Thanks for mentioning this! I'll double check my EFTPS payments right away. Did you have to do anything special to get them to reallocate the payments to the correct years?

You'll need to call the IRS Business Tax line and specifically request a payment transfer. Have your EFTPS confirmation numbers ready along with the dates of the payments and the tax periods they should be applied to. I found it helpful to prepare a simple spreadsheet showing the payment date, amount, confirmation number, and which tax period each payment should apply to. The agent I spoke with appreciated having all the information organized, and it made the process much smoother.

What's the best way to word a reasonable cause request? My situation was similar but I'm not eligible for first time abatement.

Is that different from the state tax account? I thought closing my state business tax account would take care of unemployment stuff too.

Yes, they're completely separate in most states. Your state business tax account is usually with the Department of Revenue or similar agency, while unemployment insurance is typically handled by the Department of Labor or Employment Security. Even with zero employees, many states require you to file a final zero report and specifically request to close the account. Each agency has their own closure process that must be followed separately.

Your accountant is correct. For a single-member LLC filing as a disregarded entity on Schedule C, checking the "final return" box is the proper way to indicate to the IRS that it's your final filing. Just make sure you're also handling the state dissolution paperwork separately as others have mentioned.

Thanks for mentioning the treaty! I'll look into that. Regarding the FEIE, my accountant originally suggested using Foreign Tax Credits instead because the Dutch tax rates are higher than US rates, so I'd potentially get more benefit from the credits. Does that sound right, or should I reconsider using the FEIE?

Your accountant's reasoning about FTC vs FEIE is generally sound. When foreign tax rates are higher than US rates, the Foreign Tax Credit usually provides better results since it directly offsets your US tax liability dollar-for-dollar and can generate excess credits to carry forward. However, there's a potential hybrid approach worth considering: use the FEIE for your employment income and then use FTC for your investment income. This sometimes creates a more favorable tax situation, especially when dealing with the basketing limitations. The key advantage is that by excluding your earned income entirely from US taxation with the FEIE, the remaining investment income might fall into lower tax brackets, potentially reducing your overall US tax liability.

Yes, I completed streamlined last year with this exact issue. The key is to be consistent across all three tax years you're filing. Make sure your approach to categorizing income in the different baskets follows the same methodology for each year. In my certification statement (Form 14653), I specifically mentioned that I was uncertain about certain aspects of Form 1116 basketing but had made good faith efforts to comply based on my understanding of the rules. The IRS accepted my submission without any questions.

Is there any way as a client to know if the foreign accountants are actually qualified? Like do they have to meet any specific standards or get certified in US tax law?

There's no single certification requirement for foreign accountants working on US returns. Most reputable accounting firms will have their own training programs and quality control processes. The final tax return must still be reviewed and signed by a US-licensed CPA, which provides some protection. You can ask your accountant about their offshore team's qualifications, training programs, and supervision structure. Find out if they're familiar with US GAAP and current tax laws. Ask how work is reviewed before it reaches you. Good firms typically have multi-layer review processes where work is checked by senior staff before client delivery.

Not everyone can just switch to DIY tax software though. Some of us have complex situations with businesses, investments, multiple state filings, etc. Tax software can't handle everything, especially if you need actual tax planning advice.

Would it be better to file as a Schedule C business loss or just take the casualty loss directly? Does it make a difference tax-wise? I'm in a sorta similar situation with my small side business.

You'll definitely want to file Schedule C to report all your business income and expenses, including the equipment that was destroyed. The casualty loss is reported on Form 4684, but since these were business assets, the loss ultimately flows to your Schedule C. Filing the business loss on Schedule C is generally more advantageous than taking a personal casualty loss because personal casualty losses are highly restricted under current tax law (only federally declared disasters qualify). Business casualty losses don't have these same limitations and can offset your other income.

The key difference between a hobby and a business isn't whether you made money yet, but whether you had a reasonable expectation of making a profit and were operating it in a businesslike manner. Plenty of legitimate businesses have losses in their first year or even several years.