Thanks for sharing your experience! Did FreeTaxUSA make it easy to figure out how to divide the income between states? I'm worried I'll mess that up since some of my unemployment was while I was preparing to move but technically still in Michigan.

It really does make it pretty straightforward! When you enter your W-2 information, it asks which state the income was earned in, and when you enter your 1099-G for unemployment, it asks similar questions. For the unemployment specifically, you'll need to allocate it based on where you were living when you received it. So if you received unemployment payments while still physically living in Michigan (even if you were planning to move), those payments would be considered Michigan income. FreeTaxUSA asks for your residency dates for each state and then guides you through allocating everything correctly. Just make sure you know which unemployment payments came when, so you can properly assign them to the right state.

I disagree - paying for a CPA seems excessive for this situation. I had a similar multi-state situation and FreeTaxUSA worked fine. Just take your time and read each question carefully. Maybe have a friend who's good with taxes review it before submitting if you're worried.

What's the difference between gross income and net profit for this $400 threshold? Like if I made $2,000 in sales but spent $1,700 on supplies and expenses, would I still need to file?

The $400 threshold refers to net profit, which is your gross income minus your business expenses. In your example, if you made $2,000 in sales but had $1,700 in legitimate business expenses, your net profit would be $300. Since that's below the $400 threshold, you technically wouldn't be required to file based solely on your self-employment income. However, keep in mind there might be other reasons you'd need to file a tax return, and it's generally a good practice to file anyway so you have documentation of your business activity, especially if you plan to claim business losses.

This is super helpful. I've been on the fence about filing since I only made about $300 with my new photography business. Do you think it's worth paying for tax software or a professional just to file when I made so little?

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.

This is super important! My company messed this up when I was working between UK and US. I ended up paying into both systems for 2 years before realizing I could have been exempt from one. Getting a refund for the overpaid social security was a nightmare.

I'm guessing it's for system maintenance and updates. Most big financial systems have a daily maintenance window - banks often do similar things in the middle of the night. 11:45pm-midnight ET probably affects the fewest users across all US time zones while still being overnight for the IRS east coast operations.

That makes sense about the maintenance window. Just seems poorly timed during tax season when so many of us are burning the midnight oil trying to get things filed. They should at least put a more visible warning on the site about it!

Yes, absolutely save the payment confirmation as proof. Take a screenshot or save the PDF they email you. While the IRS system should automatically register your extension when you make that payment, having documentation is crucial if there's ever a question about whether you filed for an extension on time. I recommend saving it in multiple places (email, cloud storage, etc.) just to be safe. I've had clients who needed this proof years later during audits.

Thanks for confirming! I just did the $1 payment and saved both a screenshot and the PDF they sent. Feeling much better now knowing I have solid proof of the extension filing. I need the extra time to sort through some investment documents that still haven't arrived.

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?

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.

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.