Thanks for the recommendation about those professional organizations. Are they expensive to join? And what exactly do you mean by "limited representation rights" with the Annual Filing Season Program?

The membership fees are pretty reasonable - usually between $150-250 per year depending on which organization you choose. Many offer discounts for new members or students. The benefits far outweigh the costs when you consider the resources, forums, and continuing education they provide. The Annual Filing Season Program gives you limited rights to represent clients whose returns you've prepared in case of an audit. Without this or an EA/CPA credential, you can prepare the return but can't speak to the IRS on behalf of your client if questions come up later. Having representation rights makes you much more valuable to clients since you can help them through the entire process.

How much does tax preparer insurance typically cost? Is it worth it for someone just doing a few returns on the side?

Does this work for state taxes too? My employer didn't send state W-2 either and I'm not sure if I need a separate form for that.

For state taxes, the process varies by state, but most states will accept the federal Form 4852 as support for your state tax return as well. You generally don't need to file a separate substitute form for state purposes. When you file your state return (whether through TurboTax or another method), you'll typically just enter the same W-2 information that you used on your federal return, including the amounts you calculated for state withholding from your paystubs. Make sure to keep copies of any documentation you have (paystubs, bank deposits, etc.) that support your numbers in case the state tax authority has questions.

Yeah good luck getting through on that IRS number lol. I tried calling them 12 times about a similar issue and either got disconnected or was told the wait time was "greater than 2 hours

You're right about the challenges with IRS phone lines. That's why I usually recommend trying early morning (right when they open) on Wednesdays or Thursdays, which tends to have slightly shorter wait times based on my experience. If you're unable to get through by phone, another option is visiting a local IRS Taxpayer Assistance Center in person, but you'll need to schedule an appointment first. You can find your nearest location on the IRS website. In-person assistance can sometimes be more efficient for these types of issues, though it does require taking time out of your day to visit the office.

Do you know if before/after school programs count as childcare expenses? My kids are in elementary school but I pay for after-school care until I get off work. My tax software is giving me contradictory information about whether this qualifies.

Yes, before/after school programs definitely count as qualifying childcare expenses as long as they allow you to work or look for work. The IRS is pretty clear on this - any care provided for children under 13 that enables you to work or actively search for work qualifies. The key is that the primary purpose of the program must be childcare, not education. Most standard before/after school programs fall into this category. Summer day camps can also qualify, but overnight camps don't. Make sure you get the tax ID or SSN of the provider, as you'll need to include that on Form 2441.

Thank you! This worked for me too. When I went to the form view, I saw TurboTax had somehow entered part of my childcare expenses in the wrong field. It was counting some of my expenses as "dependent care benefits" from an employer (which I don't have). Once I zeroed out that field and put everything under the actual expenses, it calculated correctly to $600. Thanks everyone for the help! Saved me from either overpaying for the "expert" review or submitting an incorrect return.

Glad it worked for you! I've found that looking at the actual forms is always the best way to catch these errors. TurboTax and similar software try to make things "easy" by hiding the forms behind their interview questions, but sometimes that just creates confusion. For anyone else with this issue, another thing to check is that your care provider information is entered correctly. If the provider's tax ID is missing or formatted incorrectly, some tax software will reduce the credit amount without clearly explaining why.

Wait, I'm confused. Are you saying the extension doesn't extend the IRA contribution deadline? Or that it does? Sorry, your wording was a bit unclear to me.

Sorry for the confusion! The extension does NOT extend the IRA contribution deadline. Even if you file an extension giving you until October to file your tax return, you still must make any IRA contributions for the previous tax year by April 15th (the original filing deadline). The filing extension only gives you more time to complete and submit your tax forms - it doesn't extend other tax deadlines like IRA contributions, estimated tax payments, etc. That's the mistake I made thinking I had until October for my IRA contribution.

You can file a federal extension for free using Form 4868 directly on the IRS website. Don't pay TurboTax for something that's free! State extensions might be different depending on where you live though.

Thank you for highlighting this! That $25,000 penalty sounds terrifying. Do you recommend using a registered agent service that specializes in foreign-owned LLCs? And did you find any particular state to be easier to deal with than others for the ongoing compliance?

Yes, absolutely use a registered agent that specializes in foreign-owned LLCs - they'll keep you compliant with state requirements and help ensure you don't miss filings. I personally found Wyoming to be slightly easier than Delaware for ongoing compliance as a foreign owner. Wyoming has simpler annual reports and lower fees. Most importantly, work with a US accountant who specifically handles international clients. Regular CPAs often don't understand the nuances of foreign-owned LLCs and may miss critical filings. I'd recommend setting aside at least $1,500-2,000 annually for proper tax compliance services - it's much cheaper than those penalties!

This is actually a smart structure, but be careful with substance requirements. Many offshore jurisdictions now require real economic substance (office, employees, etc.) to maintain good standing. The OECD's BEPS initiatives have made pure "paper companies" increasingly problematic.