Thanks for the specific advice. Do you think having a notarized statement from my parents (who live with us and helped care for my daughter while spouse was traveling) would be helpful to include with the cover letter?

Yes, a notarized statement from your parents would be very helpful since they're third-party witnesses to your child's living situation. The IRS values documentation from people other than the parents involved in the dispute. Having your parents include specific dates they helped care for your daughter while living in your home would add credibility to your claim. Just make sure they're precise about timeframes and their statement aligns with your overall documentation. This kind of supporting evidence can really strengthen your case with the IRS.

That's not what Form 8379 is for though? Injured Spouse is when you file jointly and want to protect your refund from your spouse's debts. OP is filing separately, so this wouldn't apply. I think you're thinking of something else.

Can you share any other examples you use? I have a teen who's starting their first job and I want to teach them right from the start.

I use a tax bucket analogy with actual buckets in class. Each bucket represents a tax bracket with its rate written on it. We pour "income water" into the first bucket until it's full, then overflow into the next bucket with a higher rate, and so on. It's very visual and helps them see that only the dollars in each specific bucket get taxed at that rate. For a teen with their first job, I'd focus on explaining the W-4 form and how to calculate their likely tax burden based on their expected annual income. Also explain FICA taxes (Social Security and Medicare), which are flat taxes, versus income tax which is progressive. Most teens are surprised to learn they might not owe any federal income tax if they make under the standard deduction amount, but they'll still see FICA taxes taken out.

You're not alone! I refused a raise for the same reason when I was younger. Such a mistake. I wonder how many people are making career decisions based on tax misconceptions?

That's actually really smart paying off the CC first. I should probably do the same but I've been eyeing a new gaming laptop for months lol. Thanks for the tip about the app - just downloaded it! Any idea how long it usually takes between "sent" status and the money actually showing up in your account?

For direct deposit, it's usually super quick after it shows "sent" - I got mine the very next day. Some banks might take 1-2 business days depending on how they process incoming transfers. If you got a paper check, it'll take about a week after the "sent" status appears before it arrives in your mailbox. And seriously, pay off that credit card first! The interest you save will help you buy an even better gaming laptop in a few months.

Same experience here! I think they're just understaffed and the tracking system doesn't get updated in real-time. Mine was "processing" forever and then suddenly I just got the deposit with no warning. First purchase: new tires for my car that I've been putting off for way too long!

Wait, seriously? So even with taking the standard deduction, I'd still owe over $4,000 in taxes on my $28,000 profit? Is there any way to reduce this self-employment tax?

Yes, you'd still owe the self-employment tax. There are a couple ways to potentially reduce it though: You can deduct half of your self-employment tax on your tax return, which helps a little bit with your income tax (though not with the SE tax itself). Another option is to form an S-Corporation instead of operating as a sole proprietor/single-member LLC. With an S-Corp, you can pay yourself a "reasonable salary" and take the rest as distributions, which aren't subject to self-employment tax. However, there are additional costs and paperwork with an S-Corp, so it's usually only worth it when your profit is higher.

This is so important! I learned this the hard way my first year of self-employment and got hit with penalties. Now I just set aside 25-30% of every payment I receive into a separate savings account for taxes.

That's a great system! I actually use a similar approach but with percentages based on my tax bracket. I put 15.3% away for self-employment tax plus another 12% for income tax (since I'm in that bracket). Makes tax time way less stressful when the money is already set aside.

Oh crap I didn't even think about FBAR stuff. I do have a local bank account here but it's never had more than like $5k in it so maybe I'm ok? What happens if you miss filing those in previous years?

If your foreign accounts never exceeded $10,000 total (combined value of all foreign accounts) at any point during the year, you're not required to file the FBAR for that year. So based on what you've said, you should be fine on that front. If someone does need to file back FBARs, there's a streamlined filing procedure for people who weren't aware of the requirement. The IRS recognizes that many Americans abroad simply don't know about this obligation. The penalties for non-willful violations are much less severe than if they think you were deliberately hiding assets.

This happened to my brother too. The penalties literally doubled what he owed. He had to set up a payment plan for 3 years to clear it all.