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One option nobody's mentioned is looking into expat tax specialists who work virtually. I use a CPA based in Seattle even though I live in Thailand. We do everything through video calls and secure document sharing. The advantage is you can find someone with the right expertise regardless of location, often at better rates than the big expat tax firms. Mine charges $600 for a full expat return including FBAR filings and rental property, which is pretty reasonable considering the complexity.
That's a great suggestion! Do you find that the time zone differences are manageable? And did you find them through a referral or some other way?
The time zone difference is honestly not a big deal. We schedule video calls that work for both of us - usually early morning my time, late afternoon Seattle time. Most of our communication happens through email anyway, and she's really responsive. I found her through an American expats in Thailand Facebook group. That's usually my first recommendation - join Facebook groups or forums for expats in your specific country and ask for CPA recommendations. You'll get feedback from people in very similar situations to yours.
Don't forget that credentials matter! Make sure whoever you hire is either a CPA, an Enrolled Agent (EA), or a tax attorney. Random "tax preparers" without these credentials aren't regulated and might not know expat rules. I personally prefer working with EAs for expat situations. They're specifically licensed by the IRS to handle tax matters and often specialize in more complex situations like international taxation. Plus they're usually more affordable than CPAs while still having the expertise you need.
22 For future reference, you can check if you need to amend by looking at the filing instructions that come with most tax forms. In the case of Form 1095-C, it explicitly states on the instructions: "This form is provided for your information only. You don't need to attach it to your tax return, and it doesn't affect your tax liability.
3 Wait, so even if the form wasn't blank, you still don't need to include it with your return? I'm confused because I thought health insurance was required for taxes.
22 You never need to attach any 1095 forms (A, B, or C) to your tax return - they're information documents only. You use the information from them to fill out your tax return correctly, but the actual forms stay with your personal records. The health insurance requirement for tax purposes (the individual mandate) had its penalty reduced to $0 at the federal level starting in 2019. So while technically the requirement still exists, there's no federal penalty for not having coverage. Some states do have their own penalties though, so it depends on where you live.
16 Side question - does anyone know if TurboTax handles these forms automatically? I also got a 1095-C after filing and don't want to pay for an amendment if I don't have to.
20 TurboTax will ask you about health insurance during the filing process, but you don't need to physically enter the 1095-C if it's blank. The software mainly needs to know if you had coverage and for what months. If you already told TurboTax you didn't have coverage through your employer (which matches your blank 1095-C), then you're fine - no amendment needed.
One thing nobody's mentioned yet - make sure you're documenting EVERYTHING during this Form 8300 audit reconsideration process. Keep records of all communications, copies of everything you send, certified mail receipts, etc. I went through this last year for my construction business and what ultimately saved me was having proof I'd actually sent in the original forms that the IRS claimed they never received. The penalties were about $35,000 and they dropped them completely once I provided proof of mailing. Also, the reconsideration took about 5 months in my case, and I did get several confusing letters during the process saying I still owed the penalties. Don't panic if that happens - just respond to each one referencing your reconsideration request.
Thanks for this tip! Did you end up getting any kind of confirmation that they received your reconsideration request? I'm worried about sending it and then it just disappearing into the void.
I did eventually get an acknowledgment letter about 3 weeks after sending my reconsideration request. It basically just said they received it and would respond within 90 days (which turned into 5 months, typical IRS). Make sure you send your request via certified mail with return receipt so you have proof they received it. I also included a cover letter specifically requesting an acknowledgment. If you don't hear anything after about 30 days, start calling to confirm they have your case in the system. This is where having that certified mail receipt becomes crucial - you can reference the delivery confirmation number.
Just went through this exact thing with Form 8300 penalties for my pawn shop. My advice - don't try to handle this yourself! The audit reconsideration process for these specific penalties is super technical. I hired a tax attorney who specializes in information reporting penalties (not one of those TV ad tax relief companies) and she got my penalties reduced from $42,000 to $4,500. Her fee was $3,000 so definitely worth it. The key was she knew exactly what documentation would constitute "reasonable cause" for my specific situation. The whole process took about 6 months from start to finish. Also, she advised me NOT to pay the penalties while we were fighting them, which turned out to be the right call in my case.
Any chance you could share what kind of documentation worked for establishing "reasonable cause"? I'm in a similar situation but can't afford an attorney right now.
Have you considered a middle ground? You could use FreeTaxUSA which is a lot cheaper than TurboTax but still handles Schedule C really well. I have a small LLC making about $30k and have used it for 3 years with no issues. Or if you want a CPA without the big price tag, look into the enrolled agents in your area. They're certified tax specialists who often charge half what CPAs do. Perfect for simple LLC setups like yours.
Thanks for this suggestion! I hadn't considered FreeTaxUSA. What's the difference in features compared to TurboTax? Is it as user-friendly for first-timers?
FreeTaxUSA has all the same forms and capabilities for small business owners, but the interface is slightly less polished than TurboTax. Still very user-friendly though - it asks you all the same questions to find deductions and walks you through Schedule C step by step. The big difference is price - usually under $20 for state filing compared to TurboTax's $120+ for self-employed. The federal filing with FreeTaxUSA is completely free, even with business income. It doesn't have the fancy import features for certain banks, but if you're organized with your numbers, it works perfectly.
I'd go with TurboTax for your first year then reassess. I've been using it for my consulting LLC ($15-30k/year) for 4 years now without issues. Pro tip: track EVERYTHING going forward. Get a separate business credit card and bank account if you haven't already. The software is only as good as the data you give it. I use Wave (free) to categorize expenses throughout the year.
Do you pay for the Self-Employed version of TurboTax or can you get by with the cheaper options? I'm in a similar situation and trying to decide which version to buy.
Xan Dae
One important thing to remember: if your wife's net earnings from self-employment are over $400, she'll need to pay self-employment tax (Social Security and Medicare) which is currently 15.3%. That's in addition to regular income tax. TurboTax will calculate this automatically, but it can be a shock if you're not prepared for it. The upside is that she can deduct 50% of the self-employment tax on her 1040.
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Lorenzo McCormick
ā¢Oh wow, I didn't realize there was an additional tax on top of regular income tax. Does TurboTax factor all this in automatically? And is that 15.3% on the $42,000 she made after expenses or on the full $73,000?
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Xan Dae
ā¢TurboTax will absolutely calculate this automatically for you, so don't worry about figuring it out manually. The self-employment tax applies to her net earnings after expenses (so the $42,000 figure you mentioned), not the gross income. The one good piece of news is that you can deduct half of the self-employment tax on your 1040, which helps offset some of that additional tax burden. Also, don't forget to look into whether you qualify for the Qualified Business Income deduction (Section 199A), which could give you a deduction of up to 20% of qualified business income. TurboTax should walk you through this as well.
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Fiona Gallagher
Just a tip from someone who's been filing a Schedule C for years: SAVE EVERYTHING. Keep receipts and documentation for all business expenses. My wife started a business in 2020 and we got audited in 2021 because we didn't have proper documentation for some larger expenses. For mileage, keep a dedicated log. For home office, take photos and measurements. For equipment purchases, save those receipts! TurboTax can help you file, but if you get audited, you need the backup documentation.
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Thais Soares
ā¢How do you organize all of that? I have a shoebox full of receipts and I'm already dreading next year's taxes.
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