That's good to know about the refund time limit. Do you know if filing for an extension would help with that deadline at all? And did you have to fill out any special forms to explain the guardianship situation to the Taxpayer Advocate?

Unfortunately, extensions only give you more time to file - they don't extend the three-year window for claiming refunds. That three-year clock starts on the original due date of the return regardless of extensions. For 2020 taxes (due in 2021), you're approaching that deadline, so prioritize that year first if possible. For the Taxpayer Advocate Service, you'll need to complete Form 911 (Request for Taxpayer Advocate Service Assistance), along with documentation of your guardianship/POA. Having your Form 2848 already completed helps. They're very familiar with guardianship situations and can sometimes help expedite transcript requests or provide guidance specific to your circumstances.

This is important. I made the mistake of not properly closing my dad's business when I became his guardian, and it caused all kinds of headaches years later. The state kept assessing annual fees and eventually sent it to collections because we thought just stopping operations was enough.

That's an interesting suggestion! I hadn't considered the contractor route. Do you have any issues with getting paid? Like do you have to deal with currency conversion fees or international wire transfers?

I use Wise (formerly TransferWise) for payments, and it's been great. The fees are much lower than bank wire transfers, and you get very close to the actual exchange rate. Most of my foreign clients are happy to use it since it saves them money too. You'll want to keep records of the exchange rates for tax purposes though. I track each payment in both the foreign currency and USD equivalent on the date of payment, which makes tax time much easier. Some clients pay me in USD directly, which simplifies things even further if your German company is willing to do that.

This is so true. I work for a UK company while living in California, and California doesn't fully recognize the same tax treaties as the federal government. Ended up having to pay more to California even though I was protected from double taxation at the federal level.

Thanks for pointing this out! I'm in Texas which doesn't have state income tax, so I guess that's one less thing to worry about at least!

1 That's a really good point I hadn't considered. If I amend 2021 to show the losses, would any unused losses potentially carry forward to the 2022 return? I'm trying to figure out the right sequence here.

3 Yes, exactly. Any disallowed passive losses from 2021 (amounts that exceed what you're allowed to deduct due to the income limitations) would carry forward to 2022. So first figure out your 2021 situation - how much loss you can actually claim after the Form 8582 calculations, then carry any remaining disallowed losses to 2022. Even if you can't deduct all the losses in either year due to the $150K phaseout, having them properly documented and carried forward is important because you can eventually claim them when you dispose of the property. That's why doing them in the right order matters.

10 I used TaxAct for a similar amendment last year. It was decent with Schedule E but the Form 8582 calculations were confusing. Had to basically understand the form myself to make sure it was done right. Not super user-friendly for rental property amendments.

Thanks for pointing that out about the two-year limit! I think I got the year wrong in my original post - stepdad actually passed in 2021, not 2022, so this would indeed be the final year mom could use QSS status. My brother's income is definitely over that $4,700 threshold - he works part-time and makes around $18,000. Sounds like that automatically disqualifies him as a "qualifying person" for mom's QSS status then? So she'll have to file as single?

Yes, if your brother's income is around $18,000, that unfortunately means he cannot be considered a qualifying relative for tax purposes, regardless of how much support your mom provides. The gross income test is a firm threshold. Since he can't be a qualifying person for QSS purposes, your mom will need to file as Single for her 2023 tax return. For 2024 and beyond, she'll continue filing as Single unless her circumstances change (like remarriage).

This is actually a really good point - a lot of people don't realize there's still hope for HoH status! I work at a tax prep office and see this misconception all the time. One correction though - for Head of Household, if you're trying to qualify using a relative who isn't your child, that person MUST be your dependent. So the brother still needs to meet the qualifying relative tests including the gross income test.

I actually asked about that last year, but my company said they can't do it because of how they control my schedule and work processes. Something about the IRS having specific tests for who qualifies as an independent contractor vs. employee. They also mentioned it would mean losing my benefits like health insurance and 401k matching.

That makes sense. The classification rules are pretty strict and the IRS looks at factors like behavioral control, financial control, and relationship factors. If the company controls when and how you work, provides tools/equipment, offers benefits, etc., they're probably correct that you should be classified as an employee. Be careful pushing for 1099 status just for tax deductions - if misclassified, it could create bigger headaches down the road for both you and the employer. The accountable plan route others suggested is probably your best option at this point.

This is what I did too. My company was resistant to dealing with expense reports, so they just increased my commission structure. Just make sure you do the math first - calculate what your annual mileage reimbursement would actually be (miles × IRS rate) and make sure the commission increase at least covers that amount.