You might consider implementing a quarterly dividend strategy alongside a reasonable base salary. This is what I do - I pay myself a consistent reasonable base that covers my actual work (based on market rates for my position), then distribute profits as needed through distributions. Remember that while S-Corp distributions aren't subject to self-employment tax, they ARE subject to income tax. And the IRS is very clear that you can't take distributions without a reasonable salary first.

The uncertainty you're facing is totally understandable - that's a massive potential revenue jump! Here's what I'd recommend based on going through something similar: Start with a conservative approach for Q1. Set your salary based on a blend of last year's performance plus modest growth expectations - maybe bump from $65k to around $75-80k to start. This keeps your fixed commitment manageable while acknowledging some growth. Then implement quarterly reviews. As you hit Q2 and Q3, if the revenue is materializing as projected, you can either: 1. Increase your base salary mid-year (requires payroll adjustments) 2. Pay yourself W-2 bonuses quarterly to catch up 3. Take the excess as distributions (though remember you need that reasonable salary first) The IRS doesn't expect you to predict the future perfectly, but they do expect you to make reasonable adjustments as circumstances change. Document everything - why you set the initial salary, what factors you considered for increases, and how you determined what's "reasonable" for your role and industry. Most importantly, focus on what you'd need to pay someone else to do your job, not on percentages of profit. Your duties might not change much even if revenue quadruples, so your salary shouldn't necessarily scale directly with profits.

Slighy off-topic but don't forget capital gains reporting for your crypto! Even if T1135 doesn't apply, you still need to track every single transaction for calculating capital gains/losses. CRA expects you to report: - Fair market value of crypto at time of purchase - Fair market value when sold/traded - Calculate gain/loss on each transaction - Apply 50% inclusion rate for capital gains I use Koinly to track all this stuff and it saves me tons of headaches at tax time.

Great question and excellent discussion here! I just want to reinforce what others have said about the T1135 requirements for crypto. The key distinction is WHERE your crypto is held, not what type of asset it is. Since your hardware wallet is physically located in Canada (in your home safe), the Bitcoin stored on it is considered Canadian property for tax purposes, regardless of the fact that Bitcoin itself is decentralized and not tied to any specific country. The $250K+ threshold for T1135 only applies to "specified foreign property" - and crypto on a hardware wallet in Canada doesn't qualify as foreign property. You're absolutely right to be cautious about CRA compliance, but in your situation, T1135 filing isn't required. However, do keep detailed records of your transactions and holdings as others have mentioned. The crypto tax landscape is still evolving, and good documentation will protect you if rules change or if you're ever audited. Also remember that while T1135 may not apply, you'll still need to report any capital gains when you eventually sell or trade your Bitcoin. Stay compliant and keep that hardware wallet secure!

Something else to consider - if you determine you're a resident alien for 2024, you'll need to report your WORLDWIDE income on your US tax return, not just US-source income. This is a big difference from the non-resident 1040-NR where you only report US income. Did you have any income from sources outside the US during 2024? Like investments, rental property, foreign bank interest, etc.? If so, that needs to be reported on your 1040. You might also need to file FBAR forms if you had foreign bank accounts with balances over $10,000.

I went through almost the exact same situation two years ago! Your substantial presence test calculation looks spot on. Since you were exempt as an F-1 student for 2019-2023, 2024 was indeed your first year counting days, and with 335 days you definitely crossed the 183-day threshold. One thing I'd add to what others have mentioned - make sure you keep really good records of your departure date and any documentation showing you've established residence elsewhere. The IRS sometimes questions these transitions, especially for people who were students for several years. Also, since you're now filing as a resident alien, you might be eligible for some tax benefits you couldn't claim as a non-resident - like the standard deduction and certain credits. It's not all bad news! Just make sure you're thorough about reporting worldwide income as others have mentioned.

This thread has been incredibly enlightening! I've been handling my small business taxes for years and never knew about this de minimis safe harbor election. It sounds like it could save a lot of small businesses significant time and potentially money. One thing I'd add for anyone considering this - make sure you understand the trade-offs. While you get the immediate deduction when you purchase inventory, you also lose the ability to spread those costs over multiple years as your inventory sells. This could potentially push you into a higher tax bracket in years when you make large inventory purchases. Also, if your business has seasonal fluctuations or you're planning any major expansions, the timing of when you claim these deductions could impact your overall tax strategy. It might be worth running the numbers both ways (traditional COGS vs. immediate expensing) for your specific situation before making the election. Has anyone here actually compared the total tax impact over multiple years between the two methods? I'm curious if the immediate deduction always comes out ahead or if there are scenarios where the traditional COGS method might be better.

This discussion has been incredibly helpful! I'm a CPA who works with a lot of small retail businesses, and I see so many clients struggling with inventory tracking when they could be using this simplified method. A few additional points for anyone considering this election: 1. Documentation is key - even though you're not tracking COGS, you still need to maintain records of your inventory purchases for the deduction. Keep all receipts and invoices organized. 2. The election applies to your entire business, not just certain types of inventory. So if your boutique sells both clothing and accessories, both categories would be treated the same way under this method. 3. Consider your state tax implications too. Most states conform to federal tax treatment, but some have different rules. Make sure to check how your state handles this election. 4. If you're planning to sell your business in the future, discuss with your accountant how this method might affect the valuation or sale terms, since your inventory won't be reflected as an asset on your books. The $27 million gross receipts test is quite generous for most small businesses, so this really is a game-changer for reducing administrative burden while potentially improving cash flow through earlier deductions.

Just FYI, if you're adjusting your W4 for a non-resident spouse with an ITIN, don't forget about state tax withholding too! You mentioned owing state taxes last year while getting a federal refund. Each state has different forms and requirements for withholding adjustments. Some states use the federal W4 info, but many have their own forms. Make sure you're adjusting both federal AND state withholding.

Great question about W4 withholding with a non-resident spouse! I went through this exact situation last year when my husband had an ITIN while waiting for his green card. Your calculation of $126 per paycheck sounds reasonable, and yes, that amount would go on line 4(c) of your W4. The key thing to remember is that you're essentially covering the tax liability for both your income and your wife's cash income through your withholding. A few additional tips from my experience: 1. Keep meticulous records of your wife's cash income (sounds like you're already doing this with your spreadsheet) - you'll need quarterly totals for accurate tax planning. 2. Consider making estimated quarterly payments instead of (or in addition to) increased withholding. Sometimes this gives you more control, especially if your wife's income varies significantly. 3. Once you know your wife's total annual income, you can use the IRS withholding calculator mid-year to see if you need to adjust your W4 again. 4. When her green card comes through, her tax status won't change dramatically for withholding purposes, but definitely recalculate everything since you'll have more certainty about the full year's income by then. The fact that you got a federal refund but owed state taxes suggests your federal withholding might have been close to right, so your new calculation should help balance things out better for 2025!