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.

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.

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.

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.

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!

This is great advice. I had the same issue last year and when I checked my online account, I could see the payment was actually there - it just hadn't been applied to my balance due. Took a screenshot and included it with my response to the IRS, and they fixed it without further hassle.

Could you elaborate on point 3? I'm not familiar with how a family foundation would work as the charitable beneficiary. Would you still effectively "lose" the money, or can family members somehow benefit from the foundation?

Happy to elaborate. A family foundation is still a legitimate charity - the assets irrevocably leave your personal control and must be used for charitable purposes. However, family members can serve as board members/trustees and direct the foundation's charitable activities. For example, if you care about education, your foundation could fund scholarships or educational programs. You can't use it to directly benefit family members (like paying for your kids' college), but you can focus on causes you care about, potentially hire family members to run it (with reasonable compensation), and create a family legacy through the charitable work. The assets are still permanently devoted to charity, but you have influence over how they're used for charitable purposes.

CLATs are an interesting alternative worth exploring. With a CLAT, charity gets payments for a specified term, and whatever's left goes to your non-charitable beneficiaries. If investments outperform the IRS assumed rate, you can potentially transfer significant assets to heirs with reduced gift/estate taxes. It doesn't provide the income stream a CRUT does though, so depends on whether OP needs ongoing income or is more focused on eventual wealth transfer.

Did your tax preparer need to see the 5498 form, or were they able to process everything with just the 1099-R and the documentation showing the transfer/merger?

My tax preparer didn't need the 5498 form at all. She was able to process everything correctly with just the 1099-R and my documentation showing the transfer happened because of the merger. She told me that tax preparers are very familiar with this situation and know exactly how to code it properly in the tax software. The 5498 forms are more for record-keeping and verification if the IRS has questions later, but they aren't necessary for preparing and filing an accurate return.

I used TurboTax last year for this exact scenario. It definitely handles it, but you need to make sure you answer the questions correctly. When it asks about your 1099-R, there's a specific question about whether you rolled over the distribution into another qualified retirement account. Make sure you say YES to that question, and it'll treat it as non-taxable. It'll also ask you to enter the amount rolled over, which should be the full amount from the 1099-R in your case.