Do film tax credits count as income in the year you receive them? I'm getting a small incentive payment from my state film commission next month for a project I completed last year, and I'm not sure if that's 2024 income or if I should have somehow accounted for it in 2023.

The timing of film tax credit recognition generally depends on when you have the legal right to receive the payment. If your production was completed last year but the credit wasn't approved until this year, it's typically 2024 income. However, it also depends on your accounting method. If you're using the cash method (most small productions do), you'd report it as income when you actually receive the payment. If you're using the accrual method, you'd record it when you earned the right to receive it. Since it sounds like the state is just now processing your payment for last year's work, this would likely be 2024 income. But definitely confirm this with your accountant since tax credit treatment varies by state and situation.

That's wild, I never would have thought about credit as compensation! How do you even calculate the value of a film credit for tax purposes? Is there some kind of standard rate card for that?

That's really helpful. So for my invoices, should I format it as "My Full Name dba Business Name" and then just use my SSN on the W9 form? Or should I include both the SSN and FEIN on different parts of the form?

You should format it exactly as "Your Full Legal Name dba Business Name" on your invoices, and then on your W9, check the "Individual/sole proprietor" box, use your personal name on the "Name" line, your business name on the "Business name/disregarded entity" line, and your SSN in part I. You can include your EIN in Part II if you want, but it's cleaner to just use your SSN for everything unless you specifically need the EIN for something like business banking. This way, everything matches what the IRS has on file for you personally, which prevents these verification hiccups.

From my experience (worked in tax prep for 7 years), these kinds of mismatches don't typically trigger audits on their own. They're considered administrative issues rather than compliance problems. The IRS is looking for income reporting discrepancies, not ID formatting issues.

Thank you for bringing up these important points! I have about $35K combined in my Canadian accounts, so I'll definitely need to file the FBAR. You're right about the TFSA - that's exactly why I'm planning to close it before October. Regarding RRSPs, I do have about $80K in an RRSP. I wasn't aware of Form 8891 - does that need to be filed annually or just once?

The good news is that Form 8891 was actually eliminated in 2014! The IRS now automatically recognizes the tax deferral for RRSPs under the US-Canada tax treaty without requiring a specific form. You'll still need to report the existence of the RRSP on your FBAR and potentially on Form 8938 (Statement of Foreign Financial Assets) if you meet the filing threshold, but the income can continue to grow tax-deferred. One other consideration for your plan: make sure you've researched any state-specific requirements. California, for example, doesn't always follow federal treatment of foreign income and may have different rules regarding your Canadian accounts and investments compared to federal regulations.

This is incorrect information. Canada doesn't have an "exit tax" in the same way as the US. What Canada has is a deemed disposition rule where certain properties are treated as if they were sold at fair market value when you cease Canadian residency. However, this typically doesn't apply to cash, personal-use property, most registered plans like RRSPs, and certain real property located in Canada.

Thanks for bringing this up. I've been concerned about this potential issue. My total assets are around CAD $1.3 million, so I should be under that threshold. Most of my assets are either in my RRSP, cash, or the condo which I'm planning to sell before becoming a non-resident. Would there be any other assets I should be concerned about for the deemed disposition rules?

3 Is there any minimum amount for self-employment? Like if someone paid me $50 to mow their lawn once, do I still need to report that? It seems excessive to file all these extra forms for tiny amounts.

22 The technical answer is that if your net earnings from self-employment are $400 or more, you're required to report the income and pay self-employment tax. Below that threshold, you still technically need to report the income on your tax return, but you wouldn't have to pay self-employment tax or file Schedule SE. For very small amounts like $50 from a one-time lawn mowing job, the practical reality is that it's unlikely to create issues if not reported. However, the letter of the law says all income should be reported regardless of amount. As amounts get larger (like the $3,800 mentioned in the original post), the importance of proper reporting increases significantly both for compliance reasons and because the IRS is more likely to notice larger unreported amounts.

2 Which tax software do you think handles this situation best? I'm in a similar boat with just one small freelance project this year.

Do you find any difference in quality between your rural vs city accountant? I'm wondering if paying more actually gets you better service or tax savings?

Honestly, my rural accountant is more attentive and responsive - probably because she has fewer clients overall. The Chicago firm has more specialized expertise in certain areas (particularly for e-commerce tax issues), but for day-to-day service and general tax matters, the rural accountant provides better value. The big difference is that the Chicago firm has more specialists under one roof, so if I have a very specific tax situation, they can usually handle it in-house. With my rural accountant, she occasionally needs to bring in outside expertise for complex situations. But for standard business tax planning and preparation, I haven't found that paying more necessarily results in better service or outcomes.

How do you find a good EA? Is there a directory or certification board? I've only ever used CPAs and H&R Block type places.

You can find qualified EAs through the National Association of Enrolled Agents website (NAEA.org) - they have a directory searchable by location and specialization. I found mine through a business owner networking group, which was great because I got to hear about direct experiences from other small business owners. When interviewing potential EAs, ask about their experience with your specific industry and business structure. A good EA should be able to discuss relevant deductions and planning strategies in your initial consultation. Also check if they offer audit representation (most do, it's a core part of their expertise). The right EA can provide the same level of tax expertise as a CPA, often with more specialized tax knowledge and lower fees since they focus specifically on taxation rather than broader accounting services.