Thanks for bringing this up! Do you know if there's any way to find out about Spain's exit tax policies? My broker hasn't mentioned anything about this, but they've been pretty unhelpful overall. Also, with the transfer-in-kind option, would that avoid triggering US taxes, or would the IRS still consider that a taxable event even though I'm not technically selling?

Your best source would be the Spanish tax authority website or calling them directly. Sometimes these exit taxes only apply if you've been in the country for a certain number of years or have investments over a specific threshold. In Portugal, it only applied to investments I'd held for more than 5 years and only on the appreciation portion. For the transfer-in-kind, if the securities are identical before and after the transfer (same ISIN number), the US generally doesn't consider it a taxable event. You're simply moving the same investment from one broker to another. However, this only works if the exact same fund is available on both platforms. Most European funds don't have US equivalents with identical ISINs, which is where the problem lies.

Is there any way around the PFIC classification? I have some Swiss funds I really don't want to sell but don't want the tax headache either.

Thanks for mentioning this! Do you know if the Foreign Tax Credit is worth claiming for such a small amount ($65)? Is there a minimum threshold where it makes sense to bother with Form 1116?

For just $65 of interest income, the Foreign Tax Credit might not be worth the additional paperwork. Form 1116 is pretty complex and time-consuming to complete correctly. As a general rule, I usually don't bother with Form 1116 unless the foreign tax paid is at least $300-400, given the time and complexity involved. However, there's no minimum threshold requirement - you can claim it for any amount. If your brother plans to have more significant foreign income in the future, it might be worth establishing the pattern now. It's really a judgment call based on how much Australian tax was actually paid on that interest and how much you value your time versus the small credit amount.

Is that $10,000 per account or total across all foreign accounts? My parents have a few small accounts in Mexico but I'm not sure if they add up to that much.

If I choose actual expenses the first year, can I switch to standard mileage the next year if that works out better? Or am I locked into one method?

If you use the standard mileage rate the first year you use the car for business, you can switch between methods in subsequent years. However, if you use actual expenses the first year, you're locked into that method for the life of that vehicle for business purposes. That's why many tax professionals recommend using standard mileage the first year even if actual expenses might be slightly better - it preserves your flexibility to switch methods later if your situation changes. Once you choose actual expenses initially, you can't go back to standard mileage for that same vehicle.

Thanks for pointing this out! Do you know if driving to pick up prescriptions counts as medical mileage?

I hadn't thought about estimated payments! That might be a good backup plan if I can't get my employer to fix the withholding. Do you know if there's a minimum amount required for estimated payments? And what are the deadlines for those?

There's no minimum amount for estimated tax payments - you can pay whatever you need to make up the difference. The quarterly due dates are usually April 15, June 15, September 15, and January 15 of the following year (though they can shift slightly if those dates fall on weekends or holidays). Just be sure you're paying enough to meet one of the "safe harbor" provisions to avoid penalties: either 90% of this year's tax or 100% of last year's tax (110% if your AGI was over $150,000). I used the IRS Direct Pay system online which makes it pretty easy to submit payments, and you get immediate confirmation.

That works in theory, but some employers (like mine) seem to ignore even that. I explicitly put an additional $200 per paycheck on line 4(c) and they still somehow messed it up. It's like they're deliberately trying to cause tax problems!

That only works if you actually have investment losses to harvest though. In a year where the market is up, you might not have many losses to claim. Plus you need a taxable brokerage account, not just retirement accounts.

That's actually really practical, thanks! I get paid twice a month, so I'd need to withhold about $73 extra per paycheck to cover the taxes on my HYSA interest. That seems totally doable.