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If you have your bank statement showing the payment cleared, another option is visiting your local Taxpayer Assistance Center in person. You need to make an appointment first by calling 844-545-5640. They often can pull up your records on the spot and see what happened to your payment. When I had a similar issue, the in-person IRS assistant saw that my estimated payment had been correctly received but was applied to the wrong tax year (they applied it to 2021 instead of 2022). She fixed it right there in the system while I waited!
Are appointments at TACs still backed up for months? Last time I tried to make an appointment it was a 3-month wait in my area.
It varies by location. My area (mid-sized city in the Midwest) had about a 3-week wait in June. However, they keep some slots open for urgent issues like notices with impending deadlines. When you call, specifically mention you have an IRS notice with a deadline and they may be able to fit you in sooner. They also now have "virtual appointments" in some locations where you can video chat with a representative, which sometimes have shorter wait times than in-person meetings. Worth asking about when you call the appointment line!
Did you check your IRS online account to see if the payment shows up there? Sometimes the payment posts correctly to your account but doesn't get matched to the return properly. Go to irs.gov and create/login to your online account - you can see all payments received there.
Have you considered using a tax software that specializes in expat taxes? I've been using TaxAct Premium for filing with my Canadian spouse. It walks you through all the foreign spouse questions step by step and costs way less than a CPA. The key forms you'll need to know about are: - Form 8840 (Closer Connection Exception Statement) - Form 8833 (Treaty-Based Return Position) - Form 1116 (Foreign Tax Credit) - FinCEN Form 114 (FBAR for foreign accounts) The software prompts you for all of these and explains when they're needed. Just make sure you read each section carefully.
Thanks for the suggestion! Does TaxAct handle the resident vs. non-resident alien distinction well? And did you find it easy to understand whether your spouse's foreign income needed to be reported? I'm worried about missing something important and getting flagged for audit.
TaxAct does handle the resident vs. non-resident alien distinction pretty well. It asks a series of questions to determine which status applies to your spouse and then guides you through the appropriate forms based on your answers. The software has improved significantly in this area over the last few years. Regarding foreign income reporting, it was straightforward once I understood the basic principles. The software prompts you about foreign earned income and walks you through Form 2555 (Foreign Earned Income Exclusion) or Form 1116 (Foreign Tax Credit) depending on your situation. I found their explanations clear enough that I could make informed decisions without needing an expensive CPA.
Don't forget about FBAR requirements! My wife is Brazilian and we got hit with a $10,000 penalty for failing to report her foreign bank accounts that had over $10,000 combined. The threshold is surprisingly low. Also, make sure you understand FATCA requirements (Form 8938) which is separate from FBAR but has similar purposes. The thresholds are different though - for married filing jointly living in the US, you need to report if the total value of foreign assets is more than $100,000 on the last day of the tax year or more than $150,000 at any time during the year.
Did you try to get the FBAR penalty abated? I've heard they can be reasonable if it's your first offense and you can show it wasn't willful neglect.
Something nobody's mentioned yet is that you should request a copy of the partnership agreement if you don't already have it. When you inherited your share, it should have come with documentation about the partnership terms. Some partnership agreements actually restrict distributions and require capital reserves to be built up to certain levels before making distributions. This could explain why you're seeing income on the K-1 but not getting much in distributions. Also, check if there's a partnership meeting you can attend. As a partner, you generally have rights to information about the business operations and financial status. You might discover they're planning major renovations or have other reasons for retaining earnings.
Would the partnership agreement actually help with tax reporting though? I'm in a similar situation and trying to figure out if requesting all this extra documentation is worth the hassle or if I should just hire a CPA.
The partnership agreement won't directly help with tax preparation, but it will help you understand if what you're experiencing is normal based on the terms you agreed to. It might reveal that they're required to maintain certain capital reserves or explain the conditions under which distributions are made. Having this information could help you decide whether to keep your interest or try to sell it. Some partnership agreements also specify how tax items should be allocated, which could be relevant if you think the K-1 allocations seem unfair. If the amounts involved are significant, hiring a CPA who specializes in partnerships would definitely be worth considering.
Check out line 19 (distributions) of your K-1 and compare it to line 2 (real estate income). If line 19 is consistently lower than line 2, that means the partnership is retaining earnings rather than distributing them. This is common but can create tax headaches. Also, make sure you're tracking your "basis" in the partnership. Your basis increases when you report income from the K-1 and decreases when you receive distributions. This tracking is SUPER important because: 1) If you ever sell your interest, your basis determines your gain/loss 2) If your basis ever goes to zero, distributions become taxable 3) Certain losses can be limited based on your basis Most tax software doesn't handle basis tracking well, so you might need to maintain a separate spreadsheet or get professional help.
For cheap filing of 1040-NR with such a small amount, go with FreeTaxUSA. They charge around $15 for the federal nonresident return. I've used them for the past three years for my 1040-NR filings with an ITIN. Just be aware that the interview process doesn't always address every nonresident situation, so you might need to double-check some entries. But for a simple return with just $410 in business income, it should be straightforward.
Thanks for the suggestion! Have you ever run into any issues with FreeTaxUSA when filing with an ITIN instead of an SSN? I heard some tax software has problems processing ITINs correctly.
I've never had any issues using an ITIN with FreeTaxUSA. Their system is set up to handle ITINs just like SSNs during the filing process. One tip though - double-check that your name appears exactly as it does on your ITIN documentation. Even minor differences can cause processing delays with the IRS. Also, make sure you select the correct filing status for nonresidents, as the options are more limited than for residents.
Just a heads up - make sure you're actually required to file. For nonresidents with just US business income, you generally need to file if you have a US trade or business regardless of the amount. If it's just passive income under $4000 though, you might not need to file at all. But since your goal is keeping the ITIN active, filing makes sense. Just wanted to clarify that point.
That's not entirely accurate. The IRS requires nonresidents engaged in a US trade or business to file a 1040-NR regardless of the amount. There's no minimum threshold for business income like there is for passive income.
Christopher Morgan
Anyone else think its weird that we have to verify our identity AFTER filing? Shouldn't that be a step before we submit all our personal info? š¤
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Aurora St.Pierre
Pro tip: if you're really desperate, contact your local Taxpayer Advocate Service. They can sometimes help push things along if you're experiencing financial hardship due to the delay.
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Noah Irving
ā¢I've never heard of this before. How do I get in touch with them?
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Aurora St.Pierre
ā¢You can find your local office on the IRS website. Just search for 'Taxpayer Advocate Service' and there should be a tool to locate the nearest one to you.
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