I had a similar experience last year where a preparer promised a huge refund that seemed too good to be true. Turns out she was claiming I operated my home as a daycare (I don't) to get a massive home business deduction. I reported her to the IRS using Form 14157 (Tax Return Preparer Fraud). The IRS takes this seriously because shady preparers cost them billions.

This is a huge red flag situation. A legitimate tax preparer should ALWAYS be transparent about what deductions they're claiming on your behalf. The fact that she's being vague and won't explain the specifics is extremely concerning. Here's what you should do immediately: 1. Don't sign anything until you get a complete draft of your return 2. Ask her to walk through each deduction line by line - if she refuses, walk away 3. Compare the draft to your previous year's return to see what's different 4. Consider getting a second opinion from a CPA or EA (Enrolled Agent) With your income level and typical tax situation, a $9K swing without major life changes (new business, significant charitable donations, major medical expenses, etc.) is highly suspicious. Remember, YOU are legally responsible for everything on that return, not the preparer. If she's committing fraud, you could face penalties, interest, and even criminal charges. Trust your instincts - if it sounds too good to be true, it probably is. Better to pay what you actually owe than deal with an IRS audit and potential fraud charges.

One thing that hasn't been mentioned yet is the importance of keeping detailed records of your Robinhood cash sweep deposits. As an NRA, you'll want to maintain documentation showing that the interest truly comes from bank deposits rather than other investment activities. I'd recommend downloading your monthly statements from Robinhood that show the cash sweep transactions and which partner banks your funds were deposited into. This documentation will be helpful if the IRS ever questions the exempt status of your interest income. Also, be aware that if you have other types of interest income from Robinhood (like from bonds or other securities), those would be treated differently and might not qualify for the bank deposit exception. The 1099-INT should break down the different types of interest, so make sure you're only applying the exemption to the actual bank deposit interest from the cash sweep program.

As a fellow NRA dealing with similar tax questions, I want to emphasize something that helped me understand this better: the key distinction is between "portfolio interest" and "bank deposit interest" - both can be exempt for NRAs, but under different rules. For Robinhood's cash sweep program, you're almost certainly dealing with bank deposit interest since they explicitly state they sweep uninvested cash into FDIC-insured deposit accounts at partner banks. This falls squarely under the bank deposit interest exemption in IRC Section 871(i)(2)(A). However, I'd strongly recommend verifying this by looking at the specific language on your 1099-INT form. Box 1 should show the interest amount, and there might be additional codes or descriptions that clarify the source. If it says something like "cash sweep interest" or references partner banks, you're good to go with the exemption. One last tip: even though it's exempt from federal tax, don't forget to check if your state has any reporting requirements if you have any U.S. state tax obligations. Most states follow federal treatment for NRAs, but it's worth confirming.

The 1099-K threshold changing to $600 for 2024 is going to be a nightmare for casual sellers! I've heard people say they're going to stop selling online altogether because of it. Does anyone know if there's a difference between selling on eBay vs local cash sales through Facebook Marketplace? Like if I sell stuff locally for cash does that somehow avoid all this tax reporting headache?

This is exactly why I keep detailed records of everything I sell online, even though it's a pain. I use a simple Google Sheet with columns for: item description, original purchase price/date, sale price, sale date, and whether it was personal or business. For personal items I can't remember the exact purchase price for, I research what similar items cost when I would have bought them and use that as a reasonable estimate. The key is being consistent and reasonable - the IRS isn't expecting you to remember that you paid $23.47 for a shirt in 2019, but they do want to see that you made a good faith effort to establish your basis. One thing that helped me was going through old credit card and bank statements to find purchases for higher-value items I sold. Most banks let you download several years of transaction history, and searching for store names or amounts can help you piece together purchase records you thought were lost forever.

Don't forget to consider if your music composition qualifies for Qualified Business Income (QBI) deduction! A lot of creative professionals miss this. The professional code can impact this too.

Great question! I'm a freelance musician and composer who went through this exact same situation a few years ago. I'd definitely recommend switching to code 711510 (Independent Artists, Writers, and Performers) as others have mentioned - it's much more accurate for what you're actually doing. One thing I wish I'd known earlier: make sure you're tracking all your composition-related expenses properly. Things like music software subscriptions, instrument maintenance, studio equipment, and even a portion of your internet bill if you're distributing music online can all be legitimate deductions. Since you're transitioning from having a CPA handle everything, it's worth doing a deep dive into what business expenses you might have been missing. Also, keep detailed records of your royalty payments and commission work - the IRS likes to see clear documentation of creative income streams. Good luck with your first self-filed return!

I'm super confused about these K-2/K-3 schedules. My software (TaxAct) is forcing me to fill out ALL the parts even though we only have one foreign partner and all US income. Is there a way to override this in the software so I only complete the necessary sections?

I went through this exact situation last year with our partnership that has German and Swiss partners but only domestic US income. After hours of research and calls to the IRS, here's what I learned: You're absolutely right to complete Part 2 as a protective measure. The required sections for your situation are: **Part 1 (Partnership's Income)** - Complete Section 1 even if all zeros. This shows you've considered each category. **Part 2 (Foreign Tax Credit Information)** - Required when you have foreign partners who might claim foreign tax credits on their personal returns. **Part 10 (Foreign Partner Information)** - This is crucial. You need to break down each type of domestic income (ordinary business income, rental income, capital gains, etc.) allocated to your foreign partners. Don't just show totals. **Part 11 (Treaty Benefits)** - Check if any of your foreign partners are from treaty countries. If so, you may need to complete this section to help them claim treaty benefits. One thing that caught me off guard: make sure to include the partner's country code and tax identification number from their home country in Part 10. The IRS has been very specific about this requirement. I'd also recommend attaching a brief statement explaining that you have no foreign-sourced income but are filing these schedules due to foreign partners. It helps clarify your filing position if the IRS has questions later. The good news is once you get the format down, it becomes much easier for subsequent years!