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One thing I haven't seen mentioned yet - make sure you're also filing an FBAR (FinCEN Form 114) if the total of all your foreign accounts was over $10,000 at any point during the year! That's separate from your tax return and has a different deadline.
This is so important! I got hit with a huge penalty for not filing FBAR even though I reported all my income correctly. The FBAR deadline is actually April 15 now, same as taxes, but with an automatic extension to October.
Just a quick note about physical presence test - if you're trying to qualify for the Foreign Earned Income Exclusion, you need to be physically present in foreign countries for at least 330 days in a 12-month period. Some digital nomads mess this up by spending too much time back in the US. Keep good records of your entry/exit dates!
One important thing nobody's mentioned yet - make sure you're also claiming Foreign Tax Credit (Form 1116) on your US taxes for any Japanese tax you've already paid! Even after you get the Form 6166 certificate and reduce future withholding, you should get credit for past payments. Also check if your specific work falls under "independent personal services" in Article 14 of the treaty rather than business profits in Article 7. The distinction can matter depending on how long you physically worked in Japan (if at all) and how your business is structured.
Thanks for mentioning the Foreign Tax Credit! I actually haven't been claiming that - do you know if I can amend previous years' returns to claim it? I've been paying both full US taxes AND the Japanese withholding for about 3 years now.
Yes, you absolutely can amend your previous returns to claim the Foreign Tax Credit! You generally have 3 years from the original filing deadline to file an amended return (Form 1040-X) along with Form 1116 for the Foreign Tax Credit. For each of those past 3 years, you'll need documentation showing the Japanese taxes withheld. The credit can significantly reduce your US tax liability since it's a dollar-for-dollar reduction (not just a deduction). Many people in your situation end up getting substantial refunds. Just be aware that the Form 1116 is somewhat complex, so using tax software or a professional familiar with international taxation might be helpful for the amendments.
Quick note about timing - if you're planning to apply for Form 8802, do it WELL before you need it. I applied in January thinking I'd get the certificate by March at the latest. It's now June and I'm still waiting! The IRS is seriously backlogged with these. If you need it urgently, include a cover letter explaining the financial impact and potential loss, and mark the envelope as "URGENT" though there's no guarantee that helps.
You might want to try contacting the Taxpayer Advocate Service if you've been waiting that long. They can sometimes help with unreasonable delays. Worth a shot at least!
Another thing to try - check if your W-2 is available on the IRS website. You can create an account at irs.gov and sometimes they have W-2 info reported by employers even if they didn't send it to you. I found mine there last year when my employer claimed they "mailed it" but it never showed up.
Is this the "Get Transcript" feature? I looked at that but got confused about which option to select.
Yes, it's through the Get Transcript service. You'll need to select "Wage and Income Transcript" when prompted for the type of transcript. This will show information from forms submitted to the IRS including W-2s and 1099s. Creating an account can be a bit of a process since they've increased security measures. You'll need your ID, social security number, and some financial account numbers for verification. Once you're in, you can access transcripts for the current tax year and previous years.
You should definitely report them to your state's labor department too! It's illegal for them to withhold your W-2. My cousin's employer did this and got fined pretty heavily when the state found out. They were doing shady stuff with the payroll taxes.
Just to add another perspective - the 'c' markings sometimes appear on tax transcripts as well, not just on physical documents. They typically show up in the IRS internal systems as verification codes. If you order your tax transcript online through the IRS website, you might see these marks in the digital version too. If you're updating previous returns for 2025 filing season, make sure you're using Form 1040-X for amendments and reference your original tax year. Those 'c' marks won't affect your amendment process at all.
Do we need to request transcripts before filing amendments? I assumed I just need my original return copy. Also, how far back can you amend returns? I might have similar issues with my 2021 taxes.
You don't absolutely need transcripts before filing amendments, but they're extremely helpful to ensure you have the exact information the IRS has on file. Having your own copy of your return is good, but the transcript shows how the IRS actually processed it, which sometimes differs from what you submitted. For amended returns, you generally have 3 years from the original filing date or 2 years from when you paid the tax, whichever is later. So for 2021 taxes (typically filed in 2022), you should still be within the amendment window for the 2025 filing season. I'd recommend grabbing the transcript though - it makes the amendment process much smoother when you can see the IRS's internal codes and processing marks.
I just wanted to share that my tax preparer always marks items with 'c' when she's checked them during preparation - it's a common notation system among tax professionals too, not just the IRS. Might be why you're seeing those marks. Is it possible the document is from your preparer and not directly from the IRS?
That's a good point about tax preparers! My accountant uses checkmarks and little symbols all over my returns before submitting. I always thought it looked so messy but I guess that's their system.
Thanks for bringing this up! I double-checked, and you're right - the documents are actually from my tax preparer's office, not directly from the IRS. They sent me copies of what they submitted. That makes so much more sense why there are these little marks all over them. I feel kinda silly now for worrying, but at least I understand what I'm looking at. Guess my preparer was just marking things they verified before submitting. Learning something new about taxes every day!
Ruby Blake
Just to add another data point - I paid my taxes with a credit card last year to hit my Amex Platinum bonus. My accountant marked "will not submit payment with return" and then I went to IRS.gov and used their approved processor links. I used Pay1040.com which had the lowest fee at the time (1.87%). The whole process took maybe 5 minutes. Just had to enter my SSN, tax year, payment amount, and card info. Got an email confirmation right away. No issues at all and my tax transcript later showed the payment posted correctly. The bonus points were definitely worth the processing fee in my case.
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Micah Franklin
ā¢Did you have to tell the IRS anything about using the credit card payment processor, or do they automatically match the payment to your tax account?
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Ruby Blake
ā¢They automatically match the payment to your tax account based on the SSN and tax year you enter when making the payment. You don't need to notify the IRS separately or reference anything specific from your return. The payment processor sends all the necessary details to the IRS with your payment. When I checked my tax transcript a few weeks later, it showed the payment properly applied to my account. The whole system is designed to work without any additional steps needed from you.
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Ella Harper
Omg I almost made a huge mistake with this exact situation last year! My tax guy told me to write my credit card number ON THE TAX FORM!!! I was like hell no and did some research. Found out the IRS NEVER wants your actual card number on tax forms!! That would be a security nightmare. What you do is file your taxes normally, then go to IRS.gov, click the "Pay" button, and it gives you links to the official payment processors. I used ACI Payments Inc and it was super easy. Yes the fees kinda suck (I paid like $90 on a $4500 tax bill) but I got enough points for a free flight to Vegas so totally worth it lol
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PrinceJoe
ā¢This is helpful! How long did it take for the payment to show up in your IRS account after you paid through the processor?
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