Does anyone know if you can e-file a return with a pending ITIN application? My tax software keeps rejecting it saying I need a valid ITIN or SSN.

I went through this exact same situation about 6 months ago and can confirm what others have said - the IRS language is confusing but they do process your return and hold your refund until you get the ITIN approved. In my case, the rejection was due to insufficient identity documentation. What really helped me was keeping detailed records of everything. I created a simple spreadsheet tracking: - Original application date - Rejection notice date and reason - Resubmission date - All documents included in resubmission - Follow-up call dates and notes When I reapplied, I included a cover letter explicitly stating "ITIN Reapplication - Previous Application Rejected" and referenced my original tax return by form type and approximate filing date. This seemed to help them connect everything in their system. One tip that saved me time: before mailing my reapplication, I made copies of absolutely everything and took photos of the package before sealing it. The IRS processing can be slow, and having that documentation was helpful when I called for status updates. The whole process from rejection to finally getting my ITIN and refund took about 14 weeks total, but once the ITIN was approved, the refund came pretty quickly (about 3 weeks after that). Stay patient and make sure you address exactly what they flagged in the rejection notice. Good luck!

Pro tip from someone who used to work at H&R Block: If you're mailing double-sided documents, use a highlighter to mark "CONTINUED ON BACK" at the bottom of each page that continues on the reverse. This little trick helps ensure nothing gets missed during processing. Also, use certified mail with return receipt. The extra $7-8 is worth the peace of mind knowing exactly when the IRS received your documents.

Yellow highlighter works fine - it's what we recommended when I worked there. Avoid red, dark blue, or green as those can interfere with scanning. Fluorescent yellow shows up clearly to human reviewers but doesn't confuse the optical character recognition systems. One more thing I forgot to mention: if you're including multiple 1099-B forms, arrange them in chronological order by date issued, not alphabetically by broker. The IRS processors appreciate this organization and it can speed up your processing time. Also make sure any corrected forms (1099-B-C) are clearly marked and placed immediately after the original they're correcting.

Has anyone figured out how to handle these payments in QuickBooks? We're setting up a similar program and I'm trying to track the payments properly. Should they be entered as vendor payments, grants, or something else? And what accounts should I use to categorize them?

Great question about the 1099 reporting! I run a similar childcare assistance program and went through this exact dilemma last year. Based on our experience and consultation with our CPA, you'll definitely need to issue 1099-NEC forms to the providers. The IRS considers these payments as compensation for services, regardless of whether you're paying on behalf of the families or directly for your own organization's benefit. Since you're the entity cutting the checks and the providers are performing services (childcare), the $600 threshold applies. One thing we learned the hard way: make sure you collect W-9 forms from all providers before making your first payment. We had to scramble at year-end to get tax information from some providers, which delayed our 1099 processing. Also, keep detailed records showing which families each payment benefits - this helps with both your grant reporting and provides backup documentation if there are any questions later. The good news is that most childcare providers are already accustomed to receiving 1099s from families who pay them directly, so this shouldn't be a surprise to them.

I believe I can speak to this from personal experience, though individual situations may vary somewhat. Last year, I found myself in a nearly identical position. My refund showed as funded in SBTPG on a Thursday, and I realized I needed to amend my return for a missed education credit. I cautiously filed the 1040X that same day, concerned about potential complications. My original refund deposited without issue the following Monday, and approximately 14 weeks later, I received the additional refund from my amendment. The systems appear to operate independently, at least in my experience.

Your refund is safe! 🙂 When SBTPG shows "funded," that's actually great news - it means the IRS has already completed all their processing and verification of your original return. The money has been released from the IRS systems and is now just going through the final banking steps to reach your account. I went through something similar last tax season when I had to amend for a forgotten 1099-INT. Filed my 1040X about 2 days after my refund showed funded status. The original refund hit my account right on schedule, and the amendment was processed months later as a completely separate transaction. The key thing to remember is that once your return reaches the funded stage, you've essentially cleared all the IRS hurdles. Your amendment will go into their separate queue for manual review, but it won't interfere with what's already been approved and sent out. Congratulations on getting through your first tax season as head of household - that status change can definitely make things feel more complicated, but it sounds like you handled it well!

Be careful with FPHCI! I completely missed reporting some foreign dividend income a few years ago because I didn't understand these rules. Ended up with penalties and had to file amended returns. Make sure you're tracking ALL passive income from any foreign corps where you have significant ownership.

Another thing to keep in mind is that FPHCI rules can interact with PFIC (Passive Foreign Investment Company) rules in complicated ways. If your foreign corporation qualifies as both a CFC (triggering FPHCI rules) and a PFIC, you generally apply the CFC rules instead of PFIC rules - but this can vary based on your ownership percentage and other factors. Also, don't forget about the potential impact of GILTI (Global Intangible Low-Taxed Income) rules if you're dealing with post-2017 tax years. Some income that might have been treated as FPHCI under the old rules now falls under GILTI instead, which has different calculation methods and tax rates. I'd strongly recommend working with a tax professional who specializes in international taxation if you're dealing with significant foreign investments. The interaction between all these different regimes (FPHCI, PFIC, GILTI, etc.) can get extremely complex very quickly.