That's incredibly risky advice. The IRS has up to 6 years to audit returns with substantial underreporting and potentially unlimited time if they consider it fraudulent. Just because nothing happened yet doesn't mean you're in the clear.

You're right - I wasn't trying to suggest OP should ignore the issue. I was just sharing what happened in my specific case. The statute of limitations is definitely 3 years for most situations, but as you said, it can be longer for substantial underreporting. In my case, the amount was small enough that it wouldn't have triggered the substantial underreporting threshold (which is typically 25% of gross income).

Thank you so much for mentioning this! I hadn't even thought about the state implications. Would this apply even though I'm filing a 1040-NR for federal? Do non-residents generally need to file amended state returns too?

This is a really important point. I've seen families torn apart over this exact issue. Sometimes the parent is claiming the child for benefits even though grandparents are doing the caregiving. Worth having an honest conversation before tax time.

Would those services be cost-effective for a small business with just occasional international sales? I'm concerned about spending more on compliance than the actual value of the sales.

For very occasional international sales, most of these services might not be cost-effective since they typically charge monthly subscription fees designed for businesses with regular international transactions. For your situation with just one small transaction, you might want to look at per-country filing services that charge one-time fees, or consult with an accountant who specializes in international tax to weigh the cost of compliance against the risk of non-compliance. Some businesses choose to hold off on formal registration until they reach a higher volume of sales in a particular country, but this approach does carry some compliance risk.

I used them last year for our company. Pretty decent service and they do handle everything in English. Their customer service is hit or miss though - sometimes took days to get a response. But they did get everything filed correctly and on time.

That's a really good point! Her daughter is 6 years old and lived with her the entire year (both in the apartment and at the grandparents' house), so she definitely meets the age and residency tests. And my cousin provided all her support. So we're good on the qualifying dependent part. I was just hung up on the "maintaining a home" test since she only had her own place for part of the year.

Sounds like you're in good shape then! Just remember that when determining if she paid more than half the cost of maintaining the home, you'll be looking at the total costs for those 7 months only, not the whole year. Since she paid all the expenses for that period, she clearly meets the "more than half" test for maintaining a home. One other tip - make sure she keeps good records of her rent payments, utility bills, and other household expenses from those 7 months. If she gets audited, the IRS might ask for proof that she maintained the home.

I used to work for a tax prep company, and this is correct. When the IRS says "paid more than half the cost of keeping up a home for the year," they're referring to the home(s) where the taxpayer and qualifying person lived during the year. If your cousin paid all the costs for the 7 months they lived in the apartment, she meets this test.

We actually did buy our first home in August! But the mortgage interest wasn't that much since we only had it for part of the year. We donated some clothes and household items to Goodwill, but I didn't keep receipts because I didn't think it would matter. No student loans currently. The main change was definitely getting married and my wife losing her job in November. Would the job loss affect our 2024 taxes even though it happened in November? We were thinking that would mostly impact next year's taxes.

Buying a home definitely has tax implications! Even with only a partial year of mortgage interest, that should be a deduction that helps reduce your tax burden. Make sure that's included on your Schedule A if you're itemizing deductions instead of taking the standard deduction. The job loss in November wouldn't have a huge impact on 2024 taxes, but it does affect your overall annual income which could potentially put you in a different tax bracket. More importantly, if your wife received unemployment benefits after the job loss, those are taxable income and could be part of why you're owing taxes if the proper withholding wasn't taken out.

This is a really good point! I'm in Minnesota and got absolutely hammered with the marriage tax penalty. Meanwhile my sister in Texas (no state income tax) actually saved money by getting married.