You have 3 years from the original tax filing deadline to amend a return. So for 2020 returns (first and second stimulus), you have until April 15, 2024. For 2021 returns (third stimulus), you have until April 15, 2025. No penalties for claiming these credits late as long as you're within those timeframes!

Any recommendations for expat tax services that don't cost a fortune? I got quoted $800 for a pretty basic return with some foreign accounts.

I've found that smaller firms specializing in expat taxes are often more affordable than the big international tax firms. I use a CPA who works primarily with expats and charges about $400-500 for a return with foreign accounts and income. Not cheap, but reasonable for the expertise. Another option is to use a service like H&R Block's Expat Tax Services or TaxAct's international version to prepare the basics yourself, then have a professional review it. This hybrid approach saved me some money while still getting expert eyes on the final product. Some tax pros offer a "review only" service that's cheaper than having them prepare everything from scratch.

Thank you so much for pointing this out! I'll definitely look up those procedures. If I understand correctly, the small amount of unreported income ($150 from 2023) might still make me ineligible for the streamlined procedures, but the fact that it was non-willful and I'm correcting it quickly should help my case?

Exactly! The small unreported amounts won't disqualify you from reasonable cause relief, especially as a new resident. The key is showing you're acting in good faith once you discovered the requirements. For the Delinquent International Information Return Submission Procedures, you'd typically need zero tax due to qualify for the streamlined process. But even if you don't qualify for that specific procedure, the same principles apply - document your reasonable cause (new resident status, prompt correction upon discovery) and include a detailed statement with your amendments. The IRS distinguishes between willful non-compliance (hiding assets, intentional evasion) and honest mistakes by new residents learning the system. Your situation clearly falls into the latter category, especially since you were properly filing FBARs which shows good faith compliance efforts. Keep records of when you discovered the Form 8938 requirement and how quickly you took action to correct it. This timeline will be important for your reasonable cause argument.

Those numbers seem cherry-picked. Are those percentages of total tax paid or their effective tax rates? Because if 1% of people pay 40% of taxes but earn 80% of the income, that's still regressive. Can you share where those stats come from?

Those are percentages of total federal income tax collected, coming from IRS data for 2020 (the most recent complete analysis available). You raise a good point about comparing to income share - the top 1% earned about 20% of total adjusted gross income while paying 40% of income taxes, making the income tax portion progressive. However, looking at your broader question - when analyzing the entire tax system (federal, state, local, sales, property, etc.), studies from the Institute on Taxation and Economic Policy show the overall system is much less progressive than federal income tax alone. In some states with high sales taxes and no income tax, the overall tax system can actually be regressive, with lower-income residents paying a higher percentage of their income in total taxes than wealthy residents.

Exactly! I moved back to the US after living in Germany for 5 years. Paid higher taxes there but never worried about healthcare costs, had excellent public transportation, and 6 weeks vacation. Here I pay slightly less in taxes but then have to pay $650/month for health insurance with a $4000 deductible. It's not just the tax rate that matters!

@Zara Ahmed That s'such a great point about the total cost of living versus just tax rates! I ve'been thinking about this a lot lately. When people complain about taxes, they re'often really complaining about their overall financial burden. Like, if my taxes went up 5% but I didn t'have to pay for health insurance, student loans, or worry about retirement savings because those were covered, I d'probably feel way less stressed about money overall. It s'wild how we focus so much on the tax percentage but ignore all the other mandatory expenses that other countries roll into their tax systems.

Is there a good rule of thumb for determining when you're officially "open for business" for a software startup? We incorporated in November 2023 but didn't launch our beta until March 2024. So were all costs between Nov-March startup costs or regular business expenses?

It's somewhat subjective, but generally for a software startup, you're "open for business" when you're actively developing your product with the intent to sell it or generate revenue. You don't necessarily need to have launched or have paying customers yet. For your specific timeline, expenses from November-March would likely be regular business expenses if you were actively working on product development during that time. The IRS looks at your activities rather than just whether you have revenue. If you were hiring developers, building your product, setting up infrastructure, etc., those activities constitute being "in business" even before your beta launch. Startup costs are really those that come before any business activity begins - like market research before deciding to form the company.

Yes, you definitely need to file Form 1120 even with zero income. C-Corps are required to file annually regardless of activity level or income. The only exception would be if you haven't officially incorporated yet.

$800 seems pretty high for such a straightforward filing! For a startup with minimal activity like yours, you might want to consider doing it yourself or finding a more reasonably priced CPA. Since you only have stock purchases (which go on the balance sheet) and basic business expenses, the 1120 should be relatively simple. Many tax software programs can handle this for much less than $800, or you could try one of the AI tools mentioned above like taxr.ai to help guide you through the process. Just make sure you don't skip filing entirely - the IRS penalties for not filing can be steep even if you owe no tax.

That's actually a different situation! If you're a W-2 employee who travels between work locations during your workday (not just commuting from home to work), the parking expenses at those temporary client sites might be reimbursable by your employer. Your employer should be reimbursing you for these business expenses. If they don't, unfortunately, post-2017 tax law doesn't allow W-2 employees to deduct these unreimbursed business expenses on your tax return anymore. The key distinction is: parking at your regular workplace isn't deductible, and now even parking at temporary work locations isn't deductible for W-2 employees unless your employer reimburses you.

Thanks for explaining. My company gives us a monthly allowance for travel expenses but its not enough to cover everything. Guess i should talk to my boss about increasing it since i cant write it off anymore! This whole tax thing is so confusing.