That's a good point, but isn't the higher standard deduction also part of TCJA and set to expire? So wouldn't the standard deduction also go back down in 2026, making itemizing more likely again?

You're absolutely right - I should have mentioned that. The increased standard deduction is indeed part of TCJA and scheduled to expire after 2025. Pre-TCJA, the standard deduction was much lower (around $12,700 for married filing jointly in 2017, adjusted for inflation). If no legislation is passed, the standard deduction would indeed drop significantly in 2026, which would make itemizing deductions beneficial for many more taxpayers. So the combination of lower standard deduction, unlimited SALT deductions, and higher mortgage interest cap could create a substantial change in tax strategy for homeowners in high-tax states.

The $750k mortgage interest deduction limit is per return, not per person. So on a joint return, your total limit is $750k regardless of how many borrowers are on the mortgage. If you file separately, each spouse gets a $375k limit. This is also true for the pre-TCJA $1M limit that would return after 2025 if no new legislation passes. On a joint return it would be $1M total, or $500k each if filing separately.

Did you do it yourself or use a tax professional? I'm trying to figure out if I can handle an amendment myself or if I need to pay someone.

I did it myself using the same tax software I originally filed with. Most of the major tax platforms have an amendment feature that helps walk you through the process. It pre-fills a lot of the information from your original return, so you only need to focus on what's changing. I found it pretty straightforward, especially since I was just adding business expenses to my Schedule C. If your amendment is more complicated (like changing filing status or something more substantial), then getting professional help might make sense. But for adding missed deductions, you can probably handle it yourself.

File them separately! I made the mistake of trying to deal with everything at once and it created a huge mess. Do your 2023 taxes normally, then handle the 2022 amendment after. Keeps everything cleaner and prevents confusion.

We did file within the 30-day window! Our lawyers were really strict about that deadline. We didn't have any external investors at the exact time we incorporated and issued the initial shares. We did have some friends/family invest about 3 months later at a slightly higher valuation though. Would the IRS look at that later valuation and try to apply it retroactively to our founder share purchases?

Good that you filed within the 30-day window - that's a common mistake that can't be fixed later. The IRS generally wouldn't apply a later valuation retroactively if there was a legitimate basis for the initial valuation. At formation, with no product, revenue, or investment, valuing common shares at just above par value is typically reasonable. The key is whether there were any substantive negotiations or commitments from investors already in place when you incorporated, which might suggest a higher valuation already existed. The 3-month gap before your friends/family round provides decent separation, and startups often see legitimate value creation in those early months that justifies a higher valuation. Just make sure you have documentation of the company's state at incorporation versus 3 months later to show real progress that warranted the increase.

I've seen it happen. Friend was audited last year and the IRS specifically questioned the valuation used for their founder shares. They had purchased at $.001 but had term sheets from investors at $.08 in progress when they did it. IRS argued they'd undervalued by millions and owed taxes on the difference. Huge mess.

Yikes, I'm so sorry you went through that! Thanks for the warning - this is exactly the kind of situation I'm trying to avoid. I'm definitely going to verify active licensure before moving forward. Did you end up finding a legitimate CPA after that experience?

Yes, we eventually found a great CPA through my coworker who's been using him for years. The difference was night and day - our new CPA provided all his credentials upfront without being asked and even showed us his professional liability insurance certificate. One tip: when we interviewed him, he asked US detailed questions about our situation rather than making generic promises about maximizing refunds. That level of detailed interest was a good sign he actually knew what he was doing. He also explained exactly why the previous deductions were improper and helped us file amendments. Good luck with your search!

This is a really good point. Government websites are notoriously outdated sometimes. I'd definitely ask them about it - their response will tell you a lot about how they handle client concerns.

Wouldn't selling trigger that punitive tax rate the first poster mentioned though? Wouldn't that be worse than just dealing with the annual reporting?

Yes, selling will trigger the tax event at potentially the highest rate plus interest charges if you're using the default PFIC method. However, it's a one-time pain versus ongoing compliance costs and headaches. If you can make a QEF election for the current year before selling, that might reduce the tax impact somewhat. Or if you've only held them for a short time, the interest charges might not be too severe. I did the math and realized that even with the higher tax rate on selling, the amount I'd save in accounting fees over the next decade made it worthwhile to just take the hit and simplify my life.

I use MTM for my Australian ETFs. You can only make the election on a timely filed return for the year, and once you make it, you're stuck with it. The upside is you report gains/losses annually as ordinary income (no special PFIC tax rates). The downside is you can't claim losses beyond your gains from other MTM PFICs. It's way less complicated than the default method though.