Oh man, another form I need to worry about? Is Form 5471 something I can handle myself or is this definitely something I should have my accountant prepare? And are there any specific schedules within Form 5471 that relate to Subpart F income reporting?

I strongly recommend having your accountant prepare Form 5471. It's one of the most complex IRS forms with multiple schedules and detailed reporting requirements. Schedule I specifically reports Subpart F income and is where you'll need to break down those passive investment earnings. Schedule J tracks your E&P balances which affect future distributions. And don't forget Schedule P for tracking previously taxed earnings. Even experienced accountants sometimes struggle with this form, so it's definitely not something I'd suggest handling yourself, especially with the significant penalties for errors or omissions.

Does making a 962 election make sense if most of the foreign income is already NOT Subpart F (like the consulting income mentioned)? Seems like it might create more complications than benefits in that case.

Thanks for this tip! I wasn't aware of the 540NR form. Do you remember what documentation California required to prove your residency change? I have my Texas apartment lease and utility bills starting in December 2023, but I'm not sure if I need anything else.

For proving your change of residency, California typically wants to see a combination of documents. Your lease and utility bills are good starts. Also gather: your Texas driver's license (if you've gotten one), voter registration, vehicle registration if you transferred it, and bank statements showing your address change. The more documentation you have showing you've established a permanent home in Texas, the better. California can be particularly aggressive about maintaining tax residency claims, especially for higher-income individuals. Make sure all your documentation has consistent dates that align with when you claim to have moved. And keep copies of everything you submit - California's Franchise Tax Board has been known to "lose" documentation and ask for it multiple times.

Same here! Filed in January, submitted 3911 in April, and still nothing. When I finally got through to someone on the phone (took 3 attempts and about 2 hours total wait time), they just said "it's in process" and couldn't give me any timeline. The whole system feels broken.

9 Did you need a lawyer to set up your LLC? I've heard it can be expensive and complicated with annual fees. Is it really worth it for a smaller content creator account?

17 I didn't use a lawyer - I just went through my state's business filing website and did it myself. The filing fee was around $100 in my state, and yes, there are annual fees to maintain it (varies by state). Whether it's worth it depends on your situation. If you're making significant income or have privacy concerns, it can be valuable. For me, having business transactions under my LLC name rather than my personal name was important. Plus, it makes tax deductions cleaner since business expenses are clearly separated from personal ones. If you're just starting out with minimal earnings, maybe wait until your revenue justifies it.

2 Did you need to file any additional forms when you made the switch? I've heard some people say you need to do a "final" filing under your SSN before switching to the EIN, but that doesn't make sense to me since it's all just me either way.

Thanks for bringing this up! We do have our own EIN that we got when we first hired our nanny. HP has been using that for all the filings and payments. So if I understand correctly, I should still file Schedule H on our personal return, but make sure to include our EIN on it so the IRS can connect the dots with the payments we've already made?

Yes, exactly! Since you have your own EIN and the payments were made under that number, you should definitely file Schedule H with your personal return and include that same EIN on the form. This will help the IRS match up the payments you've already made through EFTPS with your personal tax return. You should also contact HP and tell them to stop filing 940/941 forms going forward, since Schedule H is the proper way to report household employment taxes. They can still calculate your nanny taxes and make payments through EFTPS using your EIN, but the formal reporting should be done through Schedule H on your personal return.

It won't necessarily trigger an audit, but it could cause confusion at the IRS that might lead to notices being sent to you. The issue is that you'd be reporting the same employment taxes in two different ways. The best approach is to contact your payroll provider immediately and have them stop filing the 940/941 forms if they've been doing so. Then file your personal return with Schedule H. For any quarters where 940/941 forms were already filed for 2024, you should make sure the Schedule H reflects those payments were already made. This is definitely a situation where getting professional tax advice specific to your situation would be worthwhile to avoid future complications.

I hadn't even thought about state taxes! Do you know if I need separate documentation for state tax purposes versus federal for the donated equipment?

Generally the same documentation works for both federal and state returns. The donation receipt from the school and your completed Form 8283 should be sufficient for both. However, states sometimes have their own forms for charitable contributions that exceed certain thresholds. Where I live, donations over $10,000 required a state-specific form. I'd recommend checking your state's tax department website or calling them directly to confirm any additional requirements.

Good point! You can also check their status yourself using the IRS Tax Exempt Organization Search tool online. Just enter the organization's name or EIN and it'll tell you if they're qualified to receive tax-deductible donations.