Thanks for this tip! My tax preparer didn't mention the self-employment tax deduction at all. Do you know if this is something that gets calculated automatically or do I need to specifically ask about it? Also, can I still set up a SEP IRA for last year's taxes or is it too late now?

Any decent tax software or preparer should calculate this automatically, but it never hurts to specifically ask to make sure it's included. It appears on Schedule 1 of your 1040 as an adjustment to income. You actually can still set up and contribute to a SEP IRA for last year! You have until your tax filing deadline including extensions (so potentially as late as October 15, 2025), though you need to establish the account before filing your return. The contribution limit is either 25% of your net self-employment income or $69,000 for 2024, whichever is less. This is one of the best ways to reduce your tax burden if you have the cash available to make contributions.

The home office deduction used to be a bigger red flag years ago, but it's much more common and accepted now, especially for legitimate 1099 contractors. The key is making sure the space is used "regularly and exclusively" for business. That means no using your office for personal stuff. If you keep good records and photos of your office space and can show it's dedicated to work, you'll be fine. Just be accurate with the square footage calculation - don't claim your entire apartment if you're only using one room!

What about retirement accounts in foreign countries? I have something similar to a 401k in Australia, and I've heard conflicting things about how the US treats these accounts.

Foreign retirement accounts are one of the trickiest areas for US expats. Unfortunately, unless there's a specific provision in the tax treaty between the US and your country (like there is for Canadian RRSPs), the US often doesn't recognize the tax-deferred status of foreign retirement accounts. For Australian superannuation accounts, they exist in a gray area. Some tax professionals treat them as equivalent to US retirement accounts, others report them as foreign trusts requiring complex reporting, and others treat them as regular investment accounts. Recent IRS guidance has leaned toward treating them as foreign pension plans, but it depends on your exact situation. I recommend getting specific advice on this issue from a tax professional who specializes in US-Australia tax matters, as getting it wrong can have significant consequences.

Thank you for sharing your experience! It's reassuring to hear from someone who's been through the same situation. I was definitely imagining scenarios where I'd be pulled into secondary inspection and questioned about my tax situation! Did you use the Streamlined Filing Procedures that others mentioned? And how long did the whole process take from starting to get compliant until you were fully caught up with the IRS?

Yes, I used the Streamlined Filing Procedures - it was fairly straightforward but took about 3 months from start to finish. I gathered all my foreign tax documents, bank statements, and employment records first (that was the most time-consuming part). Then I worked with a tax preparer who specialized in expat issues to complete the necessary forms. The actual filing involved submitting 3 years of back tax returns along with a statement explaining why I failed to file (I just honestly explained I didn't understand my obligations as a dual citizen living abroad). For the FBAR forms (reporting foreign accounts), I had to file 6 years worth. About 4 months after submission, I received notices confirming everything was processed. I didn't owe any taxes thanks to the Foreign Earned Income Exclusion and Foreign Tax Credits for taxes I'd already paid in the UK.

This is great advice. What specific questions would you recommend asking to really test if they know eCommerce? And did you find someone who charges flat monthly rates or hourly?

I actually tried this already but unfortunately the company I worked for in 2018 was bought out in 2020 and the new owner purged a lot of the old records. They told me they only kept the "legally required minimum" which apparently didn't include my 2018 W-2. Really frustrating since this would've been the easiest solution!

That's definitely frustrating! In that case, your next best option is to request a Wage and Income Transcript from the IRS, which will show all reported W-2 information. This is different from the Tax Return Transcript you tried to access online. You can request this specific transcript using Form 4506-T (check box 8 on the form). Even though the online system only goes back to 2020, the IRS can provide Wage and Income Transcripts going back 10 years when requested via mail or fax using this form. This would show exactly what was reported to them on your W-2, including state withholding information.

This is not entirely accurate. While the burden of proof does shift in certain circumstances, the general rule is that taxpayers bear the burden of proving their income, deductions, and credits. If the state is claiming you had income but paid no tax, they usually have some evidence of the income (like W-2 reporting) but are claiming you never filed or paid. The statute of limitations point is valid though - worth checking your state's specific rules.

Can you actually enforce something like that legally though? I thought tax benefits were separate from custody agreements?

You absolutely can include tax arrangements in your custody agreement, and the court can enforce it. Many parenting plans specifically address who claims the child in which years (alternating, always one parent, etc). If it's not in your custody order yet, you can still create a separate written agreement. While not as strong as a court order, it's still evidence of your agreement if there's a dispute later. Some parents even use a service like Our Family Wizard to document these agreements, which gives them more weight since the communication is timestamped and can't be altered later.

No, you can't split federal and state. Most states require your filing status and dependents to match your federal return. It would raise red flags if two different people claimed the same kid on federal vs state returns.