How detailed did you get in your non-willful statement? I'm worried about saying too much vs too little. Did you mention specific years or accounts, or keep it more general?

I was pretty specific but concise - about one page single-spaced. I mentioned when I opened each account, why I opened it (moved abroad for work in 2018, needed local banking), and why I didn't know about the reporting requirements (no international tax experience, used regular tax software that never prompted me about foreign accounts). I avoided making excuses but clearly explained my background and why the oversight was genuine. I included specific moments like when I first learned about FBARs and my immediate actions afterward. The IRS seems to appreciate this level of detail as it supports your case for non-willful conduct.

I used TaxAct for my amended returns and then the FinCEN online system for the FBARs. It was doable but required a lot of research. The regular tax software doesn't have great guidance for the Streamlined procedures specifically. If your situation is complex (multiple accounts, business interests, investments), I'd probably get professional help. For basic bank accounts, you might be able to DIY.

Are there any special considerations for the 5472 when all the company's income is from digital products? My Delaware corp sells software but I'm the only employee and I live in Germany.

For digital products, the 5472 requirements still apply, but you need to be especially careful about documenting any IP rights or licensing between you and the corporation. Since you're in Germany and the only employee, all transactions between you and the company need proper documentation and arm's length pricing. Make sure you're tracking any payments for services you provide to the corporation, any IP you're licensing to it, and any other transactions that cross borders. Digital businesses have a tendency to blur these lines, which can create issues with the 5472. Consider having transfer pricing documentation prepared, even for a small operation.

I tried using TurboTax Business for my foreign-owned corp last year and it was a disaster. It didn't handle the 5472 properly and didn't clearly indicate which mailing address to use. Ended up having to redo everything with a CPA who specializes in international taxation.

Thanks for sharing your experience. That's really disappointing to hear about TurboTax Business. I was hoping to save some money by doing it myself, but sounds like I might need to look for a specialist CPA after all. Did you find someone reasonable who understands these foreign-ownership situations?

How did you come up with that $60-75 figure? Is there a simple calculation to determine the right extra withholding amount?

It's a rough estimate based on the tax brackets. When you have a second job that makes about 25-30% of your main job's income (like the $17k vs $58k in this case), you're typically looking at withholding an extra 22% of the second job's income (since that income is "stacked" on top of your main income and falls into your highest marginal tax bracket). $17,000 × 22% = $3,740 extra tax needed per year. Divide by number of pay periods (usually 26 if biweekly) = about $144 per paycheck. But you can withhold less if your second job is already withholding something, which is why I suggested $60-75 as a starting point. The IRS Withholding Calculator will give you a more precise figure based on your specific situation.

You're correct that it all gets reconciled when you file - you're not evading taxes by having multiple jobs. The issue is just that you might end up with a large tax bill instead of getting a refund. If the amount you owe is large enough (generally over $1,000), you might also face underpayment penalties from the IRS.

Thanks for bringing that up. Do you know if there's an easy way to tell if it's a simple or complex trust? The paperwork I have doesn't specifically say either way.

You can usually determine if it's a simple or complex trust by looking at the trust document itself. A simple trust requires that all income be distributed annually to beneficiaries, doesn't allow for charitable contributions, and doesn't distribute principal. A complex trust has more flexibility - it can accumulate income, make charitable contributions, or distribute principal. The K-1 form might also give you clues. If you see distributions of corpus (principal) or if some income is being retained in the trust rather than distributed, it's likely a complex trust. You could also ask the trustee directly - they should definitely know how the trust is structured. This matters because complex trusts might distribute both income and principal, and principal distributions generally aren't taxable to the beneficiary.

I've used H&R Block's software for my son's trust income and found it worked pretty well. It has a specific section for K-1 entries and walks you through each line item. Much more straightforward than trying to figure it out manually. TaxSlayer also has decent K-1 support for a lower price if you're looking for alternatives.

Thanks for this! Do you know if I need to do anything special to prove my income since I won't have a 1099? Should I download all my transaction history from the app as proof?

Yes, definitely download and save all your transaction history from the payment app. I recommend exporting it to a spreadsheet if that option is available, and categorizing each transaction (income vs. deposits that will be returned, etc). For tax filing purposes, you don't need to submit proof of income with your return, but you absolutely should keep those records for at least 3 years in case of an audit. Also make sure you're tracking all your business expenses with receipts - things like needles, jewelry, gloves, cleaning supplies, and even a percentage of your phone bill if you use it to schedule clients. Good record-keeping can save you a lot in taxes through legitimate business deductions.

I used TurboTax last year for my dog walking business which also uses payment apps. It worked pretty well - there's a self-employment section that walks you through entering income and expenses, even without a 1099. Just make sure you get the Self-Employed version, not the basic one.