Thank you for this insight. I hadn't considered doing just a consultation. Would that one hour really be enough to catch potential issues across multiple tax years including the business transition?

A one-hour consultation won't be comprehensive enough to catch everything across multiple years, but it would be enough time to identify major red flags in your approach and give you guidance on the areas where software typically fails for business returns. If you're going the DIY route, I'd actually recommend two consultations - one before you start to get a strategic approach, and one review after you've prepared the returns but before filing. The key is finding someone experienced with both the sole proprietor to LLC transition and back tax situations.

The Fresh Start program isn't actually a specific program you apply for - it's a collection of different IRS initiatives that make it easier to resolve tax debt. The main components are expanded installment agreements, offers in compromise with more flexible terms, and tax lien procedures. For OP's situation with unfiled returns, the most relevant part would be penalty abatement options after filing the back returns. First-time penalty abatement is available to many taxpayers who haven't had previous issues.

How do you figure out if there's a tax treaty benefit for your country? Is this something standard tax software will catch or do you need a specialist?

Standard tax software like TurboTax and H&R Block will ask questions about your citizenship and residency status, then apply any relevant tax treaty benefits automatically. The software will prompt you to identify your country of citizenship, and it has the treaty information built in. However, if you want to check yourself before filing, you can look up tax treaties on the IRS website - Publication 901 "U.S. Tax Treaties" lists all current treaties and explains the specific benefits. Common benefits include reduced taxation on certain types of income or special rules for students, teachers, and researchers. The treaty articles can be a bit technical to read, but the overview tables in Publication 901 make it fairly straightforward to see if any benefits might apply to your situation.

Which software did you end up using that worked well with the ITIN situation? I'm trying to decide between a few options.

Does H&R Block handle the capital gains calculation correctly? My situation is complicated because some of my RSUs vested early in the year and then I sold them months later when the price had changed quite a bit. I need to make sure I'm reporting both the initial income and the capital gains/losses correctly.

Yes, H&R Block handles the capital gains calculation correctly. It separates the initial income recognition (which appears on your W-2) from any subsequent capital gains or losses that occur between vesting and selling. When you enter your stock sales, you'll provide both the sale price and the cost basis (which is the fair market value on the vesting date). The software then correctly calculates only the difference as capital gains/losses. It's much more straightforward than TurboTax, especially for situations where there's a significant time gap between vesting and selling with price changes.

Form 3922 is for ESPP (Employee Stock Purchase Plans), not RSUs. For RSUs, employers typically provide a summary statement but not a specific IRS form. Most just include it on your W-2 and provide supplemental information.

Thanks for this clarification! So if I understand correctly: I should definitely file Schedule C with my business expenses to reduce my self-employment tax, but that's completely separate from deciding between itemized vs. standard deduction? And since my total income is only around $32,500, the standard deduction ($13,850) is probably better unless I have some major itemized deductions?

Yes, that's exactly right! File Schedule C to report your 1099 income and expenses (which reduces or eliminates self-employment tax on that income). And yes, at your income level, you'll almost certainly want to take the standard deduction unless you have extraordinary itemized deductions like major medical expenses, huge charitable contributions, or large mortgage interest payments. For most people in your situation, itemized deductions don't exceed the $13,850 standard deduction.

Just be careful with the home office deduction - it has to be a space EXCLUSIVELY used for business. If you sometimes use that desk/room for anything personal, it doesn't qualify. I got audited over this once.

Thanks for bringing this up! My qualified expenses should be enough since my tuition and required fees were about $18,000 this year, and I only received a $5,000 scholarship. The bond interest I'm trying to exclude is around $2,400. I wasn't counting room and board - good to know that's excluded for this benefit. Does it matter if some of the qualified expenses were paid from a 529 plan? Or does that create another reduction?

Yes, expenses paid with 529 plan distributions would reduce your qualified education expenses for the savings bond interest exclusion. The IRS doesn't allow "double-dipping" of tax benefits. So if you used $8,000 from a 529 plan to pay for some of that $18,000 in tuition and fees, and received a $5,000 scholarship, your remaining qualified expenses for Form 8815 would be reduced to $5,000 ($18,000 - $5,000 - $8,000). That would limit how much bond interest you could exclude.

There's no time limit between when the bonds were issued and when you use them for education. As long as you cash the bonds and pay the qualified education expenses in the same tax year, you can potentially claim the exclusion (assuming you meet all the other requirements about ownership, income limits, etc.). So 2010 bonds used for 2025 education expenses could qualify. Just remember both actions (redeeming the bonds and paying the expenses) need to happen in the same tax year.