Oh that's really helpful! How do I know if all my foreign income counts as "passive category income"? I have some dividends from the Singapore mutual funds, but also got some interest from a foreign bank account. Would both of those count as passive?

Both foreign dividends and foreign interest income are considered passive category income, so yes, those would both qualify. The main types of passive income are: - Dividends - Interest - Royalties - Rents (if you're not in the real estate business) - Annuities - Capital gains from selling investment property If those are your only sources of foreign income and your total foreign taxes paid are under the threshold ($300 single/$600 married), you can just claim the credit directly on Schedule 3 without dealing with Form 1116. This exception is specifically designed for taxpayers with relatively simple foreign investment income who don't need the complexity of allocating expenses and dealing with all the Form 1116 limitations.

Oh no, I had no idea about Form 8621! The tax software hasn't prompted me for anything like that. Are there serious penalties if I don't file it? I've only owned these funds for about 2 years and haven't sold any yet.

Unfortunately, yes - the penalties for not filing Form 8621 can be quite severe. The IRS can impose a penalty of up to $10,000 per form per year, and there's no statute of limitations on unfiled PFIC forms (meaning they can come after you years later). Since you haven't sold the funds yet, you might still have time to make elections that could simplify your reporting going forward. I'd strongly recommend consulting with a tax professional who specializes in international tax before your next filing. Many CPAs aren't familiar with PFIC rules, so you might need to find someone who specifically deals with expat/international tax issues. The PFIC rules are honestly some of the most complex in the entire tax code, and getting it wrong can be very expensive.

14 Did the audit end up going okay? I'm considering doing this but terrified of getting audited. How bad was the process?

10 The audit wasn't actually too bad! It was just a mail audit where they asked for documentation. I sent in copies of my 1098-T showing the total qualified expenses, my scholarship award letter, and a statement explaining that I was electing to treat $4,000 of my scholarship as taxable income to claim the AOTC. I also included the relevant IRS publications that explain this is allowed (Publication 970). The whole process took about 3 months from when I got the letter until it was resolved. They accepted everything and I kept my refund. Just make sure your documentation clearly shows you had enough qualified expenses to justify the AOTC claim.

21 Really? I've been filing my taxes for years and never knew this. Does this include a laptop if it was required for classes?

Unfortunately, computers and laptops generally don't qualify for the AOTC unless they're specifically required by the school for enrollment or attendance in a particular course. The IRS is pretty strict about this - it has to be required by the institution, not just helpful or recommended. However, textbooks, lab fees, and course-specific supplies that are required definitely count! Make sure you keep receipts and documentation showing these were required expenses.

Yes! As I mentioned above, I got Meta to issue a corrected form after reaching them through Claimyr. The key is getting to their tax department specifically, not general customer service. They're required by law to issue accurate tax forms, so once you reach the right department, they typically will correct it.

I'm in almost the exact same situation! Meta reported $2,100 but I maybe sold $500 worth of stuff, all cash transactions. From what I've learned reading through this thread, you have a few options: 1. You can definitely attach a statement to your return explaining the discrepancy - this is totally legitimate and shouldn't trigger an audit if you document it properly. Several people here have done this successfully. 2. The IRS understands that marketplace platforms sometimes make reporting errors. As long as you're acting in good faith and can show your actual sales amounts, you should be fine. 3. If you're worried about the timeline, I'd suggest trying both approaches - use Claimyr to try reaching Meta's tax department (as others have had success with) while also preparing your return with the proper documentation in case Meta doesn't respond in time. From what others posted, the corrected form process took about 10 business days once they actually reached the right department at Meta. But given the filing deadline pressure, I'd prepare your return both ways just to be safe.

I've used it for the past 3 tax seasons and thankfully never needed it, but it's only like $40-50 for peace of mind. If you have anything complicated on your return (self-employment, rental property, lots of deductions) it's probably worth it. Basic W-2 returns rarely get audited though.