


Ask the community...
Just want to add - don't rush to file the moment the IRS opens if you're expecting forms other than your W-2! I made that mistake last year and had to file an amended return because my 1099-INT from my bank came late. Also, if you had any foreign accounts or investments before moving to the US, you might need to file a FBAR form (Report of Foreign Bank and Financial Accounts) separately from your tax return if the total value was over $10,000 at any point during the year. That deadline is actually different from the regular tax deadline.
Oh wait, I do still have a savings account back in Canada with about $15,000 CAD in it. I had no idea I needed to report that! Is that going to cause problems? And does that mean I can't file early?
You definitely need to file an FBAR for that account since it exceeds $10,000. It's not part of your tax return though - it's filed separately through FinCEN (Financial Crimes Enforcement Network). Don't panic! It's just an information reporting requirement, not a tax. You can still file your regular tax return early, and the FBAR is due April 15th with an automatic extension to October 15th. Make sure you also report any interest earned on that Canadian account on your US tax return (Schedule B). The fact that you're asking about this now is good - it's much better to handle it correctly from the start rather than having to fix it later!
Has anyone used the IRS Free File program as a first-time resident? I heard there are income limits but I'm not sure if residency status affects eligibility?
I used IRS Free File last year as a new resident (moved from Australia). As long as you meet the income requirements (under $73,000 for most programs), your residency status doesn't affect eligibility. They'll ask questions about when you became a resident, but the free software handles it just fine!
Fellow illustrator here! One thing that saved me when I had a similar situation was going through my email for digital receipts. Check your inbox for: - Adobe subscription payments - Art supply store order confirmations - Computer/tablet/hardware purchases - Online course payments - Website hosting fees Also check your social media DMs if you arrange client work there. My Instagram DMs had tons of evidence of client negotiations that helped prove income sources. And don't forget apps like Venmo or Cash App if you've used those!
Thank you so much for these specific suggestions! I never thought to check my email archives but I just did a quick search and found at least 15 receipts for art supplies I'd completely forgotten about. Found records of my Procreate purchase, Clip Studio subscription, and even some drawing tablet accessories. Do you think PayPal's reports will show both my income AND my business expenses if I purchased them through PayPal? Or do I need to sort that out separately?
PayPal reports will show all your transactions, but they won't distinguish between personal and business expenses automatically. You'll need to go through and identify which purchases were for your illustration work. Your PayPal 1099 only reports your income received through PayPal, not your expenses. I'd recommend downloading your PayPal transaction history for the full year and sorting it in a spreadsheet. Look for payments to art supply stores, software companies, and other business-related vendors. Flag those as potential deductions, then verify with any email receipts you can find to confirm the purpose of each purchase.
Don't ignore your taxes!! I did that for two years as a freelancer and ended up owing over $15,000 with penalties and interest. The IRS eventually garnished my bank account and it was a NIGHTMARE to fix. Even filing with estimates is way better than not filing at all. And definitely set up quarterly estimated tax payments going forward - that was my big mistake, thinking I could just pay it all at the end of the year.
Exactly this! I wasn't just hit with the taxes I owed but also a 25% failure-to-file penalty PLUS interest that kept growing. The IRS is actually pretty reasonable if you file on time and work with them, even if you can't pay right away. It's when you don't file that they get aggressive.
When I was in ur situation I just put "EXEMPT" on my w4 (there should be a place for this on the form). That way they don't take any federal taxes out at all. Just be aware they'll still take out Social Security and Medicare taxes no matter what (those are different
Unrelated to the withholding question, but make sure your parents understand how claiming you impacts their taxes vs you filing independently. Sometimes parents claim kids without actually running the numbers both ways. In some situations, it might be better overall if they don't claim you, but you'd need to talk with them about it.
Something nobody mentioned yet - if you have a regular W-2 job AND self-employment income, you still need to report the self-employment income even if it's under $400. The $400 threshold is just for paying the self-employment tax (Social Security/Medicare), but you still pay income tax on all your earnings. I learned this the hard way when I got a letter from the IRS about unreported income from a small web design project I did.
Wait seriously? So even if I only make like $200 from dog walking, I still need to report it? Does that mean I need all those complicated self employment forms too or just report it as extra income somewhere? This is exactly the kind of detail that confuses me.
Yes, you still need to report it, but it's not as complicated as it sounds. You'll need to fill out a Schedule C to report your business income and expenses, but it's pretty straightforward for a simple side gig like dog walking. You won't need to pay the self-employment tax (the Social Security and Medicare portion) if your net profit is under $400, but you'll still include that income on your regular 1040 form and potentially pay income tax on it depending on your overall tax situation. Many tax software programs will walk you through this pretty easily.
Jumping in to add something important - keep GOOD RECORDS of your self-employment income and expenses! I've been self-employed for 3 years and the biggest thing that saved me was creating a simple spreadsheet from day one. Log every payment you receive and every expense related to your work. Take photos of receipts. If you use your car for business, track miles. It's so much easier to do this as you go than to try reconstructing everything at tax time.
Serene Snow
Has anyone tried just using the numbers from their last paystub and filling out the substitute W-2 form (Form 4852)? I'm in this exact situation - my employer shut down their whole operation in November and literally no one is responding to emails. My tax guy says I can use my last paystub to fill in all the numbers, but I'm worried about accuracy since some of my deductions were weird toward the end (they started taking out different health insurance amounts when they were having financial problems).
0 coins
Issac Nightingale
ā¢I did this last year when my W-2 never showed up. Used my December paystub and filled out Form 4852. It worked fine but I had to file a paper return which took FOREVER to process. Got my refund like 5 months later. Also make sure your YTD (year to date) numbers are actually for the full year. My paystub reset the YTD fields in July for some weird reason so I had to add two numbers together. Check if you have an earlier paystub to compare.
0 coins
Serene Snow
ā¢Thanks for the info. I do have all my paystubs thankfully, so I can check the YTD totals. Did you just attach the 4852 form to your regular return? And did the IRS ever question any of your numbers or was it all accepted as submitted?
0 coins
Romeo Barrett
For anyone dealing with this issue in the future - the IRS usually gets W-2 information from employers by late March even if the business closed. The transcript might not be immediately available online, but an IRS rep can often see it in their system before you can. Also worth knowing that if you absolutely can't get the info and must estimate, make your best guess using your final paystub and file on time. If you find out later that your numbers were wrong, you can always file an amended return. Better to file on time with estimates than miss the deadline completely!
0 coins
Marina Hendrix
ā¢Quick question - if I end up filing with Form 4852 and estimated numbers, and later the actual W-2 data shows up in the IRS system with slightly different amounts, will I definitely need to amend? Or is there some threshold where small differences don't matter?
0 coins