I've had the opposite experience with interest. I miscalculated my quarterlies one year and thought I'd paid enough, but ended up owing more. The IRS hit me with underpayment penalties AND interest that was way more than what they'd pay me in the reverse situation.

This is such a great reminder that the tax system can occasionally work in our favor! I had no idea about the 45-day interest rule until reading this thread. It's refreshing to hear about the IRS actually paying taxpayers interest for once, especially after all the stories we hear about penalties and fees going the other way. Your identity verification experience sounds absolutely painful though - 8 weeks is ridiculous for something that should be straightforward. I'm glad you at least got compensated for their delay with that interest payment. The irony of getting a 1099-INT from the IRS for money they paid you because they were late is pretty amusing! Thanks for sharing this - I'm definitely going to keep this in mind if I ever have a large refund situation. Every little bit helps, especially when it's the government finally paying US interest for a change.

Has anyone dealt with the practical aspects of getting ITINs for foreign members? I've found that to be one of the most time-consuming parts of the process.

One thing I haven't seen mentioned yet is the potential impact of tax treaties between the US and the foreign corporation's country of residence. If there's a favorable tax treaty in place, it could significantly reduce the branch profits tax rate or potentially eliminate it altogether. The standard branch profits tax is 30%, but many treaties reduce this to 5% or even 0% in some cases. Also, consider the timing of your ownership change carefully. If you make the switch mid-year, you'll need to file both a short-year partnership return (Form 1065) for the period with multiple members AND treat the remainder of the year as a disregarded entity/branch operation. This creates additional complexity and potential for errors. I'd strongly recommend consulting with a tax professional who specializes in international business structures before making this change. The compliance burden and potential penalties for getting foreign-owned entity reporting wrong can be substantial.

Don't worry! I'm in a very similar situation - made $102k this year with 3 kids (ages 6, 9, and 11). I was freaking out about the same thing but just ran the numbers and I'm still getting back around $9k. The Child Tax Credit is huge - that's $6k right there for your 3 kids. Plus if you didn't adjust your withholding when your income went up, you probably had more taxes taken out than needed. The key thing is that tax credits reduce your tax liability dollar-for-dollar, so even if you're in a higher bracket, those credits still pack a punch. You'll probably be pleasantly surprised!

Just wanted to chime in as someone who went through this exact same worry last year! Made $99k with 3 kids and was convinced I'd owe money for the first time ever. Ended up getting back $8,900 - almost had a heart attack from relief lol. The Child Tax Credit really is a lifesaver at this income level. What helped me was looking at my paystubs throughout the year to see how much federal tax was actually withheld. If you didn't change your W-4 when you got the raise, you're probably golden. The worst part is just the anxiety of not knowing - once you actually run the numbers or file, you'll likely breathe a huge sigh of relief!

Has anyone here used Schwab's online system to just withdraw from an inherited IRA without the special form? Did it cause problems with your taxes? I'm in a similar situation but honestly the paperwork seems like a hassle if I can just do it online.

I've been managing inherited IRAs for clients for years, and I can confirm that Schwab absolutely requires their specific inherited IRA distribution form for proper tax reporting. The form number mentioned earlier (APP13049) is correct, and you can usually find it on their website under "Forms & Applications" or by calling their inherited accounts team. The key thing to understand is that inherited IRA distributions have special tax codes that need to be applied to your 1099-R. If you just do a regular withdrawal online, Schwab's system won't know to apply the correct distribution code, which could lead to tax complications later. For your situation with wanting to withdraw $6,500, you'll fill out the form indicating it's an RMD distribution, and Schwab will process it with the proper tax coding. The process usually takes 3-5 business days once they receive the completed form. You can often email or fax it to them rather than mailing it in. One more tip: Keep a copy of the completed form with your tax records - it serves as documentation that you properly requested an RMD distribution in case there are ever any questions from the IRS.

One thing I haven't seen mentioned is how the tax treaties between the US and Canada might impact your situation. As a Canadian citizen who's a US tax resident, you might be eligible for certain protections under the US-Canada tax treaty. However, tax treaties generally don't help much with offshore structures in places like the Cayman Islands. In fact, these structures often trigger anti-avoidance provisions in tax laws. My biggest concern would be that this arrangement could potentially be viewed as a tax avoidance scheme by the IRS, especially given the lack of substantial business operations in the offshore jurisdiction. The IRS has become extremely aggressive in pursuing offshore accounts in recent years.

I want to emphasize something that hasn't been fully addressed - the potential criminal penalties for willful failure to report foreign accounts. As someone who went through an offshore voluntary disclosure program, I can tell you the stakes are much higher than just paying additional taxes. The willful failure to file FBAR can result in penalties of up to 50% of the account balance PER YEAR, and in extreme cases, criminal prosecution. Given that you're talking about potentially substantial trading profits, these penalties could be devastating. Also, consider that the IRS has extensive data sharing agreements with financial institutions worldwide. Interactive Brokers, for example, reports account information to the IRS under FATCA requirements, regardless of where your account is domiciled. The idea that offshore accounts provide privacy from the US tax authorities is largely a myth in 2025. My strong recommendation would be to consult with both a US tax attorney specializing in international taxation AND a Canadian tax professional familiar with US treaty provisions before moving forward. The cost of proper planning upfront is minimal compared to the potential penalties and legal fees if this goes wrong.