I hadn't even thought about reporting bank accounts! What's the threshold again - is it $10k across all accounts combined or each account needs to be over $10k?

It's $10k across all foreign accounts combined at any point during the year. So if all your UK accounts added up to over $10k even for one day, you need to file. This includes accounts you have signature authority over, even if not yours (like a joint account with a partner or business account). The form is fairly straightforward but needs to be filed electronically through the FinCEN BSA filing system. You'll need to report maximum account values, account numbers, bank addresses, etc. Keep in mind this is separate from your tax return and goes to the Treasury Department, not the IRS.

That fee used to be like $450 not that long ago! The US gov dramatically increased it when too many people started renouncing. Plus if your net worth is over $2M or your average tax liability over 5 years exceeds a certain threshold, you could be hit with an exit tax. Not a simple solution unfortunately.

I hadn't heard of a PPIA before - that sounds like it might be a good option for my situation. Does the 10-year collection statute still apply even with the large amount I owe? And what happens during those financial reviews every 2 years?

Yes, the 10-year collection statute of limitations applies regardless of the amount owed, though be careful because certain actions can extend that period. The clock starts from the date the tax was assessed, not from when you enter into the agreement. During the biennial financial reviews, the IRS will request updated financial information to determine if your financial situation has improved. If you're making substantially more money or have acquired significant assets, they may increase your monthly payment amount. Conversely, if your situation has worsened, you might qualify for a lower payment. This is why documentation of your expenses and financial situation is crucial throughout the process.

This is actually a really important point. Tax debt that's more than 3 years old CAN be dischargeable in bankruptcy under certain conditions. I consulted with a bankruptcy attorney for my own tax issues and while I ended up not filing, the consultation alone gave me leverage in negotiating with the IRS because I understood my options better.

Does FTA work for all types of penalties? Like would it work for this specific CP 162 notice for partnership returns?

Yes, the First Time Abatement policy applies to the failure-to-file and failure-to-pay penalties for Form 1065 (partnerships), which is what CP 162 notices typically address. The FTA is available for most common penalties including these partnership return penalties. The key qualification is having a clean compliance history for the three years prior - meaning you filed all required returns and paid (or arranged to pay) all tax due. If your LLC is newer than three years, they'll look at your personal tax compliance history as the partner/member.

Better yet, e-file everything possible! I haven't mailed anything to the IRS in years. Extensions can be e-filed too, even for partnerships.

Thank you! I've already updated both my W4 forms for this year, but I'll definitely use that calculator to double-check everything. Is it normal to owe this much though? I'm still shocked at how big the difference was.

Yes, unfortunately the amount you owe is pretty typical for this situation. When you add a second job with similar income, you're essentially doubling your income but your withholding isn't doubling the tax paid because each employer is calculating withholding based on their portion only. For example, if you make $80K at one job, you might be withheld at an effective rate of about 12-15%. But when your total income is $160K, portions of that income are taxed at 22% or 24% brackets. That difference between what was withheld (at lower rates) and what you actually owe (at higher rates) is where that $5K+ bill comes from.

This is good advice. Also, make sure you're taking the standard deduction at a minimum ($12,950 for single filers for 2022). And if you made any charitable contributions or had work-related expenses that weren't reimbursed, those might help too.

Thanks for bringing this up! I do have some student loan interest from when payments were still required, and I contributed to my 401k at both jobs. I'll definitely look into those deductions. Do you think it could significantly reduce what I owe?

Wait, really? I've been investing for 5 years and never knew this. So if my dividends automatically buy more shares, I need to add those amounts to my original investment when calculating gains/losses?

Exactly! When dividends are automatically reinvested to buy more shares, you've already paid income tax on those dividends in the year you received them. Those reinvested amounts become part of your cost basis. If you don't add them to your cost basis, you'll end up paying tax twice - once when you received the dividend, and again when you sell the shares (because your gain would appear larger than it actually was). This is especially significant for long-term holdings where years of reinvested dividends can substantially increase your true cost basis.

I've been using TaxAct for the last three years and it's pretty good with investments. You can import most 1099-B forms directly or enter them manually. Much cheaper than TurboTax but still gets the job done.