Thanks for this info! Did you end up filing Form 3520 for your TFSA, or did you go with just FBAR and 8938? I'm trying to understand what the majority of people in this situation are doing.

I initially filed Form 3520 for my TFSA for two years, following advice from my first cross-border tax specialist. It was a paperwork headache and added considerable complexity to my returns. After consulting with another tax professional who specializes specifically in US-Canada issues, I switched to reporting my TFSA on FBAR and Form 8938 only, with a note explaining the account's status. This professional provided me with several IRS memorandums and case examples supporting the position that most standard TFSAs don't meet the technical definition of foreign trusts requiring 3520 filing.

This is so frustrating! So even if I properly report the TFSA now, any interest, dividends, or capital gains inside it are still taxable for US purposes? That completely defeats the whole purpose of having a TFSA.

I've never heard of "true-up" contributions. Would that explain why ADP insists the W-2 box 12 amount is "meaningless" compared to when contributions actually hit my account?

Yes, that might explain their strange language about the W-2 being "meaningless." With true-up contributions, the employer makes additional deposits to your 401(k) to ensure you receive the full match you're entitled to, even if your own contributions were front-loaded during the year. These adjustments typically happen in January for the previous year, which aligns with what they told you about January 2024 crediting. However, for contribution limit purposes, the IRS still looks at the tax year shown on your W-2. I'd suggest specifically asking ADP if your final "contribution" was actually a true-up adjustment rather than a regular paycheck deduction.

The limit for 2023 was $22,500, but don't forget they might have both traditional and Roth 401k contributions combined in that box, or maybe there's employer matching included? Not all money in box 12 counts toward the employee limit.

Thanks for bringing this up. I did pay the Delaware annual franchise tax for 2023, but then stopped when I abandoned the LLC. Should I have formally dissolved it with the state? As for New Mexico, I've registered for gross receipts tax but didn't think about how using the same EIN might create confusion. Would filing state tax returns in NM using the same EIN potentially trigger Delaware to think I'm still active there?

Yes, you should have formally dissolved your Delaware LLC by filing a Certificate of Cancellation with the Delaware Division of Corporations. Without formal dissolution, Delaware will continue to consider your entity active and may assess annual franchise taxes and penalties for failure to file. For New Mexico, using the same EIN shouldn't automatically trigger issues with Delaware, as they're separate state systems. However, for clarity in your records and to prevent future confusion, I strongly recommend formally dissolving the Delaware entity. It typically costs around $200 to file the dissolution paperwork, which is much cheaper than continued annual fees or potential penalties. The good news is that most states allow late dissolutions, so you can still properly close the Delaware LLC even though it's been a while since you abandoned it. This clean break will help you avoid any state tax complications while you focus on resolving the federal filing requirements we discussed earlier.

Is there a way to check if the IRS has already assessed penalties for the unfiled 5472 forms? I'm worried they might have been sending notices to my old address.

I've used both! TaxSlayer has a better interface imo and I never had the AGI verification issue with them. Their deluxe version is like $40 and includes one state return which is way cheaper than TurboTax or H&R Block. FreeTaxUSA is cheaper but TaxSlayer's extra guidance was worth it for me.

Thanks for sharing your experience! The interface quality is important to me, and $40 including a state return sounds reasonable. Did you find TaxSlayer's guidance helpful for more complex tax situations? I have some investment income and a side business I need to report.

Interesting to hear you've had such a good experience! Do you think there might be something specific about certain tax situations that causes the AGI verification issues for some people? Also, have you ever had to amend a return with them, and if so, how was that process?

I think the AGI verification issues might be related to specific scenarios like amended returns or returns with unusual adjustments. Since my tax situation is complex but consistent year-to-year, that might be why I haven't had problems. I did have to amend a return once due to a late-arriving K-1 form. The amendment process with FreeTaxUSA was actually pretty straightforward. They walk you through which forms need to be updated, generate the 1040-X, and provide clear instructions for mailing the paper amendment. They don't offer e-filing for amendments, but that's true for most tax software since the IRS only recently started accepting e-filed amendments.

Thanks for the suggestion! I don't think I qualify for EITC since I don't have kids and my income is a bit too high for a single person. I am taking the standard deduction though. It sounds like my real issue is the self-employment taxes on that gig income that I didn't plan for. Lesson learned for next year - I'll be setting aside money each month from my gig work.

Completely agree! TurboTax kept trying to upsell me to their $120 version to "maximize self-employment deductions." FreeTaxUSA found all the same stuff for like $15. And their interface actually explains things better too.

That's good to know! I felt like I was taking crazy pills when I switched and suddenly found all these deductions TurboTax never mentioned. Their basic version is practically useless for anyone with slightly complicated taxes. FreeTaxUSA actually walks you through the self-employment section with helpful explanations instead of dangling premium features in front of you constantly.