Wouldn't mailing take forever to process though? I heard the IRS has massive backlogs with paper returns and it could take 6+ months. Would FAFSA accept just a mailing receipt as proof of filing?

Current processing time for paper returns is about 6-8 weeks, not 6 months. That used to be the case during COVID, but they've caught up significantly. Most financial aid offices understand the IRS processing timelines and will accept proof of mailing (certified mail receipt) as temporary documentation while the return processes. You can follow up by ordering a tax transcript once it's processed, which is what they ultimately want to see. Just contact your financial aid office first to confirm this approach works for them - different schools have different policies.

Thanks for bringing this up! I actually looked into this. Even though they weren't required to file based on the income threshold, they had federal taxes withheld from their paychecks. So we're filing to get that refunded - it's about $300 which would help with college expenses. Also, their college financial aid office specifically requested a 2022 tax return or transcript rather than the non-filing statement. Apparently, they've had issues with the non-filing verification process this year.

That makes perfect sense. Getting that $300 back is definitely worth filing for, and if the school specifically wants the return rather than a non-filing statement, you're on the right track. Just as an FYI for future reference, for very low incomes like this, your child might be able to claim "exempt" on their W-4 to avoid having federal tax withheld in the first place. That way they get all their money upfront instead of waiting for a refund. Something to consider for their current job if applicable!

That Excel approach sounds really helpful! Would you be willing to share a sanitized version of that template? I'm trying to create something similar but want to make sure I'm setting it up correctly.

I can't share the actual file for confidentiality reasons, but I can describe the basic structure. I have columns for each relevant CFCs and rows that calculate: The CFC's total E&P for the year, then the portion that's Subpart F and the portion that's GILTI. Below that, I list the total foreign taxes paid by the CFC. Then I compute the deemed paid taxes by multiplying the foreign taxes by the ratio of included income (Subpart F or GILTI) to total E&P. Don't forget that for GILTI inclusions under 960(d), you only get 80% of the deemed paid taxes. And everything needs to be tracked by separate income baskets too!

Thanks for pointing that out! I've been confused because some of the materials I'm looking at seem to describe different systems. So post-TCJA we're not using the pooling method anymore? Is there a good source you'd recommend that covers the current rules?

I tried CoinTracker but the problem is some of my transactions were on smaller exchanges that don't connect well with these services. Plus I did some peer-to-peer transactions that don't show up on the blockchain in an obvious way. Do you think the IRS would accept a combination of blockchain data and my personal records?

Yes, a combination of blockchain data and personal records is a solid approach. The IRS understands that crypto documentation can be challenging. They mainly want to see that you're making a good-faith effort to report accurately. For those peer-to-peer transactions, create a separate log with as much detail as possible - dates, amounts, parties involved (you can anonymize the other party), and the purpose. If you have any chat logs, emails, or other evidence of these transactions, save those too. The more supporting evidence you can compile, the stronger your position will be if questioned.

That's not quite accurate. The burden of proof for cost basis is generally on the taxpayer, not the IRS. If you can't prove your basis, they can indeed treat your entire proceeds as gain. I've seen it happen.

Wait really? So we're not supposed to use decimal points at all in the tax forms? I've been doing mine wrong for years then...

It depends on the specific field in the tax software. Some fields accept decimals, while others require whole numbers only. The problem is that most tax software doesn't warn you about this until you try to e-file and get rejected. For example, estimated tax payment fields typically want whole dollars only, no cents. But some deduction fields might accept exact amounts with cents. The IRS e-file specifications are incredibly detailed about which fields accept which formats, but regular taxpayers never see these rules. That's why these errors are so frustrating - we're basically being asked to comply with technical specifications we can't see.

OMG thank you!!! I think this might be my issue. My employer's name has an ampersand in it (Something & Sons LLC) and I keep getting rejected. Going to try removing it now!

But doesn't the new W-4 not have allowances anymore? I thought they got rid of the "0 allowances" option in 2020 when they redesigned the form.

You're absolutely right, and I should have been more clear. On the new W-4 form, I don't check the multiple jobs box, and I don't claim any adjustments to income or deductions. This effectively results in maximum withholding (similar to what "0 allowances" used to do on the old form). The principle is the same though - I let my main job withhold at the standard rate, and then my smaller job also withholds at the standard rate. Since the withholding tables don't "know" about my other job, I end up with a bit more withheld than necessary, which gives me a refund rather than owing taxes.

Ugh, the same thing happened to me! I checked the multiple jobs box on both W-4s and my take-home pay was depressingly small. Huge refund but it wasn't worth struggling all year.