Can someone explain why they take so much longer to issue 1042S forms compared to 1099s? My American friends all have their tax documents already but I'm still waiting for my 1042S from two different banks. Is this normal?

Just to add another perspective - if you're feeling overwhelmed by all this, don't hesitate to reach out to your company's HR or payroll department if you work for a larger employer. Many companies that sponsor H1B visas have dealt with these exact situations before and may have resources or recommendations for tax professionals who specialize in non-resident issues. Also, keep in mind that even though you're getting a 1042S now, you should still report ALL your US-source income on your tax return, including any amounts that had tax withheld. The 1042S will show both the income earned and the tax already withheld, which you'll need to claim as a credit against any taxes owed. One more tip: if this is your first year receiving a 1042S, consider doing a mid-year tax projection once you file to see if you need to make estimated tax payments going forward, especially if you have other income sources that don't have withholding.

I'm going through something similar but with adoption. We paid fees this year but won't finalize until next year. My tax guy said to keep ALL receipts because some expenses like this can be rolled into the following year's taxes when the child is actually your dependent. Not sure if it's the same for birth, but worth asking a professional.

I'm dealing with a similar situation and found it helpful to think about this in terms of timing and what the IRS actually considers "care." The key issue is that the Child and Dependent Care Credit requires three things: 1) you have a qualifying dependent, 2) care was actually provided, and 3) you paid for that care. Even though you're paying now, no actual care is being provided until your baby arrives. The deposit is essentially reserving future care, not purchasing current care. It's frustrating because you're out the money now, but the IRS timing rules are pretty strict. One thing that might help - ask your daycare how they'll handle that deposit once your baby starts. If they apply it directly to your first month's payment rather than keeping it as a separate "holding fee," it'll be cleaner to claim on your 2025 taxes. Some daycares are flexible about restructuring these payments if you explain the tax situation. Also worth noting that if your baby arrives before December 31st (even on New Year's Eve!), you can claim them as a dependent for the full 2024 tax year, which opens up other credits like the Child Tax Credit, just not the childcare credit for pre-birth expenses.

Has anyone here actually created a retirement account for their kids from S corp earnings? My daughter is 14 and makes about $7k a year in my business and I'm wondering if it's worth setting up a Roth IRA for her or if there's some other tax strategy I should be using.

Great discussion here! I just want to add one thing that's helped me tremendously with S corp payroll for my kids - make sure you're keeping really detailed records of their actual work hours and tasks. The IRS can be pretty strict about "reasonable compensation" even for family members. I created a simple time tracking system where my kids log their hours and what they did each day. For the marketing/photo work, I keep copies of the actual materials they appeared in and notes about which photo shoots they participated in. This documentation has been invaluable when my accountant prepares our quarterly payroll reports. Also, don't forget that you'll need to issue them W-2s at the end of the year just like any other employee. The payroll software I use makes this pretty straightforward, but it's something to plan for if you're doing payroll manually. The Roth IRA suggestion is spot on too - getting them started on retirement savings this early is such a gift you can give them!

Has anyone else noticed that FreeTaxUSA is actually better at finding deductions than TurboTax? I switched this year and somehow got an extra $720 on my refund with the exact same info.

Thanks for this detailed review! I've been dreading doing my taxes this year because I have my first backdoor Roth conversion to deal with. After reading your experience and the comments here, I'm definitely going to skip TurboTax and go straight to FreeTaxUSA. The price difference alone is compelling - saving $75+ while getting better functionality seems like a no-brainer. Really appreciate you taking the time to share this, especially the specific details about how FreeTaxUSA handles the Form 8606 reporting better than TurboTax. One quick question - did you have to upgrade to any premium features for the backdoor Roth reporting, or was that included in the base federal filing fee?

Another thing to know - check your pay stubs for any "pre-tax deductions" or similar section. Sometimes health insurance contributions appear there rather than as a separate line item, which can be confusing.

That's great that you confirmed no health insurance deductions on your pay stub! Just to put your mind completely at ease - the 1095-C form is basically a report card showing that your employer offered you qualifying health insurance (which they did with that 1E code) and what your share would have been ($123.45/month). Since you're covered under your spouse's plan, you made the smart financial choice to decline. Keep that form with your tax records, but you don't need to attach it to your return. The IRS uses these forms to verify that employers are offering adequate coverage and that individuals have qualifying health insurance from somewhere (which you do through your spouse). You're all set!