Does the Free File Program still limit you if you have self-employment income? I thought most of those options still made you upgrade if you have a 1099.

Some Free File partners do have restrictions on 1099 income, but not all of them. For example, TaxAct's Free File version does support 1099-NEC without upgrading, while some others might require an upgrade. The key is to use the tool on the IRS Free File site that matches you with eligible programs based on your specific situation. Just answer a few questions about your income sources and it will show you only the providers that can handle your tax situation completely free. Don't go directly to the tax company's website - always start at IRS.gov/freefile to ensure you get the actual free version.

I tried Free Fillable Forms once and it was a nightmare. No guidance, no error checking until the very end, and then it rejected my return for some obscure reason I couldn't figure out. Ended up having to start over with paid software anyway. Wouldn't recommend unless you really know what you're doing.

Thanks for sharing your actual experience! The annual administration fees are higher than I expected. Did you feel like the Keogh/qualified plan gave you any specific advantages over a Solo 401(k)? Was the extra cost and complexity worth it in your situation?

In my specific situation, it was worth it because I was able to contribute significantly more than the defined contribution limits. I was 52 when I set it up and wanted to catch up on retirement savings, so the higher contribution limits of a defined benefit plan made sense. For most S Corp owners, especially younger ones, a Solo 401(k) with profit sharing would be simpler and just as effective. The administrative costs add up, and unless you're consistently putting away large sums (typically above $60,000 annually), the complexity probably isn't justified. As a reference point, my contributions have been between $100,000-$125,000 annually, which made the admin costs reasonable in comparison.

I use Vanguard for my Solo 401(k) for my single-member LLC. Their setup process was super simple - just a few forms to fill out. They don't provide tax advice, but the actual account setup was straightforward. Their fees are really low compared to insurance companies, and they don't push annuity products which typically have high fees.

Good point! Our AGI is actually around $325,000 so we're approaching that threshold. Does that change your recommendation on whether we should include the rental losses in QBI or not?

Since you're still below the threshold (but approaching it), you still likely benefit from excluding the rental losses from QBI. At your income level, you can take the full 20% deduction on positive QBI without the wage/property limitations. If including rental losses would reduce your positive QBI from your wife's self-employment, then excluding them makes perfect sense. However, if your income rises above the threshold in future years, the calculation becomes more complex, and including some loss activities might occasionally be beneficial to stay under the phase-out limits.

I've used both TaxAct and FreeTaxUSA. TaxAct seemed to handle the QBI rental questions better and was more clear about the safe harbor requirements. It specifically asked about the 250-hour test and contemporaneous records, while FreeTaxUSA was more vague.

Yes, you can absolutely file earlier! The November date is just the deadline - you can file anytime before then. If you're getting a refund, it definitely makes sense to file as soon as you're ready.

Does anyone know if we'll get hit with an underpayment penalty if we don't make any estimated payments until November? Usually you're supposed to pay quarterly but this situation seems different.

Based on what I learned from the IRS when I called, you won't face underpayment penalties for delaying these specific estimated payments until November 16th. The disaster relief specifically waives penalties for these delayed payments. However, it's important to note that this only applies to the specific payment deadlines that fall within the relief period. Future estimated payments beyond this period would still follow the regular schedule and penalty rules.

Thanks for bringing that up - I hadn't even thought about FBAR requirements! Do you know if Australian superannuation accounts (their retirement system) count toward that $10,000 threshold? And did you end up getting back a decent amount of the withholding from your retirement distribution?

Yes, Australian superannuation accounts generally do count toward the FBAR filing threshold. The FBAR requirement applies to pretty much any financial account you have overseas, including retirement accounts, investment accounts, and bank accounts. It's based on the highest combined value during the year, so if all your foreign accounts together exceeded $10,000 at any point, you need to file it. Regarding the withholding, I did get back a substantial amount. My distribution had the standard 30% withholding plus the 10% early withdrawal penalty, but my actual tax rate was around 22%. So I got back the difference when I filed my return. The key was properly reporting the 1042-S income and the withholding on my 1040, which showed I had overpaid.

That's really good to know about the limitations for dual-status returns. I actually have a spouse who's still in the US - does that mean we definitely have to file separately?