Wouldn't using a credit card work too? Especially if you can get one of those 0% intro offers? My tax bill is much smaller than OP's but I was thinking of going this route.

Credit cards can work for smaller amounts, but there are a few things to consider. First, most credit cards charge a processing fee (usually around 2-3%) when paying taxes. Second, those 0% intro offers typically only last 12-18 months, and $48,000 would be hard to pay off in that timeframe. If you can't pay it off before the promotional period ends, you'll get hit with much higher interest rates than what the IRS charges. For smaller tax bills, credit cards with promotional rates can definitely make sense if you have a solid plan to pay it off before the promotional period ends. Just make sure to calculate the processing fee into your total cost comparison.

You're thinking of an Offer in Compromise (OIC), which allows you to settle your tax debt for less than the full amount. However, it's not as easy as people think. The IRS only accepts an OIC if they genuinely believe they can't collect the full amount from you, either now or in the future. They'll look at your income, expenses, asset equity, and ability to pay. Most OICs get rejected because people have the means to pay through an installment agreement. If you have assets you could sell or a decent income, it's unlikely to be approved.

I appreciate the suggestion! In this case, I actually paid the hospital directly rather than gifting money to my dad, but that's good to know for future reference. Would it have made any difference tax-wise if I had sent him the money first and then he paid the hospital? Or is the end result the same either way?

The end result would be exactly the same tax-wise. Whether you pay the hospital directly or give your father the money to pay, the IRS views it the same way - as a gift to your father. Neither approach would give you a tax deduction. The only practical difference is that paying directly ensures the money is used for its intended purpose, and sometimes hospitals offer cash discounts or payment plans when working directly with them. But from a tax perspective, there's no advantage to either approach.

This sounds like tax fraud. You can't just claim personal expenses as business expenses by making up fake work. The IRS specifically looks for this kind of thing in audits.

Thanks for the tip about checking for quarterly payments! I actually did make two estimated payments last year that I almost forgot about. I'll definitely compare the forms side by side. Do you know where specifically I should look to see how each program is handling my self-employment income?

You'll want to look carefully at Schedule C (Profit or Loss From Business) on both returns. That's where your self-employment income and expenses are reported. Pay special attention to Part II where expenses are listed - sometimes one software will find more deductible expenses than another. For self-employment tax specifically, check Schedule SE (Self-Employment Tax). This is where you'll see if the program is calculating SE tax on the correct amount of income. The SE tax should only apply to your net profit from self-employment, not your W-2 wages.

I've also seen cases where one software detects certain tax credits automatically while others make you manually enter the information. Especially education credits, child tax credits, and earned income credit. Worth checking those too!

Absolutely correct! The free versions especially can miss credits if you don't know to look for them. The Earned Income Tax Credit is particularly valuable if you qualify, but the software might not automatically check eligibility unless you answer certain questions correctly. Also, different software might handle state taxes differently, which can affect your overall tax picture. Some states have specific deductions or credits that certain free software versions might miss completely.

I registered it as what they call an "individual enterprise" in Turkey, which is basically their version of a sole proprietorship. There's no separate legal entity - the business and I are the same for liability purposes. Does that change anything about how I should approach the US tax side?

That's good news! If it's truly equivalent to a US sole proprietorship with no separate legal entity status, then you're on the right track with Schedule C reporting. Just make sure you keep documentation showing the legal status in Turkey in case of any IRS questions. Just be aware that as your business grows, you might want to consider the implications of potential liability exposure since you're personally liable for the business. Many people with foreign operations eventually set up an LLC in the US that owns the foreign business operations to create some liability protection while still maintaining pass-through tax treatment.

I used TurboTax Self-Employed last year for my Canada-based consulting business and it handled the Schedule C foreign expenses fine. You just enter everything in USD after converting the amounts yourself. The software doesn't help with the currency conversion or FBAR filing though - you have to handle that separately.

Do you know if there's any way to "reset" this if you've been doing it wrong? I realized I've been missing my carryover basis for like 3 years now. Can I file amended returns or is it too late?

You can absolutely file amended returns to correct your basis tracking. For IRAs, you generally have 3 years from the original filing deadline to amend returns. So if you just realized this now, you can likely still fix the past 2-3 years. I'd strongly recommend filing Form 8606 amendments for each affected year, starting with the earliest one first, then working forward. Each amended return will affect the next year's starting basis. It's a bit of a pain, but way better than permanently losing your basis and potentially paying taxes twice on the same money down the road.

YES! Do the 8606 manually! I found that most tax software completely messes this up. I use tax software for everything else but fill out the 8606 by hand and then override the software's calculations. It's the only way to make sure your basis is tracked correctly year to year.

Thanks for the advice! That's what I was suspecting. I'll do the 8606 manually this year and make sure I'm tracking my carryover basis correctly. Seems like even the "premium" tax software packages don't handle this situation well. Appreciate the confirmation!