Thanks for this perspective. I hadn't considered the "round-trip transaction" angle. If I were to actually relocate and live abroad full-time (which I'm planning to do anyway), would that strengthen the legitimacy of this arrangement at all? Or would the IRS still view the structure itself as problematic regardless of my residency?

Actually living abroad full-time would certainly help satisfy the physical presence test for the Foreign Earned Income Exclusion, but it wouldn't necessarily legitimize the overall structure. The IRS would still question why this particular business arrangement is necessary. They'd look at factors like: Does this foreign management company have any employees besides you? Does it manage properties for anyone else? Is the fee structure comparable to what unrelated property management companies charge? Does the company have legitimate business operations in the foreign country?

Is that the same as the GILTI tax stuff I keep hearing about with foreign corporations? I thought that made foreign corps less attractive after the 2017 tax law changes.

Thanks for mentioning this! I hadn't even thought about retirement accounts. Is one better than the other between SEP IRA and Solo 401(k)? And can I still contribute for 2024 or is it too late?

Solo 401(k) generally allows higher contributions when your income is lower because it has both an "employer" and "employee" contribution component. SEP IRAs are simpler to set up but only allow the "employer" contribution. For 2024 contributions, you can still open and fund both types until your tax filing deadline (including extensions). So if you file for an extension, you could potentially contribute all the way until October 15, 2025 for the 2024 tax year. That gives you plenty of time to figure out exactly how much you can afford to contribute once you know your full 2024 income.

I've used both methods. For my small apartment office (about 100 sq ft), the simplified method gave me $500 deduction ($5 × 100). When I calculated actual expenses (rent percentage, utilities, etc.), it came to nearly $2,200! Definitely worth tracking real expenses if your rent/mortgage is high.

Will this work if I'm not making a payment? I don't think I'll owe anything, but still need the extension to get my paperwork together.

If you don't need to make a payment, then Direct Pay won't work for your situation. In that case, you should use one of the free filing options mentioned above - IRS Free File or one of the tax software programs. Since you don't think you'll owe, just be absolutely certain about that. If you end up owing even a small amount and didn't pay by the regular deadline, you'll face penalties and interest. Many people accidentally underestimate what they owe and get hit with unexpected charges.

This is really good advice. Is there a calculator or something to help estimate if you'll owe? I haven't really kept good records this year.

Thanks for the suggestion about adjusting my withholding going forward. Do you know how I would calculate how much extra to withhold to make up for this year's shortfall? And you're right about the state taxes - I need to check those too. I was so shocked by the federal issue that I didn't even think about that.

You can use the IRS Tax Withholding Estimator on their website - it lets you input how much has been withheld so far and will calculate what you need for the remaining paychecks. Just select that you want a bigger refund and it'll tell you what number to put on your W-4. For your state taxes, each state has different rules, but if they weren't withholding federal, there's a good chance they missed state too, especially if you're in a state that bases its withholding on the federal W-4 form.

This is a really good point! OP needs to check their employment status. My neighbor thought she was a regular employee but her company had her classified as a 1099 contractor (incorrectly) and wasn't withholding anything. Led to a huge tax bill and she had to file an SS-8 form with the IRS to get it sorted out.

The transcript trick is legit. Go to irs.gov and search for "Get Transcript Online." You'll need to create an account if you don't have one (they verify your identity with credit report info). Look for the Account Transcript for 2024 once you're in. Check for codes like 846 (refund issued) or 570/971 (hold/notice).

Nope, I'm not claiming either of those. Just a standard return with W-2 income. Thanks for the suggestion though! I'm just going to be patient based on what everyone is saying. Seems like this is pretty normal even though it's frustrating.