This is really helpful. Do you know if military pensions work the same way regarding RMDs? My father-in-law passed recently and had both military and federal civilian service.

Military pensions work very similarly - they're also annuities that are already in distribution mode, so they don't have RMDs in the traditional sense. The rules for calculating the taxable portion are a bit different though. For military pensions, if your father-in-law had any disability percentage in his military retirement, that portion would be tax-free. Also, if he participated in the Survivor Benefit Plan (SBP), there might be additional considerations for his beneficiaries. I'd recommend looking at IRS Publication 525 which has a specific section on military pensions alongside the information in Publication 721 for his civilian service.

Thank you for this info! I'll check through his papers for an OPM statement. I do remember him mentioning that part of his pension was from money he put in while working. So if I find this statement, would it clearly show what portion was taxable? Would this resolve the "unknown" issue in box 2a?

Yes, if you find that OPM statement, it should specifically show what portion of his annuity payments was taxable and what portion was a return of his contributions (non-taxable). This statement is usually sent annually, and it would definitely resolve the "unknown" in box 2a. If you can't find the statement, you can contact OPM directly as the executor of his estate. They should be able to provide you with this information. Another option is to check his previous year's tax returns to see how he reported his annuity income - the taxable vs. non-taxable breakdown would be consistent from year to year unless something changed with his benefits.

That's a really good point I hadn't considered. My first payment is supposed to be due on May 15th according to what I set up in TurboTax. Should I just go ahead and make that payment to the IRS directly if I still don't have confirmation by then?

Yes, absolutely make that May 15th payment even without official confirmation. You can pay directly through the IRS Direct Pay system on their website - just make sure to select the correct tax year and payment type (installment agreement). This way you're covered no matter what. If your payment plan is already in their system, the payment will be correctly applied to it. If there was some glitch and the plan wasn't properly set up, you've still made a payment toward your tax debt before any serious penalties kick in.

It happened to me once! Turned out TurboTax had a transmission error with that part of my return. I had to call the IRS and set up the payment plan directly with them. They were actually pretty understanding about it and didn't charge me any late fees since I could prove I tried to set it up on time.

This is really helpful advice. Should we get an attorney involved to draft the documents properly? Is there anything specific we should include in the promissory note to make it clear this is a legitimate loan transaction?

Yes, I would definitely recommend having an attorney draft or at least review your documents. The cost of legal help upfront is much less than dealing with IRS issues later. Make sure your promissory note includes all standard loan terms - principal amount, payment schedule, consequences for default, security interest in the property, etc. Even though there's no interest, everything else should look like a standard loan. Also include language acknowledging that both parties understand there may be imputed interest for tax purposes. Having your uncles keep a payment ledger showing receipt of your payments provides additional documentation of the loan's legitimacy.

That's actually a really good point. I went through something similar and was able to deduct the imputed interest against the rental income I was receiving. Definitely helped offset the tax burden on the rental income!

That's a good suggestion. There's a senior manager who seems approachable - maybe I could ask her if she'd be willing to do quick pre-reviews for me on the more complex returns. Did you find your mentor within your firm or through a professional organization?

I found my mentor within my firm initially, but I also connected with another experienced expatriate tax professional through our local CPA society's international tax committee. Professional organizations like that are goldmines for finding people who are willing to help. My in-firm mentor would spend 15 minutes with me before I submitted anything complex, which cut my review notes down dramatically. The external mentor was great for bigger-picture career advice. Don't underestimate how willing people are to help someone who shows genuine interest in improving!

The IRS actually has some decent webinars specifically about international taxation. There's also a certification program through the American Academy of Attorney-CPAs focused on international tax that goes into much greater depth than regular CPE.

Do they handle Schedule C for small businesses? I have a side hustle selling crafts online and I'm trying to file properly without spending a fortune.

Yes, they do handle Schedule C for small businesses and side hustles. I actually started using them when I had a small consulting gig on the side. It covers all the common business deductions and expenses. The interface for business income isn't quite as polished as TurboTax's, but again, completely free is hard to beat. If you have inventory for your crafts business though, just be aware you'll need to understand the basics of how to track that yourself - this is true of most DIY tax software.

That's interesting - I've always been hesitant about the cost of a CPA, but I never thought about the year-round advice aspect. How did you find your CPA? And did you interview multiple people before choosing?