I hadn't really considered a reverse mortgage. Are the fees for those reasonable? I've heard mixed things about them over the years. Also, wouldn't I need to be purchasing my new home before I could get a reverse mortgage on it? Since I don't currently own a property in my new town yet.

The fees can be substantial - typically 2-5% of the home's value. But compared to the tax hit from a large IRA withdrawal, it might still be advantageous. There actually is a specific type called a HECM for Purchase that lets you buy a new home with a reverse mortgage. You make a down payment (usually around 50-60% of the purchase price) and the reverse mortgage covers the rest. You'd never have mortgage payments, though you'd still be responsible for taxes, insurance, and maintenance.

A 1031 exchange wouldn't work if they're planning to live in the new property as their primary residence. The replacement property in a 1031 exchange must be used for business or investment purposes.

That's helpful but what if your income this year is way different from last year? I made much more this year so I'm worried about owing a huge amount at tax time if I just base it on last year's taxes.

That's a valid concern. The safe harbor just protects you from penalties, but you're right that you could end up with a large tax bill if your income increases significantly. If you expect to make substantially more this year, you might want to use the regular worksheet method to calculate payments based on your projected current year income. You can also adjust your payments for future quarters if you realize you're not paying enough. Just remember that each quarterly payment has its own due date and covers specific periods of income, so adjusting later payments doesn't retroactively fix earlier underpayments.

I use TurboTax Self-Employed and it does have a feature to calculate your quarterly payments. You input your estimated income for the year and it generates payment vouchers with the amounts. I've found it pretty helpful but it doesn't automatically adjust if your income changes during the year - you have to go back in and recalculate.

Do EAs actually handle the legal aspects of streamlined filings though? I thought those required actual attorneys since there can be potential criminal implications with unreported foreign accounts.

EAs can absolutely handle streamlined filings as they're authorized to represent taxpayers before the IRS for audit, collection, and appeal matters. The streamlined filing procedures are specifically designed for taxpayers whose conduct was non-willful, meaning there was no intentional wrongdoing - these cases typically don't involve criminal implications. Where attorneys become necessary is when there's potential criminal exposure or if the non-compliance might be considered willful. If you're concerned your situation might involve willful non-compliance, then yes, you should consult with an attorney who specializes in criminal tax matters. But for the majority of streamlined filing cases where someone simply didn't understand their foreign reporting requirements, an EA or CPA with international tax experience is completely qualified and often more cost-effective.

I worked at H&R Block for 5 tax seasons. While they have some good preparers, most don't have specialized knowledge in international compliance issues like streamlined procedures. Their training focuses primarily on domestic tax matters that affect the average taxpayer. For something as specific as streamlined filings for unreported foreign accounts, you really need a specialist. I'd be very cautious about using a general tax preparation service for this kind of situation.

Thanks for the insider perspective. That's disappointing but good to know before I waste my time. I guess for specialized stuff you really do need specialists, even if it costs more.

That's how all the tax brackets work though? Singles get phased out at lower amounts than married filing jointly. It's not unique to the child tax credit formula. Married couples filing jointly have a $400k threshold vs $200k for other filing statuses.

True, but the gap seems bigger for this credit than for other things. And considering single parents have all the responsibility with no support, you'd think they'd give us a break on the child tax credit formula at least. I just find it frustrating that two incomes totaling $390k can get the full credit while a single parent making $210k gets less help per child. The cost of raising kids doesn't magically go down just because there's only one parent in the household.

Unfortunately, the rule is that the child must be under 17 at the END of the tax year (December 31st) to qualify for the child tax credit. Since your daughter turned 17 in November 2024, she wouldn't qualify for the 2024 tax credit when you file in 2025. However, check if you qualify for the Credit for Other Dependents (worth up to $500) which has no age limit as long as she's your dependent.

Shoot I didn't even think about that! I was planning to go with Schwab. Does anyone know how long they typically take to process?

With Schwab, you're cutting it close but might still be okay. Last I checked, they can typically establish a solo 401k within 1-2 business days if all your paperwork is complete and accurate. I'd recommend calling them directly ASAP though - their customer service can tell you exactly what you need and might even be able to expedite the process if you explain the deadline situation. One important thing: make sure you have your EIN ready! If you don't already have an Employer Identification Number from the IRS for your business, you'll need that before opening a solo 401k. That's another process that could add time.

This is great information but I'm still a bit confused. So if I just get the paperwork submitted tonight, I'm good? And then I can actually fund it later? Does the solo 401k need to be with the same bank where I have my business checking account?