Another option worth considering if you have substantial unreimbursed business expenses: talk to your employer about either reimbursing these costs or offering an "accountable plan" for expenses. My company initially wasn't covering our WFH equipment either when we went hybrid, but several of us pointed out the tax disadvantages to employees. They ended up creating a formal expense reimbursement plan that follows IRS "accountable plan" rules. This way, the company gets the deduction and employees receive tax-free reimbursements. Might be worth bringing this up to your HR department with some research on accountable plans. Many employers aren't aware of how these plans benefit both the company and employees.

Just wanted to add another perspective as someone who went through this exact confusion last year. The suspension of miscellaneous itemized deductions really caught a lot of people off guard, especially those of us who had been claiming unreimbursed employee expenses for years. One thing that might help: even though you can't deduct those expenses now, keep detailed records of everything. If the TCJA provisions do expire in 2026 as scheduled, you'll want to have all that documentation ready. Also, some of these expenses might be relevant for other tax situations - like if you change jobs and negotiate expense reimbursement, or if you start any freelance work where they could become legitimate business deductions. The silver lining is that this whole experience taught me to be much more proactive about discussing expense reimbursement with employers upfront. When I started my current job, I made sure to negotiate coverage for professional development and equipment as part of my compensation package rather than assuming I could just deduct it later. Don't feel bad about being confused - the tax code changes have made this area really murky, and even some tax professionals were initially unclear on the implications!

I'm dealing with this exact same situation! My individual 401k just hit the $250k threshold and I'm completely overwhelmed by the Form 5500 requirement. My CPA also basically said "not my department" which left me scrambling to figure out what to do. Reading through all these responses has been incredibly enlightening - especially the breakdown from @Kiara Greene about using Claimyr to talk directly to an IRS specialist first, then handling the EFAST2 filing yourself. The fact that you can get this done for under $50 versus paying $800+ to a TPA is exactly what I needed to hear. I had no idea that solo 401k filings were actually much simpler than the multi-participant plans, or that most of the Form 5500-EZ doesn't even apply to single-participant situations. It sounds like a lot of the complexity and fear around this form comes from CPAs and TPAs not wanting to deal with something outside their usual wheelhouse. Has anyone run into issues with the EFAST2 system itself being glitchy or hard to navigate? I'm pretty comfortable with technology but want to know what I'm getting into before I start the registration process.

I went through this exact same nightmare last year! My solo 401k hit $265k and suddenly I'm getting letters about Form 5500 requirements. My CPA basically said "figure it out yourself" which was incredibly frustrating given what I pay him. After a lot of research and trial and error, here's what I learned: your CPA isn't necessarily being lazy - Form 5500 filings really are a specialized area that most general tax preparers don't handle. It's like asking your family doctor to perform brain surgery - technically they're both medical professionals, but it's just not their specialty. The good news is that for solo 401k plans, the filing requirements are much simpler than the horror stories make them sound. You're not dealing with discrimination testing, complex participant data, or most of the schedules that make these forms nightmarish for larger plans. I ended up filing mine through the DOL's EFAST2 system after getting my questions answered by an IRS specialist. Total cost was minimal compared to the $1,200+ quotes I was getting from TPAs. The first year is definitely a learning curve, but now I feel confident handling it myself going forward. Don't let the initial overwhelm push you into paying thousands for something you can absolutely handle yourself with the right guidance!

PSA: If you're looking for the current IRS mailing addresses, don't Google it! I did that and ended up on a third-party site with incorrect info. Go directly to IRS.gov and search for "where to mail tax returns" or the specific form you're filing. For most individual returns with payments from western states (AK, AZ, CA, CO, HI, ID, NM, NV, OR, UT, WA, WY), send them to: Internal Revenue Service Ogden, UT 84201-0010 Eastern/southern states typically go to Kansas City. But again, check the official site for your specific situation!

This is such important information - thank you for sharing! I almost made the same mistake last week when I was preparing to mail my quarterly payment. I was using an old 1040-ES booklet from 2023 that still had the Fresno address listed. It's frustrating that the IRS hasn't done a better job communicating these changes. I only found out about the closure when I called to ask about a different issue and mentioned I was about to mail something to Fresno. The agent immediately told me not to do that. For anyone else dealing with this, I'd also recommend considering electronic options when possible. I switched to using EFTPS for my quarterly payments after this scare, and it's actually much more convenient. You get instant confirmation that your payment went through, and there's no worry about mail delays or lost documents. But for forms that must be mailed, definitely double-check those addresses on IRS.gov before sending anything!

Is there a tax software that actually handles this correctly? I've been using TurboTax for my small business and it asks me to select a depreciation method but doesn't explain the limitations or when I can/can't make changes. Just looking at switching to something better for next year.

This is a great question that I see come up a lot! To add to what others have said - the key thing to understand is that depreciation method elections are made on a per-asset basis when you first place the property in service, not something you can change year to year. However, there are a few important points worth clarifying: 1. **New assets vs. existing assets**: For any NEW equipment you purchase, you absolutely can choose 150% declining balance even if your older assets are on 200%. Each asset gets its own depreciation schedule. 2. **Automatic optimization**: Both 200% and 150% declining balance methods will automatically switch to straight-line when that becomes more beneficial - this usually happens in the later years of the asset's life and requires no paperwork. 3. **Section 179 and Bonus Depreciation**: Don't forget to consider whether you might benefit more from Section 179 expensing or bonus depreciation for new equipment purchases instead of worrying about declining balance percentages. The IRS is pretty strict about method changes because they don't want taxpayers gaming the system by switching methods based on annual income fluctuations. If you're really set on changing existing assets from 200% to 150%, you'd need Form 3115 and a valid business reason beyond just tax optimization. What type of equipment are you depreciating? That might help determine if there are other strategies that could work better for your situation.

Has anybody actually tried keeping their foreign mutual funds after becoming a US resident? I'm curious about the real tax impact compared to just selling everything.

This is exactly the kind of situation where getting proper guidance early makes a huge difference. From what you've described, your tax preparer's suggestion about filing 5 years of retroactive FBARs seems overly conservative - as others have mentioned, you were a non-resident alien during those F1 years. One thing I'd add is to be very careful about the timing of when you became a tax resident. The substantial presence test calculation can be tricky, and the exact date matters for PFIC purposes. If you only became a resident partway through 2024, your PFIC reporting might only apply from that specific date forward. Also, regarding your question about selling - consider the timing carefully. If you sell early in your first resident year, you might be able to limit the PFIC gains to just a few months rather than a full year. The compliance burden for ongoing PFIC reporting really is significant, as others have noted. Between the annual Form 8621 requirements and the punitive tax treatment, many people find it's worth taking the one-time hit to get out of these investments entirely. I'd strongly recommend getting a second opinion from a CPA who specializes in international tax before making your final decision. The rules are complex enough that general tax preparers sometimes give overly broad advice.