I moved to France last year and just filed with both forms. Here's what I learned: keep DETAILED records of every single day you're in and out of the foreign country! I almost failed the physical presence test because I didn't realize my vacation back to the US for Christmas counted against my 330 days. Had to dig through old emails to find flight confirmations.

Hey Amina! I went through this exact same situation when I was working in the UAE last year. You definitely need both forms - Form 1040 is your main tax return that reports all your income, and Form 2555 is like an attachment that calculates your Foreign Earned Income Exclusion. Since you're in Dubai (no income tax), the FEIE is definitely your best bet rather than the foreign tax credit. With your $73,200 income, you should be able to exclude most or all of it if you qualify for either the physical presence test (330 days in a foreign country over 12 months) or bona fide residence test. One heads up - make sure you keep detailed records of all your travel dates! Even short trips back to the US can affect your physical presence test qualification. I learned this the hard way when I almost missed the 330-day requirement because of a family visit I forgot to account for. The IRS website is definitely confusing for international stuff. If you get stuck, don't hesitate to reach out to a tax professional who specializes in expat taxes - it's worth the peace of mind!

make sure u file those kids as dependents correctly tho. IRS be clownin people who mess that up 🤡

Just wanted to add - definitely file for the Child Tax Credit and Additional Child Tax Credit if you qualify! With 4 kids and that income level, you could be looking at up to $2,000 per child. Also, since you're doing gig work, make sure you're tracking business expenses like phone bills, car expenses, etc. for next year. The standard mileage deduction is usually the way to go for delivery drivers. Don't stress too much - sounds like you'll probably come out ahead with those credits!

As someone who's been dealing with small business taxes for about 5 years now, I can absolutely confirm what everyone else is saying - this is actually GOOD news! I've had this exact message appear on my account twice, and both times it was because the IRS was actively working on something in my favor. The first time was when I had submitted a request to change my payment plan terms after a particularly rough quarter. The "blocked from automated levy program" appeared within a few weeks and stayed there for about 3 months while they processed my request. No automated collections happened during that time, which was exactly what I needed while getting my cash flow sorted out. The second time was after filing an amended return that showed I had actually overpaid. Again, the block appeared and protected my account while they worked through the amendment and processed my refund. What's really frustrating is how the IRS makes this protective measure sound so ominous. It's like getting a notification that says "You are blocked from having your lunch money stolen" - technically good news, but phrased in the most anxiety-inducing way possible! The key thing to remember is that this block means a human is actually looking at your account, which is generally much better than leaving everything to automated systems. Hang in there - based on everyone's experiences here, this will resolve itself once they finish whatever review process is happening behind the scenes.

I just discovered this thread after seeing the exact same message on my account this morning and having a complete meltdown thinking I was about to lose everything! Reading through everyone's experiences has been such a huge relief - it's amazing how we all had the identical panic reaction to what is apparently protective language. What really gets me is how the IRS has somehow managed to make "we're helping you" sound like "we're coming for you." The phrase "blocked from automated levy program" immediately conjures images of asset seizures and bank account freezes, when it actually means the opposite - they've turned OFF those scary automated systems while working on your case. In my situation, I had requested an installment agreement modification about 2 months ago after some unexpected medical expenses threw off my payment schedule. I've been checking my account obsessively wondering if it was approved, and seeing this message made me think they had rejected it and were preparing collection actions. Now I realize it's actually confirmation that they're actively reviewing my request while protecting me from any automated enforcement. This community wisdom is honestly better than spending hours on hold with the IRS or trying to decode their cryptic official publications. Thank you to everyone who shared their stories - you've turned what started as my worst Monday morning in months into actually understanding that this system is working FOR me, not against me. The IRS really needs to hire whoever writes instruction manuals for IKEA furniture - at least those are confusing but not actively terrifying! 😅

I totally get that pre-opening anxiety! I've been there multiple times and that sick feeling when you see the IRS envelope in Informed Delivery is just awful. One thing that's helped me is remembering that March is peak processing season - they're churning through millions of returns and sending out tons of routine correspondence. Could literally be something as simple as "we received your return" or "your refund is processing." I actually started keeping a little log of IRS letters I've received over the years, and honestly about 85% turned out to be completely routine stuff that required zero action from me. The ones that did need responses were usually just requests for additional documentation that took maybe 15 minutes to handle. Try to get a good night's sleep tonight - tomorrow you'll have actual information instead of just anxiety-fueled speculation!

I feel you on this anxiety! That Informed Delivery preview is both a blessing and a curse - you get advance warning but then have to sit with the worry all day. I've gotten probably a dozen IRS letters over the years and only one was actually problematic (turned out to be a simple math error they caught). The rest were things like payment confirmations, return acknowledgments, or updates to my taxpayer info. Since you mentioned being extra careful this year after learning from the crypto situation, you're probably in really good shape. One thing that helps me is remembering that truly urgent IRS matters usually come certified mail or require signature - regular mail is typically routine stuff. Whatever it is, you'll handle it. The unknown is always scarier than the reality!

Great question about sole proprietorship dissolution! I went through this exact situation last year when I closed my home-based bookkeeping business. One thing that really helped me was keeping detailed records of the original purchase dates and costs of all my business assets. Since you mentioned $15,000 worth of equipment over 3 years, make sure you have documentation showing when each item was placed in service and what depreciation method you used. For your specific situation with the woodworking tools, if you've been depreciating them using MACRS (Modified Accelerated Cost Recovery System), most of your equipment likely falls under the 7-year recovery period. This means items purchased in your first year might be getting close to full depreciation, while newer purchases could trigger recapture if converted to personal use. The delivery van is particularly important to handle correctly since it's listed property. You'll want to calculate what percentage was used for business versus personal use in your final year of operation. If you've been claiming 100% business use but plan to use it for family trips, that conversion needs to be reported properly. I'd recommend creating a spreadsheet listing each asset, its original cost, accumulated depreciation, and current fair market value before making any final decisions. This will help you see which items are already fully depreciated (no tax consequences) versus which ones might create tax liability.

One thing I haven't seen mentioned yet is the impact on your self-employment tax obligations when closing a sole proprietorship. Since you've been filing Schedule C, you've likely been paying self-employment tax on your net business income throughout the years. When you close the business, make sure you understand how this affects your Social Security credits. The self-employment tax you paid on your woodworking business income counts toward your Social Security work history, so you'll want to ensure your final year is properly reported. Also, if you have any outstanding quarterly estimated tax payments scheduled for this year, you'll need to adjust those with the IRS since your self-employment income will drop to zero. You can use Form 2210 to request a waiver of any underpayment penalties if your income changes significantly due to the business closure. Don't forget to keep all your business records for at least 3 years after filing your final Schedule C (or 7 years if you claimed any losses). This includes receipts for all those tools you'll be converting to personal use, in case the IRS has questions about the depreciation calculations later.