Do you know if this is actually IRS compliant though? I thought you had to report every single transaction individually. My accountant friend told me the IRS could reject your return if you just do summary totals.

The IRS actually allows summary reporting as long as you have the detailed records available if requested. Form 8949 has a checkbox (Box C) that indicates you're reporting summary information rather than each individual transaction. FreeTaxUSA implements this correctly. Just make sure you keep your detailed transaction records from Coinbase for at least 3 years in case of an audit. The key is that your summary totals must exactly match what would be reported if you entered every transaction individually - no rounding or estimating.

Staking rewards are treated as ordinary income, not capital gains. In FreeTaxUSA, you'd report these under "Other Income" rather than with your crypto sales. The value is based on the fair market value of the crypto at the time you received each reward. Keep in mind that when you eventually sell crypto acquired through staking, you'll report capital gains/losses based on the difference between your selling price and the value at which you initially reported the staking reward as income.

Thanks for this info! My home country does have a tax treaty with the US. If my LLC didn't have any income this year (only losses), would I still need to file the Form 8833? And do you know if there are penalties for not filing it if it turns out I should have?

If you're claiming any treaty benefit that affects how your LLC interest is treated, you should file Form 8833 even if there's only losses. This includes situations where you're claiming the losses shouldn't be effectively connected income under the treaty. There are penalties for not filing Form 8833 when required - typically $1,000 for individuals, but it can be higher in some cases. The penalties might be waived if you have reasonable cause, but it's generally safer to just file it when in doubt. However, if you're not taking any special treaty positions and are simply reporting the losses as a non-resident with effectively connected income, then you might not need Form 8833. The instructions for the form provide more specific details on when it's required.

Good point! In the UK we have to file a specific supplementary page for foreign partnerships. My accountant said the losses from my US LLC were basically "trapped" in the US system until the business became profitable, couldn't use them on my UK return at all.

That's great to hear! I was worried they might miss things since they're students, but it makes sense they'd be extra careful if they're being evaluated. I'll definitely look into booking early. Did you need to bring anything special or prepare differently compared to going to a regular tax service?

You'll want to bring everything organized really well - all your income documents, receipts for deductions, last year's return if you have it, and especially documentation for things like childcare expenses since those need specific information. The session I had took longer than a regular tax appointment (about 2 hours) because they were being thorough and explaining things as they went. It was actually really educational! Just make sure to book your appointment early - I called in January for a mid-February slot and they were already filling up fast.

Exactly this! And don't be afraid to ask specifically about their experience with single parent returns, homeowner deductions, and healthcare costs. A good tax preparer should immediately mention checking for Earned Income Credit, Child Tax Credit, Child and Dependent Care Credit, and possible education credits for your kids depending on any activities they're in.

Oh I didn't realize the threshold for self-employment tax was so low! Thanks for pointing that out. I didn't keep a detailed mileage log but I have a rough idea of how many miles I drove. Is that going to be a problem? Can I estimate based on the number of deliveries I did?

Unfortunately, estimates generally don't cut it with the IRS for mileage deductions. They want contemporaneous records - meaning a log kept at the time you did the driving, not created later. If you have delivery records showing addresses, you could potentially reconstruct a reasonable mileage log using Google Maps to calculate distances. Start keeping a proper log now for 2025 taxes - there are several good apps that make this easy. For 2024, document what you can and be conservative with your estimates if you need to use them. The more documentation you have to support your deduction, the better position you'll be in if you're ever questioned.

Be careful with car expenses though - you can either take the standard mileage deduction OR itemize actual vehicle expenses (insurance, maintenance, etc), but not both. Usually the standard mileage rate works out better for most people.

Thank you for this - I hadn't even thought about the tax credits! I claimed the Earned Income Credit that year since I was in a lower bracket, but with the additional $8,500 I probably wouldn't qualify. Should I include a separate letter explaining the situation or just let the 1040-X speak for itself?

Including a brief, clear letter explaining the exact mistake is always a good idea. Keep it simple and factual - just state that you accidentally used your 2021 W-2 instead of your 2022 W-2, realized the error, and are proactively correcting it with the enclosed 1040-X. The EITC adjustment is exactly the kind of thing many people miss when amending, so you're on the right track. Be sure to recalculate it based on your correct income. The IRS appreciates taxpayers who thoroughly correct their returns rather than making partial fixes that require further correspondence.

I used TurboTax for an amendment last year and it was pretty straightforward. The biggest downside is that even though they help you prepare the amendment, you still have to print and mail it - no e-filing for amendments (at least when I did it). But it helped with all the calculations and made sure everything was consistent.