You can actually submit the ITIN applications (Form W-7) along with your tax return. That's what we did last year. BUT since ITIN processing takes time (up to 11 weeks or more), your refund will be delayed until the ITINs are processed. If you're concerned about meeting the deadline, file your return with the W-7 forms by the filing deadline. You don't need to file an extension unless you can't complete your actual tax return by then.

That's super helpful! I was worried we'd miss out on filing jointly this year because of the ITIN timing. Good to know we can submit everything together by the deadline.

That's really helpful! I had no idea about Form 5471 or the GILTI tax issues. My LLC is basically dormant now - I just kept it because I thought I might move back to Canada someday. But sounds like the tax headaches aren't worth it. Is there anything specific I need to know about the dissolution process from a tax perspective? Will I face any kind of "exit tax" when dissolving it?

When dissolving a Canadian LLC, you'll need to make sure all its assets are distributed, which can trigger capital gains in Canada. The corporation will need to file a final tax return in Canada showing the disposition of all assets. From the US side, you'll need to report the liquidation on your personal tax return. Any assets you receive from the corporation above your basis could be taxable in the US. You'll also need to file a final Form 5471 indicating the dissolution. If the LLC has significant retained earnings or appreciated assets, it gets more complicated. In that case, definitely get professional help to structure the dissolution in the most tax-efficient way possible. But for a relatively simple or dormant LLC, the process is straightforward and the long-term tax savings are substantial.

The US tax system is absolutely ridiculous with these foreign account reporting requirements. My friend got hit with a $10k penalty for not filing an FBAR on a Canadian account with barely $12k in it. Meanwhile billionaires are using sophisticated tax shelters with barely any consequences.

It is frustrating, but the penalties are even worse if you ignore the requirements. The best approach is to get compliant as quickly as possible. The Streamlined procedures are still available for those who weren't aware of their filing obligations. The good news is that once you're in the system and filing regularly, it becomes routine. I now just keep a spreadsheet with my maximum account balances throughout the year and filing the FBAR takes about 20 minutes online. Form 8938 is more complex but most tax software handles it fairly well.

Oh crap, I didn't even think about state requirements! I'm in California - does anyone know if I need to file something separate for my LLC at the state level?

California requires an automatic 6-month extension for filing your state personal income tax return, so you don't need to file a separate extension form for that. However, you still need to pay any estimated tax you owe by the original due date. For your LLC specifically, California requires an annual LLC tax of $800, which is due by the 15th day of the 4th month of your taxable year (April 15 for calendar-year taxpayers). This payment isn't extended by your personal extension, so make sure you've paid that already if it applies to you.

I've been using QuickBooks Self-Employed for my single-member LLC and it's been great for tracking everything. It even has a tax estimation feature that helps you set aside the right amount each quarter.

7 I tried using that estimator but got confused halfway through. It asked for projected deductions and I had no idea what to put. Do you just guess? Or is there a way to figure out what deductions they'll have for this year?

11 For the deductions section, you can use last year's deductions as a starting point if your situation hasn't changed much. If your parents take the standard deduction (which most people do now with the higher amounts), you can just select that option without itemizing. If they do itemize, have them look at Schedule A from last year's return and use those figures as estimates, adjusting for any known changes (like if they paid off their mortgage or expect higher medical expenses this year).

16 Wait, so even if they pay everything they owe by the tax deadline, they can still get penalties if they didn't pay enough during the year?? That seems really unfair!

Good idea about checking emails! I just did a search through my inbox for "tax return" and "1040" and found an email from April 2022 that has my 2021 return attached, but nothing for 2022 or 2023. I'm going to try reaching out to coworkers who might know what software our tax preparer used.

Glad that helped with at least one year! Another thing to try is looking at your bank statements from when you paid to have your taxes done. The charge might list the name of the tax software, not just the preparer's business name. Also, if you received tax refunds for those years, check your bank deposits around tax time - the deposit details sometimes include information about which service processed your return.

This happened to me too! Found our returns in my husband's email (he had forwarded them to himself from his accountant and then completely forgot). Always check with your spouse first before going through the hassle of IRS requests.

My wife and I have been searching everywhere! We looked through all our devices, cloud storage, and email accounts. I even found some older tax documents from 2020, but nothing for 2022 or 2023. I'm starting to think our tax preparer never actually gave us copies, which is frustrating. I've called our mortgage lender, and they confirmed they need the actual 1040 forms, not just transcripts. They need to verify some specific deductions that apparently don't show up on the transcript. Going to try the IRS Form 4506 route and see if I can get expedited processing.