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More tax revisions
This morning's review of our taxes had me revising both Form 2555-EZ and Schedule C. The latter went on to affect Form 2555 and Schedule 1 but not Form 1040 which was an agreeable arithmetic check that it all comes out in the wash anyway. It really is worth repeatedly checking these forms over carefully before submission, especially as expats are rather more likely to be audited and our FinCEN Form 114 may look out of line with our IRS Form 1040. If I were to make a mistake now then I would risk carrying that wrong thinking forward to subsequent years. At some point, maybe henceforth, I will not see any further revisions that should be made. Separately, I notice that next year I shall have to file FATCA again.
There is an interesting but I think legitimate difference in how I am construing sole proprietor profit and loss from the points of view of the IRS and HMRC that arises in part from how each want currency converted to their own but do not require application of the daily exchange rate; of course currency risk arises as the markets shift in the weeks around invoice and receipt. As usual for this kind of thing I try to choose such that any small difference is likely to either be negligible or have us owe more tax: it is still small enough that the caution comes cheaply. From either side my approach feels defensible. It reminds me of when the Federal auditor would revise our American business' cost-based billing the difference was typically in our favor.
When our personal taxes were simpler and we used TurboTax, most years in reviewing the final output from it I would notice that it had made some error that their online chat folks could fix manually from their side. Also, on past occasions in paying professionals to do work for me, like when I last had a Will drawn up, when I review their work I typically discover some error that I have them correct. I doubt greatly that paying a professional the thousands of dollars they would charge to prepare our current taxes would be a good investment: what they have over me in knowledge and experience I would expect them to more than lack in time and care.
Why my past immigration and legal work has gone fine is probably that, cognizant of my limitations, where possible I avoid anything that may even seem to be an ambitious or unusual reach. For example, we could conceivably try to claim some office expenses on Schedule C or housing deduction on Form 2555 but it does not seem worth the complication. I am grateful that nothing I have submitted to the Federal Government has ever been enough challenged that I even needed to study the rules of evidence.
There is an interesting but I think legitimate difference in how I am construing sole proprietor profit and loss from the points of view of the IRS and HMRC that arises in part from how each want currency converted to their own but do not require application of the daily exchange rate; of course currency risk arises as the markets shift in the weeks around invoice and receipt. As usual for this kind of thing I try to choose such that any small difference is likely to either be negligible or have us owe more tax: it is still small enough that the caution comes cheaply. From either side my approach feels defensible. It reminds me of when the Federal auditor would revise our American business' cost-based billing the difference was typically in our favor.
When our personal taxes were simpler and we used TurboTax, most years in reviewing the final output from it I would notice that it had made some error that their online chat folks could fix manually from their side. Also, on past occasions in paying professionals to do work for me, like when I last had a Will drawn up, when I review their work I typically discover some error that I have them correct. I doubt greatly that paying a professional the thousands of dollars they would charge to prepare our current taxes would be a good investment: what they have over me in knowledge and experience I would expect them to more than lack in time and care.
Why my past immigration and legal work has gone fine is probably that, cognizant of my limitations, where possible I avoid anything that may even seem to be an ambitious or unusual reach. For example, we could conceivably try to claim some office expenses on Schedule C or housing deduction on Form 2555 but it does not seem worth the complication. I am grateful that nothing I have submitted to the Federal Government has ever been enough challenged that I even needed to study the rules of evidence.