I'm also in a community property state (Arizona) and had this exact issue with my husband. Here's what we found out after consulting with a CPA who specializes in this area: 1. For community property states, the legally correct way is indeed to split all community income 50/50 on Form 8958 2. For PSLF purposes, this often creates a problem because even though you're filing separately, your spouse's income effectively gets counted in your AGI 3. Some tax preparers (especially chain preparers) don't understand these special rules well What we ultimately did was hire a CPA who specialized in student loan issues to help us identify which of our income was truly separate property vs. community property. There were actually several things we could legally classify as separate property, which helped minimize the impact. Whatever you decide, just make sure both returns are consistent with each other. The biggest red flag for the IRS is when spouses in community property states report inconsistently on MFS returns.

Speaking from personal experience in Texas (another community property state), you really need to be careful here. My wife and I did something similar - she reported only her income, I reported only mine - and we got letters from the IRS about two years later. We ended up having to amend both returns and pay some penalties and interest. The IRS specifically cited our failure to properly allocate community income on Form 8958. If I were you, I'd strongly consider: 1. Having your wife amend her return to properly split community income 2. Filing your return correctly (as the preparer suggests) 3. At minimum, making sure both returns use the SAME methodology The inconsistency between your returns is more likely to trigger questions than both of you doing it the same way, even if that way isn't technically correct.

Something I learned the hard way after a few years running my production company - make sure you're tracking your state film incentives properly! Depending on your state, these can be tax credits, rebates, or grants, and they're all treated differently for tax purposes. I'd recommend creating a separate tracking system just for incentives and credits. Also, if you're filming in multiple states, you might need to file taxes in each of those states if you meet their thresholds. And please don't forget about sales tax! Some states require you to pay sales tax on production equipment and services, while others have exemptions for qualified productions. Worth checking before you make big purchases.

Don't forget about tracking non-cash compensation! If you're giving crew members credit in the film or rights to use footage for their reels in lieu of some payment, technically that has value. Same with giving people copies of the film or other perks. I learned this when I got audited two years ago. The IRS questioned why some of my "staff" didn't receive 1099s despite being listed in credits. It became a whole thing about whether their compensation fell below reporting thresholds when including non-cash benefits. Now I document EVERYTHING - meals provided, equipment they get to use, credit value, etc. Better to have too much documentation than not enough!

Just want to add something that nobody mentioned yet - make sure your invoice or W9 form matches EXACTLY how your name appears on your tax registration. I had this issue because my FEIN was registered under "John Q Smith Consulting" but my invoices just said "John Smith Consulting" - that tiny difference caused payment rejections. For a sole prop, the safest approach is to use your SSN and your exact personal name as it appears on your Social Security card, then "doing business as" your business name. That's worked for me with all clients for the past 5 years without any kickbacks from payment systems.

quick question - does anyone know if having this kind of EIN/SSN mismatch trigger any kind of audit flags with the IRS? I'm dealing with the same issue and now I'm worried this might cause bigger problems down the road

Another thing to consider with your plan: FBAR requirements for your Canadian accounts. As a green card holder, you'll need to file FinCEN Form 114 annually to report your foreign financial accounts if their aggregate value exceeds $10,000 at any point during the year. Also, be cautious with your TFSA. While it's tax-sheltered in Canada, the US doesn't recognize its tax-free status. Any income earned in your TFSA will be taxable on your US return, which is why closing it before becoming a US resident is a good move. Have you considered the implications for any Canadian retirement accounts like RRSPs? Under the treaty, you can defer US taxation on RRSPs, but you need to file Form 8891 to make this election.

Have you factored in potential "exit tax" implications when leaving Canada? If the fair market value of your worldwide assets exceeds CAD $1.6 million at the time you become a non-resident, you might be subject to a deemed disposition of your property, potentially creating additional tax liability.

22 Just to add another perspective - I'm an accountant and see this situation all the time. The IRS doesn't care if you only did one job or a hundred jobs - income outside of a W-2 employment relationship is considered self-employment income and needs to be reported on Schedule C. The threshold for the payer to issue a 1099-NEC is $600, but your obligation to report income exists regardless of whether proper documentation was provided to you. The IRS considers ALL income taxable unless specifically excluded by law. One thing to consider: since this is over $400 net income, you'll also need to pay self-employment tax on it (the SE tax threshold is lower than the income tax threshold). Make sure you complete Schedule SE along with your Schedule C.

11 FYI - I'm a freelance coder and tax preparation software doesn't always handle one-time self-employment situations well. They often try to categorize you as either "fully employed" or "fully self-employed" which creates confusion. If using software like TurboTax or H&R Block, make sure you enter this under "additional income" or "self-employment income" rather than trying to create a whole business entity. You'll need to complete a Schedule C regardless of how small the job was. The important thing is reporting the income correctly - not necessarily fitting into their pre-defined categories. And don't forget about state taxes too! Many states also require you to report self-employment income separately.