Regarding state taxes - is there any documentation I should keep to prove I was living abroad if my permanent address is still in the US? I'm worried my home state (California) will try to tax me even though I've been in Europe for most of the year.

For state tax residence documentation, keep copies of rental agreements, utility bills in your name from your foreign residence, entry/exit stamps in your passport, and airline tickets. California is particularly aggressive about claiming residents, so you'll want solid proof you've established a temporary residence elsewhere. If you're maintaining any California ties (driver's license, voter registration, bank accounts, etc.), document when those will be changed to your new location. Some digital nomads even take the step of establishing residency in a no-income-tax state before leaving the US, though that requires more planning and legitimate ties to that state.

I've used FreeTaxUSA for the past 2 years as a self-employed person living in Germany. They support all the forms you'd need including Schedule C, Form 2555 for Foreign Earned Income Exclusion, Form 1116 for Foreign Tax Credit, etc. Much cheaper than TurboTax and has worked great for my situation.

Yes, I've been checking "Where's My Refund" for months for my 2022 return. It just says "Your tax return is still being processed" with no other information. I did move in late 2022, but I updated my address with USPS. Do I need to update my address directly with the IRS too?

Yes, you absolutely need to update your address directly with the IRS. The USPS mail forwarding doesn't automatically notify the IRS of your new address. This could definitely explain why you might have missed important letters about your 2022 return! You can update your address with the IRS by submitting Form 8822 (Change of Address). In the meantime, I'd recommend using one of the methods others suggested to contact the IRS directly about your 2022 return - especially now that we know you moved, there's a good chance they've been sending verification requests or other important notices to your old address.

Yes! I received my very delayed 2022 refund about 3 weeks after filing my 2023 taxes. The two systems operate independently so one doesn't affect the other. My 2022 return had some issues with education credits that needed manual review, but they eventually sorted it out without me having to call.

Thanks for the advice! I'll definitely pay what I calculated I owe now. How long did your audit process take from start to finish? I'm worried this is going to drag on for months.

My audit took about 4 months total from first notice to final resolution. However, I made the mistake of sending my initial response by regular mail, and they claimed they never received it, which added about 6 weeks to the process. Once they actually reviewed my documentation, things moved relatively quickly - about 3 weeks for them to send a response accepting most of my explanation. There was one additional clarification they needed, which took another 3-4 weeks to resolve. The whole thing would have been much faster if I'd used certified mail from the beginning and if I'd paid the undisputed amount immediately.

That's bad advice. IRS charges both penalties AND interest, which can add up quickly. The failure-to-pay penalty is 0.5% of the unpaid taxes for each month, plus interest at the federal short-term rate plus 3%. You can always get a refund if you overpay, but you can't get penalties back as easily.

This is actually really good advice. I was in a similar position with a business vehicle and decided to keep it for an extra year. By that time, I had paid down the loan enough that the sale covered the remaining balance. Plus I was in a lower tax bracket that year, so the depreciation recapture hit me less hard.

How far back should we keep them? I've been doing backdoor Roth conversions for about 8 years now but honestly not sure if I still have all the forms.

You should keep them forever, honestly. The IRS doesn't have a central system tracking your nondeductible basis, so those forms are your only proof that you already paid tax on those contributions. If you're missing some forms from previous years, you might want to request transcripts from the IRS for those tax years to see if you can reconstruct your basis history. The problem is that if you can't prove your basis and you take distributions later, the IRS might treat the entire distribution as taxable, even though you already paid tax on those contributions.

Which tax software did you use? I'm doing my taxes this weekend and need to report a similar situation with nondeductible contributions and conversion.