Thanks for this clarification! I think you're right - I might have filled out the wrong form entirely. I'm not a US citizen or resident, so it sounds like I should have submitted a W-8BEN instead of a W-9. Could this be why they're applying the withholding incorrectly?

Absolutely! This is exactly why you're experiencing the incorrect withholding. By submitting a W-9, you inadvertently represented yourself as a US person, which created a mismatch with your foreign tax ID. When the broker detected this inconsistency, they defaulted to backup withholding. You need to immediately contact them and clarify that you should be filing a W-8BEN as a non-US person. This will not only stop the inappropriate backup withholding but should also change how they treat your account for tax purposes going forward. Once you submit the correct W-8BEN form with your FTIN, they should be able to process a refund of the incorrectly withheld amounts from your gross proceeds, as that withholding should never have been applied in the first place.

Did they refund all the incorrectly withheld amounts after getting it fixed? How long did that process take? I'm in a similar situation with TD Ameritrade right now.

I did update everything right after I noticed the withholding, but I'll double check the verification status. How long did it take for your account to show as verified after you updated your info?

For me it took about 3 business days to show as verified after I updated everything. But even after it showed as verified, they still withheld on my next trade which was super annoying. I ended up having to contact support about it, and they explained that sometimes there's a lag between when your information is verified in their system and when the withholding actually stops. After that conversation, the withholding stopped on all subsequent trades.

This is great advice. I always export my transaction history monthly from every broker I use. Robinhood makes this pretty easy - just go to Statements & History and you can download CSV files of all your activity.

Can EAs help with business structure advice too? Like if I'm trying to decide between LLC vs S-Corp? My main concern is reducing self-employment tax.

Yes, most EAs can definitely help with business structure questions like LLC vs S-Corp decisions. Many specialize in small business taxation and self-employment tax strategies. My EA was incredibly helpful in analyzing when an S-Corp election would make sense for me (generally when netting over $40K in profit). Just make sure you ask them specifically about their experience with business structures and self-employment tax strategies during your initial consultation. Not all EAs focus on business clients - some specialize in other areas like individual taxation or representation during audits.

This is such a good point! I had a CPA who was impossible to reach by email and wanted everything printed. My new tax person uses a secure portal and it saves so much time.

100% agree! The client portal has been life-changing for me. I can just take photos of receipts with my phone and upload them immediately rather than having a dreaded "tax receipt box" that I'd have to sort through later. My current CPA also uses software that automatically categorizes most of my transactions, which means I'm spending about 1 hour a month on bookkeeping instead of 5+ hours. Definitely worth asking about their tech setup during the interview process!

I actually looked into wiring the money, but there are some complications. The banking system in Nicaragua isn't well connected internationally, and my aunt doesn't have a bank that can easily wire to the US. Plus the fees were crazy high - like 8% of the total amount. That's why I'm considering just bringing cash, even with the extra paperwork.

That makes sense - some countries definitely have banking limitations. If cash is your only reasonable option, then definitely follow all the advice about proper documentation. Make sure to keep the cash secure during travel too - consider a money belt or other secure option rather than just keeping it in your luggage. One other tip - once you're back in the US, don't be surprised if your bank asks a lot of questions when you deposit the cash. Banks have their own reporting requirements for large cash transactions, and they might request some of the same documentation you prepared for customs. Just be transparent about everything.

I brought back around $18k from selling my deceased mother's home in Mexico last year. They took me to a separate room, had me fill out the FinCEN form, and then questioned me for about 45 minutes about the source of the funds. They called the number I provided for the real estate agent in Mexico to verify parts of my story. They also took pictures of all the documentation I brought (deed of sale, my mother's death certificate, etc). It was intense but professional. The key was having solid documentation - I saw someone else there with a similar amount who couldn't properly explain where it came from, and they were having a much harder time.

Good point! I'll ask her to look at her W-4. She started this job last January and I'm wondering if she just filled something out wrong when she started. Is there an easy way for her to check what she put on the form?

She can ask her HR department or payroll provider for a copy of her current W-4 on file. Most employers will readily provide this. She can also just look at her pay stub - it usually shows the withholding status or at least the amount being withheld (which in her case would be $0). While she's at it, she should file a new W-4 right away. The form was completely redesigned a few years ago and no longer uses allowances. Instead, it has a more straightforward worksheet approach. The IRS also has a Tax Withholding Estimator tool on their website that can help her figure out exactly what to put on the new form.

This! Head of Household status is huge for single parents. The standard deduction for 2024 is $20,800 for HOH vs just $13,850 for single filers. That's a $6,950 difference which could save her over $800 in taxes!