That's really interesting about the accountable plan! I've never heard of this before. Do you know if there's a specific way I should approach HR about it? Is there any official documentation I can refer to when explaining this?

The best approach is to frame it as a win-win for both you and the company. When you talk to HR, mention that accountable plans are recognized by the IRS and allow the company to deduct these business expenses while providing tax-free reimbursements to employees. For documentation, refer them to IRS Publication 463, which covers accountable plans. You could also point out that many companies are implementing these plans specifically for remote workers since the pandemic. I created a simple one-page proposal explaining the basic requirements: proper business connection, timely substantiation of expenses, and returning excess amounts. My HR was actually grateful since other employees had been asking about similar arrangements!

That's actually a really smart approach. What kind of documentation did you need to provide for the Lifetime Learning Credit when using your home office equipment for courses? Did you have to get anything from the course providers?

Thanks for your input, but I'm actually dealing with a larger amount - the refund was around 3,800 CAD, and the exchange rate has changed enough that the loss is more than $300. I'd prefer to do things by the book, especially since I'm planning to apply for citizenship in a couple years and don't want any tax issues to complicate that.

Fair enough. For amounts over $200, it's probably worth reporting correctly. Just wanted to point out that sometimes the tax benefit isn't worth the extra paperwork, but in your case it makes sense to get it right.

That's actually a good point. I use the XE Currency app to track exchange rates and set alerts when they hit certain thresholds. CAD has been trending up a bit lately against USD compared to last year.

But that assumes you'd otherwise be working during that time. If you're doing taxes on a weekend when you'd just be watching Netflix anyway, isn't the calculation different?

You make a fair point about the weekend time value! I hadn't considered that angle, and you're right that if it's time you wouldn't be earning money anyway, the calculation changes. My main point was just to be mindful that sometimes we focus so much on saving the prep fee that we don't consider the value of our time or potential mistakes. But for a simple return like OP described, I agree it's likely worth it regardless of when you do it.

I've used FreeTaxUSA for 3 years now and love it. Federal filing is free and state is like $15. Interface isn't as slick as TurboTax but it does everything you need. I have W-2, mortgage interest, and retirement contributions too - worked great.

Wait seriously? So even if they approve my extension request, I'm still on the hook for late penalties for not getting them to the contractors by 1/31? That's not what I was expecting at all.

Yes, that's correct. The extension for 1099-NEC forms only applies to the portion you file with the IRS, not the requirement to furnish copies to recipients by January 31. This is different from some other tax forms, and it confuses many business owners. The recipient copies were legally required to be delivered by January 31 regardless of any extension. This is because the recipients need this information to accurately prepare their own tax returns. However, documenting your reasonable cause (the employee turnover) is still important, as it may help reduce penalties through a penalty abatement request even though it won't eliminate them entirely.

The IRS rarely hits people with the "intentional disregard" penalty though - that's usually reserved for repeat offenders or when there's evidence you were deliberately trying to avoid your obligations. As long as you're making a genuine effort to correct the situation now, you'll likely just face the standard penalties.

Thanks for pointing this out! My wife does have an SSN since she's been working with her F1 OPT. Do you know if making this election means we'd have to keep filing jointly every year going forward? Or can we choose differently next year?

That's good she already has an SSN - that will make the process much smoother. Regarding future years, the election remains in effect for all future tax years until it's terminated. You can terminate it in several ways: either spouse can revoke it by filing a statement, it automatically terminates if either spouse dies, you get legally separated under a decree of divorce or separate maintenance, or the IRS can terminate it with notice to either spouse if they determine that information to determine tax liability is inadequate. So yes, you're essentially committing to joint filing going forward unless one of those termination events occurs. That's why it's important to consider the long-term implications before making the election.

I tried doing this in TurboTax last year and it was a nightmare. It technically can handle it, but you have to know exactly what you're doing. The software doesn't really guide you through the 6013(g) election process clearly. For the capital gains, you can manually enter them in TurboTax, but again, you need to know exactly where to put everything.