Have you ever been audited though? I'm worried that ignoring anything on the K1 could trigger something later. Just because you haven't had an issue yet doesn't mean the IRS won't come back years later.

No, I've never been audited for this issue. You're not really "ignoring" anything on the K-1 though - you're using all the information that's relevant to your individual tax situation. The K3 just provides additional detail for certain foreign transactions that most domestic investors don't need to report. The IRS generally focuses audit resources on areas where significant tax might be underreported. For most domestic investors in MLPs, waiting for a K3 that won't change your tax liability isn't likely to be a high audit priority. I've been filing this way for over 7 years with multiple MLPs and haven't received so much as a notice.

TurboTax is super annoying with MLP K-1s. I had the same warning last year and called their support. They confirmed that if you're a US-only investor with no foreign tax credit claims, you can override that warning and proceed with filing. There's actually a checkbox somewhere in the foreign income section where you can indicate you have no foreign filing requirements.

January is almost always better because you defer the taxes for a whole year. I always push mine to January.

Do we know for sure they're expiring? I thought there was talk about making some of the changes permanent.

As the law currently stands, most of the individual tax provisions will expire after 2025. Congress would need to pass new legislation to extend them. Some of the business provisions were made permanent, but the personal income tax changes were temporary. There's always talk about extending popular tax cuts, but that requires congressional action. Given how difficult it is to get anything passed these days, I'm planning for the expiration while hoping for an extension. Best to be prepared either way.

TurboTax won't let you model future years accurately. I'm a CPA and we use professional software that can project scenarios with different tax laws. Your best bet is to consult with a tax professional for retirement planning that factors in potential law changes.

Thanks for mentioning this! I've heard of the FIRE system but wasn't sure if it applied to 1098-F forms specifically. How long did the approval process take for you? We're working on a pretty tight timeline with our new reporting requirements.

The approval process took about 3 weeks for us, but that was during a slower period. If you're approaching year-end or tax season, it might take longer. I'd recommend submitting the Form 4419 application as soon as possible. One thing to note is that you'll need to create files in a very specific format for the FIRE system. The IRS has detailed specifications for each information return type. We ended up using a programmer to help create the proper file structure for our 1098-F submissions.

Totally agree with this. We had to go back and review hundreds of cases to determine which ones met the reporting threshold. The IRS guidance is a bit vague. Does anyone have a good checklist or process for determining what needs to be reported on 1098-F?

That's a really good point about state taxes that I hadn't considered. I am indeed in Georgia, so I'll need to look into how they handle FTCs. Do you know if there's a substantial difference in how they calculate it compared to federal? And regarding the day counting - I've been tracking pretty carefully since I arrived in May, but are there specific thresholds I should be aware of under the treaty?

Georgia's FTC is more limited than the federal credit. They only allow credit for taxes paid to foreign countries on income that's also taxed by Georgia. The calculation is based on the ratio of your foreign income taxed by Georgia to your total Georgia taxable income. So if some of your Canadian income isn't subject to Georgia tax, you can't claim FTC for taxes paid on that portion. For the treaty's substantial presence test exceptions, there's the "closer connection" exception that might apply. If you maintain more significant ties to Canada (permanent home, family, economic connections, etc.) and are present in the US for fewer than 183 days in the calendar year, you might be able to claim that your tax home is still Canada despite meeting the substantial presence test. You'd need to file Form 8840 to claim this exception.

This is super important! My company messed this up when I was working between UK and US. I ended up paying into both systems for 2 years before realizing I could have been exempt from one. Getting a refund for the overpaid social security was a nightmare.