Does anyone know how the IRS treats foreign tax credit carrybacks from passive category income? I have excess credits from foreign dividends and I'm not sure if there are special rules when carrying these back.

I went through this exact same headache last year! After reading through all these responses, I want to add one more tip that really helped me. When you're preparing your Foreign Tax Credit Carryback Statement, make sure to clearly label which tax year each number comes from. The IRS agent I spoke with mentioned they see a lot of confusion where people mix up the years in their calculations. Also, if you have multiple types of foreign income (like both passive dividends and active business income), you'll need separate carryback calculations for each category since they can't be mixed. I learned this the hard way when my first submission got rejected. The template @Natasha Volkov shared is spot on - I used something very similar and it was accepted without any issues. Just remember to keep copies of everything because if the IRS has questions later, you'll want to be able to show your work.

Great question about quarterly payments! The general rule is to pay 25% of your expected annual tax liability each quarter (due dates are April 15, June 15, September 15, and January 15). For freelancers just starting out, I recommend calculating based on your projected annual income. Take your expected yearly profit, multiply by your tax rate (including self-employment tax), and divide by 4. If you're unsure, it's better to slightly overpay than underpay - you'll get a refund if you overpay. A safe harbor rule: if you pay 100% of last year's total tax liability through withholding and estimated payments (110% if your prior year AGI was over $150k), you won't owe penalties even if you end up owing more tax. Since you're new to freelancing, this might be the safest approach for your first year while you figure out your income patterns. The IRS has Form 1040ES with worksheets that help calculate the right amount. Many people also set aside 25-30% of each freelance payment in a separate account to cover taxes.

The safe harbor rule applies to your total household tax liability when filing jointly, not just your freelance income. So you'd look at 100% of what you and your husband owed in total taxes last year (or 110% if your joint AGI was over $150k). Since your husband has W-2 withholding, that actually works in your favor! His regular paycheck withholding counts toward meeting the safe harbor threshold. You'd only need to make estimated payments for the portion not covered by his withholding. Here's a simple approach: Look at last year's total tax on your joint return. Subtract what will be withheld from your husband's paychecks this year. The difference is roughly what you need to cover through estimated payments for your freelance income. Divide that by 4 for your quarterly amounts. This way you're not starting from scratch with calculations - you're just filling the gap that his withholding doesn't cover.

This happened to me too! But protip: if you start over and go to the IRS Free File page and click through to TaxSlayer from there, you actually get the truly free version. The "Simply Free" on their regular site is different from the IRS Free File version. It's super shady marketing but there are actually two completely different "free" products - one with tons of gotcha upgrades and one that's actually free because it's part of the IRS program. Companies intentionally make their regular "free" version limited so they can upsell you.

This is exactly why I always recommend doing your research BEFORE starting any tax software. The "free" marketing from these companies is deliberately deceptive - they know most people won't read the fine print about what triggers paid upgrades. For future reference, the IRS has a tool called the "Free File Software Lookup Tool" where you can enter your income and tax situation upfront to see which providers will actually be free for you. It would have shown you that TaxSlayer's regular "Simply Free" excludes HSA contributions. Also, if you're willing to put in a little extra effort, the IRS Free File Fillable Forms are completely free for everyone regardless of income or complexity. It's basically filling out the actual tax forms online with some basic math help. Not as user-friendly as the interview-style software, but 100% free with no gotchas. Sorry you got hit with those surprise charges - it's frustrating when companies prey on people just trying to do their taxes correctly.

Great question! I had the same confusion when I first got an HSA. The code W in box 12b is definitely your HSA contributions, and Connor Murphy's explanation above is spot on. One thing that helped me understand it better: think of your W-2 as showing you what already happened tax-wise during the year. The $3,875 with code W was money that never got taxed as income - it went straight to your HSA before taxes were calculated. That's why your box 1 wages are lower than your actual gross pay. Form 8889 is basically just telling the IRS "hey, here's confirmation of those HSA contributions you already gave me a tax break for." You're not getting taxed on it again or getting an extra deduction - you're just documenting it. The real tax magic already happened when the money went into your HSA pre-tax throughout the year via your paychecks and employer contributions.

One thing that caught me off guard with my first HSA was the contribution timing. Even though your employer contributions and payroll deductions show up as that single code W amount on your W-2, they might have been made at different times throughout the year. For example, my employer makes their contribution in January for the whole year, but my payroll deductions happen each pay period. This doesn't affect your tax reporting (it all goes on Form 8889 the same way), but it's good to understand when planning your HSA strategy. Also, keep in mind that you have until the tax filing deadline (April 15th) to make additional direct contributions to your HSA for the previous tax year. So if you're under the annual limit based on what's showing in box 12b, you still have time to contribute more and get that tax deduction. Just make sure you don't exceed the annual limits that Connor mentioned earlier!

I'm in this exact same situation right now! Submitted my Form 8802 in mid-March and I'm at about 4.5 months with complete silence from the IRS. I need my Form 6166 for a tax treaty with Ireland and the waiting is getting really stressful. This thread has been incredibly helpful though - it's reassuring to see that the 4-5 month timeline is unfortunately the new standard rather than something going wrong with my specific case. The consistency across everyone's experiences gives me confidence that my form is just working through their massive backlog. I actually called 267-941-1000 last week and waited about 2.5 hours on hold (painful but doable if you have other work to do). The agent confirmed my form is in processing and that March submissions are currently being worked on. She said I should expect my certification within the next 2-3 weeks, which was such a relief to hear! For anyone still waiting, I'd definitely recommend making that call once you hit the 4-month mark. Yes, the hold time is brutal, but getting confirmation that your form isn't lost makes all the difference psychologically. The agent was actually quite helpful and understanding about the delays. Hang in there everyone - based on what I learned from the call, it sounds like March and early April submissions should start coming through very soon!

I'm dealing with this exact same frustrating situation! I submitted my Form 8802 back in early March and I'm now at the 4.5 month mark with absolutely zero communication from the IRS. I need my Form 6166 for some business tax issues with the UK and the complete silence has been driving me crazy. Reading through everyone's experiences here has been so helpful though - it's actually reassuring to know that the 4-5 month wait is unfortunately the new normal rather than something specific going wrong with my submission. The consistency of these timelines across so many different cases gives me confidence that my form is just working through their massive backlog. I think I'm going to call that 267-941-1000 number this week. Based on what James shared about March submissions currently being processed, hopefully I can get some confirmation that mine is moving through the system. The 2+ hour hold time sounds awful, but getting that peace of mind seems absolutely worth it at this point. That outdated COVID message on their website is so frustrating - you'd think they could update it with realistic current processing times by now. A simple "expect 4-6 months" would help so much with planning and managing anxiety. Thanks to everyone for sharing their experiences and timelines. This community has been invaluable for understanding what to expect and knowing we're not alone in this bureaucratic nightmare. Hopefully those of us from March will start seeing our certifications arrive very soon!