Is there a specific place on the tax return where we note that we're using Form 4852 instead of a W-2? Or does just attaching the form take care of that?

Just attaching the Form 4852 to your return takes care of it - there's no special place you need to note it elsewhere on your return. The form itself has a field where you explain why you're using it instead of the W-2 (missing W-2, incorrect W-2, etc.), which gives the IRS all the information they need.

Yes! TurboTax actually handles this pretty well. When you get to the income section, there's an option that says something like "I don't have a W-2" or "My employer didn't give me a W-2." If you select that, it walks you through entering all the information from your paystubs and generates Form 4852 automatically.

Do you need to complete the whole application process to see the current amount, or does it show that information early in the process?

You'll see the current amount with penalties and interest fairly early in the process, usually on the second or third screen when you've entered your basic information. You don't need to complete the entire application or commit to any payment plan to view this information.

They used a local tax preparer, not software. That's part of the issue - they just have the paper copies the preparer gave them and aren't tech-savvy enough to navigate online tools themselves. I was hoping there might be a simple way to confirm the current amount without having to call since the phone wait times are so long.

Ugh, I feel even worse now knowing they saw me coming! Was there anything specific that made them charge me so much? I thought maybe it was the EIC calculations that were complicated, but you're saying that's actually simple?

The EIC and child tax credit calculations are completely automated in their software system. It's literally just clicking a few buttons and the computer does all the work. What they did was charge you their "deluxe" or "premium" package rates because you had tax credits. These places train their preparers to identify clients who might have refundable credits because those clients are often less price-sensitive (they're focused on the refund amount, not the preparation fee). They know you're getting a larger refund with those credits, so they take a bigger cut. Next year, remember that your return is actually quite straightforward and any of the major tax software options could handle it for a fraction of the cost.

Try Cash App Taxes next year (used to be Credit Karma Tax). Completely free for federal AND state, no income limits or hidden fees. I've used it for 3 years with W-2s, 1099s, and child credits with no issues.

No T5 slip yet since the film just hit festivals and hasn't had any commercial distribution. But that's good to know for the future! I am in Ontario - is the provincial credit something I apply for directly or does the production company handle that too?

The Ontario Film and Television Tax Credit is also handled by the production company, not individual investors. Similar to the federal CPTC, it's designed to incentivize production companies to create content in Ontario. As an investor, your tax benefits come primarily through how you classify your investment and any income it generates. When the film does eventually generate revenue, make sure the production company has your current address to send any T5 slips. For now, you'll just need to report the investment itself as we discussed above. Keep good records of all your investment documentation - if the film becomes commercially successful or if it fails entirely, the tax implications will differ.

You might be able to claim a capital loss if you can demonstrate that your investment has become worthless. You'd need documentation showing the production has been abandoned or the company has dissolved. Typically, you'd need to file an election under subsection 50(1) of the Income Tax Act to deem the investment disposed of at the end of the tax year. The CRA will want evidence that the investment has no reasonable chance of future value. A letter from the production company stating the project has been abandoned would be helpful.

That's a really good point about banking. Did you have any issues with payment processors too? We'll be using Stripe and PayPal for most client payments, and I'm wondering if there are any special considerations with a foreign co-owner.

Stripe was actually fairly straightforward for us. They required identity verification for both owners, but having a US-registered business with a US bank account made it workable. My foreign partner had to upload his passport and proof of address, but no major hurdles. PayPal was a bit trickier because they wanted a US phone number for verification for both owners. We ended up using my phone for business purposes and adding him as an authorized user rather than setting him up with full owner access. Not ideal, but it worked. Just make sure your operating agreement covers how payment processors are handled so there's no confusion about who has access to what.

Do you use any specific tools for managing the partnership agreement and financial distributions? We're setting up with a partner in Malaysia and realized we need better tracking for partner draws and tax withholding.