These are great questions I hadn't thought to ask! Do CPAs typically provide some kind of service agreement that spells all this out, or is it more informal? I definitely want to make sure we know exactly what we're getting.

Yes, reputable CPAs will provide an engagement letter that outlines exactly what services are included, their fees, and any potential additional charges. This is a formal document that protects both you and them by setting clear expectations. It's completely normal and professional to ask for this in writing before proceeding. The engagement letter should detail everything - filing which forms, for which states, what happens if you need amendments, audit support terms, and for advisory services, how many consultations you get and what specific planning areas they'll address. If they're reluctant to provide this in writing, that's actually a red flag.

This is a really good point. I've seen TurboTax struggle with multi-state income and self-employment situations. One specific issue to check: TurboTax sometimes doesn't properly allocate income between states when you've moved mid-year, which can lead to double taxation. It also sometimes misses home office deductions for self-employed people.

Thank you all for the advice. I'm definitely going to file now after reading everything. I had no idea the failure-to-file penalties were so much worse than failure-to-pay. I'm going to look into both the installment plan and that Offer in Compromise program. One last question - if I get on a payment plan, will they still put liens on my property or anything like that? I'm renting right now but hoping to buy a house in the next couple years.

Generally, if you're on a payment plan and staying current with your payments, the IRS won't file a tax lien. However, this depends partly on how much you owe. For smaller debts (under $25,000) with an installment agreement, they typically don't file liens if you're compliant with the terms. For larger amounts, they might still file a lien as protection, even with a payment plan in place. The good news is that once you've made enough payments to get below a certain threshold, or if you've been in compliance with your plan for a specified period, you can request for them to withdraw the lien. This is something that changed with their Fresh Start program to help taxpayers.

This is so true. I'm in California and the Franchise Tax Board is WAY more aggressive than the IRS. They suspended my driver's license over a $2200 tax bill I didn't pay. The IRS gives you more time and options generally.

Is CCH Axcess something you can learn on your own though? I thought you needed to work at a firm that uses it to get access. Are there any training resources available for people who don't already work somewhere with these specialized tax software packages?

You're right that it's difficult to get hands-on experience with CCH Axcess without working somewhere that uses it. However, CCH does offer some free webinars and training materials on their website that can at least familiarize you with the interface and capabilities. For specialized tax software, your best bet is to look for YouTube tutorials and documentation online. Many vendors have published training materials that you can access. While it's not the same as hands-on experience, being able to speak intelligently about the software and its capabilities can still give you an edge in interviews. Some universities also have partnerships with these vendors to provide student access - worth checking if your school offers this.

This is a really important point. I think there's often a gap between what companies say they want and what they actually use day-to-day. Have you seen any shift toward using more advanced tools in recent years? Or is it still primarily Excel-based?

That's interesting about the state provisions. Do you know which states besides California allow home office deductions for employees? I'm in New York if that helps.

New York does allow itemized deductions for unreimbursed employee expenses, including home office expenses in some cases. You'd need to file IT-196 to claim these deductions on your state return. Other states that may allow employee business expense deductions include Alabama, Arkansas, Hawaii, Minnesota, Pennsylvania, and several others. Each has different rules and thresholds though, so you'll need to check your specific state's guidelines or consult with a tax professional familiar with your state's tax code.

I haven't heard of this before. How does it work exactly? Did you have to provide documentation or anything? My company is pretty flexible so they might go for something like this.

The rules actually work in your favor here! Since your German stepchildren are living with you (a US service member) in Germany, they can still qualify as US residents for tax purposes under what's called the "abode" test. Because your abode (tax home) remains in the US while you're on military orders, your dependents who live with you can still meet the residency test. You'll still need ITINs for them, but you should absolutely be able to claim them as dependents if you provide over half their support and they meet the other dependent tests. Your tax preparer might be confused because this is a special rule that applies to military families - civilian rules are different. Make sure your preparer is familiar with military tax situations, as there are several special provisions that apply only to service members.

thanks for the explanation! makes sense now why my preparer was confused - he mostly deals with local german clients and american civilians. gonna find someone with more military experience for next year. appreciate the help!

This is important to know - there's a difference between credits. For the Child Tax Credit, your child needs an SSN to qualify for the full amount. With just an ITIN, they only qualify for the non-refundable portion (up to $1,500) called the Credit for Other Dependents, not the full Child Tax Credit. This is one of those annoying distinctions the IRS makes.