Has anyone had experience with getting a refund of the withholding later? I've heard the Canadian seller can file for a refund if the actual tax liability is less than what was withheld, but curious how complicated that process is.

I just went through this exact situation 6 months ago when buying from a Canadian seller! The stress is real, but you'll get through it. A few things that might help: First, definitely confirm with your title company what their role is here. In my case, they handled the actual withholding and filing - I just had to provide the buyer information and sign off on the calculations. They should NOT be dumping all of this on you at the last minute. Second, double-check if you qualify for the primary residence exemption. If this will be your main home and the purchase price is under $1 million, you should only need to withhold 10% (or 0% if under $300k). That could save you thousands. The form itself isn't as scary as it looks once you understand what goes where. The key boxes are pretty straightforward - your info, seller info, property address, purchase price, and withholding amount. Don't let them rush you into making mistakes because of their poor planning. You have every right to push back on the timeline if they're not providing proper support. This is a standard part of foreign seller transactions and they should have processes in place to handle it smoothly. Hang in there - you're almost at the finish line!

One thing nobody mentioned - check if your work qualifies as a "permanent establishment" under Article 7 of the US-Belgium tax treaty. If it does, different rules might apply. This bit me when I was contracting with a US company from Sweden.

Dont forget about social security! The US and Belgium have a totalization agreement that prevents double taxation on social security. You'll probably pay into the Belgian system only since you live there permanently, but you need to get a certificate of coverage from Belgian authorities.

Has anyone actually received the stimulus payments as part of their late-filed returns? I filed my 2020 return in February 2023 and claimed the recovery rebate credit but I'm still waiting. IRS "Where's My Refund" just says it's still processing.

@Abby Marshall, I was in almost the exact same situation last year! I filed my 2020 and 2021 returns super late while still having unfiled 2018 and 2019 returns. The good news is that you should still get your refunds - the IRS processes each year separately like others mentioned. One thing to watch out for though - if you end up owing money on those older unfiled returns, the IRS can and will apply your current refunds to those balances once you eventually file them. So you might get your refunds now, but if you owe for 2018/2019, they could come back later and ask for some of that money back. My advice would be to try to at least get a rough estimate of what you might owe or be owed for those missing years before spending your refund money. That way you won't get caught off guard later. The stimulus payments should definitely come through with your 2020 return though - those were processed pretty smoothly even for late filers in my experience.

Different perspective - I'm a former IRS employee (not speaking officially). Trace number means your refund is finalized and in the disbursement stage. Your return has passed all verification processes and is now just in the queue for Treasury to cut the check or send the electronic payment. This is the final status before payment, so you're almost there.

Great question! I went through the same confusion a few months ago. The trace number is basically the IRS's internal tracking ID for your specific refund payment. When you see "funded to you" with a trace number, it means your refund has been fully approved and is now in the payment pipeline. You should see your money within 3-5 business days for direct deposit or 1-2 weeks for a mailed check. The hardest part is over - your return cleared all their checks and reviews. Now it's just a matter of the payment system doing its thing. Hang in there, you're almost done!

Let me add a wrinkle most people don't know - if you distributed any business assets to yourself during the dissolution (like computers, furniture, etc.), that needs to be reported as a liquidating distribution on your final 1120-S. The corporation is treated as having sold these assets to you at fair market value. I completely messed this up when closing my S-corp and ended up having to amend returns. Cost me an extra $400 in accounting fees!

I went through this exact same situation with my S-corp dissolution last year and want to emphasize something that might save you some headaches - make sure you also cancel your EIN with the IRS after everything is filed and processed. Even after filing all the final returns (1120-S, Form 966, etc.) and getting state dissolution completed, I kept getting IRS notices asking about missing tax returns for subsequent years because the EIN was still active in their system. You have to specifically write to the IRS requesting EIN cancellation and include copies of your dissolution documents. Also, if you had any business bank accounts, credit cards, or merchant services tied to your EIN, close those ASAP. Some banks will report 1099s to closed business EINs which can trigger more IRS correspondence down the road. The penalty situation sucks, but as others mentioned, first-time penalty abatement is usually granted if you've been compliant in the past. Get everything filed immediately to stop the bleeding, then deal with penalty relief afterward.