Have you considered using a tax software that specializes in expat taxes? I've been using TaxAct Premium for filing with my Canadian spouse. It walks you through all the foreign spouse questions step by step and costs way less than a CPA. The key forms you'll need to know about are: - Form 8840 (Closer Connection Exception Statement) - Form 8833 (Treaty-Based Return Position) - Form 1116 (Foreign Tax Credit) - FinCEN Form 114 (FBAR for foreign accounts) The software prompts you for all of these and explains when they're needed. Just make sure you read each section carefully.

Don't forget about FBAR requirements! My wife is Brazilian and we got hit with a $10,000 penalty for failing to report her foreign bank accounts that had over $10,000 combined. The threshold is surprisingly low. Also, make sure you understand FATCA requirements (Form 8938) which is separate from FBAR but has similar purposes. The thresholds are different though - for married filing jointly living in the US, you need to report if the total value of foreign assets is more than $100,000 on the last day of the tax year or more than $150,000 at any time during the year.

Don't forget to check your lease agreement! My lease for my fitness studio had specific language about tenant improvements and who owns what after lease termination. In my case, anything attached to the structure became landlord property, which affected how I could depreciate those costs. My accountant said the character of these expenses (whether they're truly "improvements" or just "modifications") can depend on lease terms. This affected whether I could use the shorter 15-year recovery period or had to use a longer one.

Has anyone used the "safe harbor" for small taxpayers to simplify all this? I think if your business is below certain revenue thresholds, you can just expense repairs and improvements under $2,500 per invoice immediately instead of depreciating. My CPA used this for my yoga studio buildout last year and it saved me tons of headaches with categorization.

Something nobody's mentioned yet is that you should request a copy of the partnership agreement if you don't already have it. When you inherited your share, it should have come with documentation about the partnership terms. Some partnership agreements actually restrict distributions and require capital reserves to be built up to certain levels before making distributions. This could explain why you're seeing income on the K-1 but not getting much in distributions. Also, check if there's a partnership meeting you can attend. As a partner, you generally have rights to information about the business operations and financial status. You might discover they're planning major renovations or have other reasons for retaining earnings.

Check out line 19 (distributions) of your K-1 and compare it to line 2 (real estate income). If line 19 is consistently lower than line 2, that means the partnership is retaining earnings rather than distributing them. This is common but can create tax headaches. Also, make sure you're tracking your "basis" in the partnership. Your basis increases when you report income from the K-1 and decreases when you receive distributions. This tracking is SUPER important because: 1) If you ever sell your interest, your basis determines your gain/loss 2) If your basis ever goes to zero, distributions become taxable 3) Certain losses can be limited based on your basis Most tax software doesn't handle basis tracking well, so you might need to maintain a separate spreadsheet or get professional help.

3 You definitely need to check your paystubs throughout the year to catch withholding problems before filing time! A good rule of thumb for single filers is that roughly 12-15% of your gross income should go to federal taxes when you make $30k-$40k. So with $36k income, you should have had about $4,300-$5,400 withheld throughout the year. If you only had $105 withheld, that's less than 0.3% of your income! No wonder you owe so much. For the future, always check your first couple paystubs after starting a new job or submitting a new W-4 to make sure the withholding looks reasonable.

14 This is why our tax system is so messed up! You shouldn't need special tools or services just to pay the right amount. I had a similar issue last year - thought I was doing everything right and still ended up with a huge bill. Has anyone used any good tax software that helps prevent this kind of surprise? I've been using FreeTaxUSA but it doesn't really help with planning for next year.

I just went through a PCS from Germany back to Fort Hood last year and had to pay $3400 to bring our two cats. I asked the JAG office tax attorney about this before filing and they specifically advised NOT to claim pet expenses on Form 3903. Their explanation was that while military members can still claim moving expenses (unlike civilians after the tax law changes), the IRS has consistently treated pets differently than household goods. They said the pet transportation costs would be considered personal expenses, not moving expenses. I know it sucks to hear since pet transportation internationally is crazy expensive, but thought I'd share what military legal advised us.

LPT: don't forget that while most of the military moving expenses are covered, you can still deduct anything that wasn't reimbursed! This includes things like extra weight charges if you were over your allowance, temporary storage beyond what the military covered, and miscellaneous moving-related expenses. The key with Form 3903 is that you can only deduct costs the military didn't reimburse you for. So document everything carefully, especially for an OCONUS move!