Thanks for mentioning this! I had no idea there was a separate credit. Does this replace the medical expense deduction or can I potentially use both? Also, does it matter that I'm not physically taking care of her myself (since she's in a facility)?

You cannot double-dip by claiming the same expenses for both the Dependent Care Credit and as medical expense deductions. You'll need to choose which is more beneficial based on your overall tax situation. Generally, credits are more valuable than deductions, but it depends on your specific numbers. The good news is that you don't need to physically care for her yourself to claim the Dependent Care Credit. Expenses paid to a care facility qualify as long as part of the expense is for the care of your mom. However, if the facility provides medical care, you need to separate out the cost of care from the medical expense portion if you want to use both benefits for different expenses.

Is there any way to fix this if you've already been giving the money to the parent? My sister and I deposit money in our dad's account and he pays his care facility.

That's helpful, thanks! I moved October 10th and was in the US until December 18th when we returned for the wedding. We stayed in Canada until January 2nd, so that's about 27 days total in Canada for 2024. Sounds like I should be well under the 183-day threshold. Do pre-move days count toward this calculation too? Like, I was obviously in Canada from January-October before moving.

Yes, all days physically in Canada during the calendar year count toward the 183-day threshold, including January-October before your move. So you'd have roughly 9 months plus 27 days, which would put you over the 183-day threshold for 2024. However, this doesn't automatically make you a resident for the whole year. The CRA can recognize a change in residency status during the year. For people leaving Canada, they often consider you a part-year resident up to your departure date if you've legitimately established non-residency after that point. This is why your accountants are focusing on your ties after October, because they're trying to determine if you successfully established non-residency upon your departure.

I'd be careful with NR73. It can be helpful but it's also known to trigger extra scrutiny. My cross-border tax specialist advised against filing it unless absolutely necessary because it essentially puts you on CRA's radar and can lead to additional questions and reviews. Sometimes it's better to take a reasonable position based on your facts and circumstances and be prepared to defend it if questioned, rather than proactively asking for a determination.

Does specific identification actually save you money compared to FIFO? And how exactly do you indicate which specific coins you're selling when you execute a transaction? It's not like stocks where you can pick specific shares.

Specific identification can potentially save significant money compared to FIFO, especially if you've bought the same cryptocurrency at very different price points over time. It allows you to strategically "sell" the lots with the highest cost basis first, minimizing your reported gain. You don't need to specify which coins you're selling at the time of the transaction. What matters is your accounting method and documentation. You need to maintain clear records showing the date and time each unit was acquired, your cost basis, the date and time of sale, and the proceeds. This becomes your evidence for using specific identification. Most specialized crypto tax software can help maintain these records and will let you choose which method to apply when generating your tax forms.

The IRS clarified in 2019 that like-kind exchanges (Section 1031) were never applicable to cryptocurrency trades, even before the 2018 tax law change that explicitly limited 1031 exchanges to real estate. Unfortunately, those 2017 crypto-to-crypto trades were taxable events. If you haven't been reporting them correctly, you might want to consider filing amended returns for those years. The statute of limitations is typically 3 years, but it can be extended in certain cases, especially if the IRS considers it substantial underreporting.

Do you know if there's an easy way to figure out which tax treaty benefits apply? I've tried reading through the actual treaties and they're practically unreadable with all the legal jargon.

The IRS Publication 901 (U.S. Tax Treaties) provides summaries of the major provisions in each treaty in more understandable language. It's still dense reading, but much better than the treaties themselves. For a quicker reference, check the IRS website section on tax treaties where they have tables showing the reduced tax rates for different types of income based on country. However, these only cover basic situations, so for complex scenarios like your colleague's, it might be worth consulting with a tax professional who specializes in international taxation.

Did you have to file a separate 1040-NR for the nonresident part of each year? My accountant is telling me different things each time I ask.

I've never heard of the QBI deduction! How do I know if I qualify for that? And can I really still set up a retirement account for last year even though we're already in the new year?

Most self-employed individuals with income under $170,050 (single) or $340,100 (married) for 2024 qualify for the full QBI deduction. It's basically a 20% deduction on your net business profit. The tax software should calculate it automatically, but make sure it knows your business is a qualified trade or business. Yes, you can absolutely still set up and fund a retirement account for last year! For SEP IRAs, you can establish and contribute until your tax filing deadline, including extensions. So potentially as late as October 15th! Solo 401(k)s need to be established by December 31st of the tax year, but you can still contribute to them until your tax filing deadline. This is one of the best tax-saving strategies for self-employed people.

This is exactly right. I've been self-employed for 5 years and it still hurts every time. The other thing to remember is that half of your self-employment tax is deductible on your 1040, which helps a little bit at least.

That breakdown really helps me understand! So I'm essentially getting hit twice on my business income - once with the self-employment tax and then again when it's added to my regular income for income tax purposes. No wonder the number seemed so high! I appreciate the simple explanation. Now I see why people talk about the importance of tracking every possible business expense. Every dollar I can legitimately deduct from my gross business income helps reduce both tax calculations.