (ASED). The ASED is typically 3 years from when you filed your return (or should have filed), and it determines how long the IRS has to assess additional taxes. The CSED is the 10-year period for collection that everyone's been discussing. These are completely separate timelines. Also, if you filed an amended return or the IRS made adjustments to your original return, each change creates a new assessment with its own 10-year CSED. So even if your original 2008 tax return's CSED has expired, if the IRS made an adjustment in 2015, that adjustment would have its own CSED expiring in 2025. This is why getting your Account Transcript is so crucial - it shows every assessment and adjustment, not just the original filing. Many people think their debt should be gone based on their filing date, but don't realize there were later assessments that reset the clock.

Just wanted to add that the formula you're using to calculate your US taxable UK income looks right, but make sure you're using the official IRS yearly average exchange rate, not just any exchange rate you find online. The IRS publishes these rates for each year and they're what you should use for consistency. Also, don't forget that as a dual-status alien, you can't take the standard deduction on your return - you're limited to itemizing only, and even then with some restrictions. And check out the special rules about filing a "dual-status statement" that explains your residency dates.

This is exactly the kind of complex situation where getting professional help can save you tons of headaches and potentially money. I went through something similar when I moved from Canada to the US mid-year. One thing to double-check - make sure you're correctly determining your US tax residency start date. For green card holders, you become a US resident for tax purposes on the date you first become a lawful permanent resident (usually the date you enter the US with your immigrant visa or the date your status is adjusted if you were already in the US). This affects your pro-ration calculation. Also, keep detailed records of everything - dates of payments, exchange rates used, copies of all foreign tax documents. The IRS can be pretty thorough if they decide to examine a dual-status return, especially one with foreign tax credits. I learned this the hard way when they asked for documentation going back three years. Good luck with your first US tax return! It gets easier once you understand the system, but that first dual-status year is definitely a learning curve.

One thing I learned the hard way as a pianist - make sure you clearly document which vehicle expenses go with which type of income! I got flagged for an audit because I deducted all my travel, but some was for my W-2 teaching position (not deductible) and some for my 1099 gigs (deductible). Keep a mileage log with dates, destinations, purpose, and which "job" it was for. There are apps that can help track this automatically. This distinction between W-2 and 1099 related expenses is super important and something many musicians miss.

As someone who's navigated the musician tax maze for years, I want to emphasize something that hasn't been mentioned yet - the importance of understanding the "exclusive use" test for your home studio deduction. Since you mentioned teaching private lessons from your home studio, you can absolutely deduct that space, but it must be used EXCLUSIVELY for business purposes. If your home studio doubles as a family room or storage area, the IRS won't allow the deduction. The space needs to be dedicated solely to your music business activities. For calculating the deduction, you can either use the simplified method ($5 per square foot up to 300 sq ft) or the actual expense method (percentage of home expenses based on square footage). Given your multiple income streams, I'd recommend the actual expense method since you can likely justify a larger deduction. Also, don't forget about the Section 199A deduction (QBI deduction) for your 1099 income! As musicians with Schedule C income, you may qualify for up to a 20% deduction on your qualified business income. This can be substantial savings that many musicians overlook. One last tip - consider whether any of your equipment purchases qualify for Section 179 depreciation, which allows you to deduct the full cost in the year of purchase rather than depreciating over several years. This applies to items like recording equipment, instruments, and computers used for your business.

My tax guy told me that when you have a 1099-R with code J, you should also include a statement with your tax return explaining the situation. He said its not technically required but can help prevent questions from the IRS later. Has anyone else been advised to do this?

I went through this exact situation last year with a 1099-R code J for an excess Roth contribution removal. Everyone's advice here is spot on - you'll report the full amount on line 4a and $0 on line 4b since it's just returning your already-taxed contribution. The most important thing that some tax software misses is Form 5329. You absolutely need to file this form to report the 6% excise tax for both 2022 and 2023. TurboTax should prompt you for this when you indicate it was an excess contribution removal, but double-check that it's including Form 5329 in your filing package. Also, don't worry about box 2b being checked - that's completely normal for this type of distribution. The brokerage is basically saying "we're not making the taxability determination, that's between you and the IRS," which is standard practice for excess contribution removals. Keep all your documentation from Vanguard showing the removal request and confirmation, plus records of the excise tax payments. This will be helpful if there are any questions later.