Thanks for mentioning this! What exactly is the correct format for the form number? I'm trying to pay for my 1040 taxes and wasn't sure if I should just put "1040" or if there's some specific format they need.

For Form 1040, you'll want to enter it exactly as "1040" - no spaces, no extra zeros, no "Form" prefix. For other common forms: use "941" for quarterly employment taxes, "940" for annual FUTA tax, "1120" for corporate income tax, etc. Just the numbers, exactly as they appear on the actual form. The IRS is very particular about this formatting, and getting it wrong can cause your payment to go into limbo.

Direct Pay is WAY easier if your payment is under $10 million. No codes to figure out, immediate confirmation, and it's free. I switched to Direct Pay after messing up a wire transfer once. You can access it right from the IRS website and it walks you through everything.

Thank you for the suggestion - I hadn't considered that! I was at my previous job for 5 years and this new company did mention something about adjustments when I first started but I didn't really understand what they meant. Do you know if this is something that would eventually balance out or should I expect this to continue?

It should definitely balance out. For me it was just for a couple months until they collected whatever was missing. After that my paychecks went back to normal. Just talk to HR and ask them to explain exactly what's happening - they should be able to print out a detailed breakdown for you. The good news is that even if they're collecting extra now, you won't end up paying more than your fair share for the year. The system is designed to correct itself so you pay exactly what you owe, no more.

Definitely not over the wage base! I wish lol. I'm making $48,500 annually at this job and made about $41,000 at my previous position this year before switching. So that's not the issue, but thanks for the suggestion.

This is actually really good to know. I'm switching jobs next month and will be over that threshold for the year when combining both jobs. Do I just wait until I file my taxes to get back the excess SS tax, or is there a way to tell my new employer not to withhold it?

Thanks for breaking it down like that! So would real estate commissions count as selling costs? And do I need specific documentation for all this or can I just put the numbers in when I file?

Yes, real estate commissions definitely count as selling costs! They're usually one of the biggest deductions from your sale proceeds. Other selling costs that reduce your amount realized include legal fees, transfer taxes, and any seller-paid closing costs. Documentation is important. You should keep your closing statements from both the purchase and sale (HUD-1 forms or Closing Disclosures), plus receipts for any improvements you made to the property. You don't submit these with your tax return, but you'll need them if you're ever audited. When you file, you'll report this on Schedule D and possibly Form 8949, depending on your situation.

You'll report it on Schedule D (Capital Gains and Losses) and possibly Form 8949 (Sales and Other Dispositions of Capital Assets) depending on your situation. Most tax software will guide you through this when you indicate you sold land or real estate. The important thing is to have your purchase information (date, cost, closing costs) and your sale information (date, proceeds, selling expenses) ready.

As a US citizen working for a foreign mission, your situation is actually a bit different. You DO owe both income tax and self-employment tax since US citizens are taxed on worldwide income. You wouldn't use Schedule C because you're an employee, not a business owner. Instead, you'd report your income on Line 1 of Form 1040 as wages, then complete Schedule SE to calculate your self-employment tax obligation. Make sure you're getting credit for those quarterly payments by reporting them on your return. And keep good records of everything because this situation often triggers questions from the IRS simply because it's less common.

Thanks for clearing that up! So basically treat it like regular wage income on the 1040, but also file Schedule SE for the self-employment portion? And I assume my quarterly payments go on the 1040-ES line? Do I need any special statement or form since my employer gave me their country's version of income documentation rather than a W-2?

Do you mind sharing which publications they recommended? I'm in a similar situation but working for an international organization rather than a foreign mission, and I'm trying to understand if the rules are the same.

They pointed me to Publication 519 (U.S. Tax Guide for Aliens) which has a section on employees of foreign governments and international organizations. Also Publication 54 (Tax Guide for U.S. Citizens and Resident Aliens Abroad) had some relevant information. For international organizations, the rules are very similar but depend on whether your organization has specific tax privileges under International Organizations Immunities Act. The key thing is that while you might be exempt from income tax, you typically still owe self-employment tax unless covered by a totalization agreement with your home country.

Is this really legit though? Don't you have to run actual payroll with proper tax withholdings at the time you take the money? I've been stressing about making sure everything is by-the-book with my new S-Corp.

This is absolutely legitimate as long as you properly document and account for everything. When you run payroll, you'll calculate the full gross salary amount, withhold all required taxes, and then reduce the net check by the amount you already advanced yourself. For example, if your reasonable salary is $5,000 monthly and you already took $3,000 as an advance, when you run payroll, you'll still calculate taxes on the full $5,000, but the net check would only be around $2,000 (minus the taxes on the full amount). This ensures all proper employment taxes are paid on your full reasonable compensation. Just make sure your payroll system can handle this "adjustment" or "reimbursement" properly.

Agreed! I did something similar my first year and my accountant just had me document everything carefully. The important thing is the year-end picture looks right. S-Corps get in trouble when they take massive distributions and tiny salaries over the course of entire years, not when they make minor timing errors while learning the ropes.