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Has anyone used the IRS FIRE system for electronic filing? I have like 30 contractors and handwriting or even doing fillable PDFs for all of them sounds like a nightmare.
Quick tip - if you're printing these yourself, make sure you're using a laser printer, not inkjet! The IRS can reject forms that smudge or bleed, which happens with inkjet printers. I learned this the hard way last year and had to redo everything at the last minute.
Another option nobody's mentioned - have you considered using a courier service to take the form to your client for signature? I've done this a few times for elderly clients who can't leave home. It costs a bit extra but less than potential penalties for improper filing. The courier can wait while they sign and bring it right back to you. Just make sure they use blue ink because the IRS sometimes flags black ink signatures as potential photocopies.
That's a really smart idea I hadn't considered! Do you have any suggestions for reliable courier services that can handle sensitive tax documents? And is there any specific wording I should include in my instructions to make sure everything goes smoothly?
I usually go with established courier services like UPS or FedEx for sensitive tax documents, as they have better tracking and security protocols. Local courier services can work too if they're reputable. When sending instructions, I include a cover sheet with very clear directions: "Please sign in BLUE ink on line X, date on line Y, do not write outside these areas, and do not make any other marks on the form." I also highlight the signature areas with removable arrow sticky notes and include a blue pen in the package. Make sure to call your client ahead of time so they know exactly when to expect the courier and what they'll be signing.
Have you considered filing for an extension? If you're running up against the deadline and aren't sure about the signature requirements, you could buy yourself some additional time to either get a proper wet signature or research alternative filing methods. Just a thought!
Extensions don't apply the same way for information returns like 1099-NECs. The deadline is January 31st (for giving copies to recipients and filing with the IRS), and penalties start accruing immediately after the deadline. You can request a 30-day extension using Form 8809, but you need a good reason, and it has to be filed BEFORE the due date.
One thing nobody's mentioned yet about your situation is state taxes. Depending on which state you're in, you might not get the same foreign tax credits at the state level as you do federally. Georgia (if I'm remembering correctly from your post) does allow FTCs but they calculate them differently than the federal version. Also, track your days in each country carefully! The substantial presence test has exceptions under the treaty that might apply to you depending on your specific situation.
That's a really good point about state taxes that I hadn't considered. I am indeed in Georgia, so I'll need to look into how they handle FTCs. Do you know if there's a substantial difference in how they calculate it compared to federal? And regarding the day counting - I've been tracking pretty carefully since I arrived in May, but are there specific thresholds I should be aware of under the treaty?
Georgia's FTC is more limited than the federal credit. They only allow credit for taxes paid to foreign countries on income that's also taxed by Georgia. The calculation is based on the ratio of your foreign income taxed by Georgia to your total Georgia taxable income. So if some of your Canadian income isn't subject to Georgia tax, you can't claim FTC for taxes paid on that portion. For the treaty's substantial presence test exceptions, there's the "closer connection" exception that might apply. If you maintain more significant ties to Canada (permanent home, family, economic connections, etc.) and are present in the US for fewer than 183 days in the calendar year, you might be able to claim that your tax home is still Canada despite meeting the substantial presence test. You'd need to file Form 8840 to claim this exception.
Don't forget about Social Security/Medicare taxes! This is often overlooked in international situations. There's a "totalization agreement" between the US and Canada that prevents double taxation of social insurance contributions. If you're working temporarily in the US (usually defined as 5 years or less), you may be able to continue contributing only to the Canadian system and get a certificate of coverage to exempt you from US Social Security taxes.
Just a heads up - I went through this exact same thing with a small client who suddenly needed my SSN after 2 years. Make sure you ONLY provide it on an official W-9 form, not just in an email or text. And make sure they're actually registered as a legitimate business. I learned the hard way that my "client" was actually operating without proper business registration and couldn't legally issue 1099s anyway.
What happened in your situation? Did you get in trouble with the IRS? Im worried about something similar.
I didn't get in trouble since I'd been reporting all my income properly on my Schedule C forms each year. But it created a mess because they tried to issue me 1099s under a business name that wasn't properly registered with the state or IRS. I ended up having to provide additional documentation during tax filing to explain the mismatch between the 1099 information and the business information the IRS had on file. It was a paperwork headache but not a financial or legal problem since I'd been honest about my income all along.
Anyone know what the current threshold is for 1099s? I thought it changed recently from $600 to something higher?
NebulaNinja
One important thing to note: make sure you're checking your mailbox regularly through April 2025. After these kinds of corrections, the IRS sometimes sends a follow-up CP2000 notice or requests additional information. The worst thing you can do is miss a deadline because you didn't open mail promptly. These notices often have 30-day response windows, and missing them can lead to default assessments or lost appeal rights. Also, double check that the address the IRS has on file for you is current. You'd be surprised how many people move and forget to update their address with the IRS, then miss important notices.
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Andre Dupont
β’Good call - we're actually planning to move in March. What's the best way to update our address with the IRS? Is that something we should do before filing our 2024 taxes?
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NebulaNinja
β’You should definitely update your address before you move. The easiest way is to file Form 8822 (Change of Address) directly with the IRS. You can download it from IRS.gov and mail it in. While putting your new address on your 2024 return will eventually update their records, that could take months to process, and you don't want to risk missing any correspondence in the meantime. If you're moving in March, I'd recommend sending the Form 8822 about 2-3 weeks before your move. Also make sure you file a change of address with USPS so they forward any IRS mail that might still go to your old address during the transition period.
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Fatima Al-Suwaidi
This exact thing happened to my cousin! It was closer to $13k though. He spent the money right away (bad move) and then had to scramble to pay it back plus the fee. His accountant explained it was due to a duplicate processing of something on the return. The IRS computer systems are honestly ancient and these errors happen more than they should. I think they're still using code from like the 1960s for some of their systems.
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Dylan Mitchell
β’The IRS is actually running on systems from the 1960s in some departments! I worked with a government contractor who helped maintain their systems and it's SCARY how outdated some of their infrastructure is. They're still using programming languages most developers have never even heard of.
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