One more thing to consider - state taxes! Depending on which state you last lived in, you might still be considered a resident for state tax purposes even while living abroad. Some states are SUPER aggressive about keeping you as a tax resident (looking at you, California and New York). Make sure you properly terminate your state residency before moving abroad. This usually means getting rid of state driver's license, voter registration, bank accounts, etc. I didn't do this properly when I moved to Singapore and ended up owing CA taxes for 2 years until I fixed my residency status!

This is such a helpful thread! I'm in a similar situation but working in Germany. One thing I'd add - make sure you understand the timing of when you can start claiming the Foreign Earned Income Exclusion. You need to qualify for either the bona fide residence test OR the physical presence test for the specific tax year you're claiming it. The physical presence test requires 330 full days outside the US in any 12-month period, but it doesn't have to align with the calendar year. So if you just moved to China, you might not qualify for the full exclusion in your first tax year depending on when you arrived. Also, Hugo, since you mentioned your income will be around $45,000 USD equivalent, you'll likely be able to exclude all of it under the FEIE (the limit is $120,000 for 2025). But definitely keep good records of your days in/out of the US and your Chinese tax payments just in case you need them later! The investment income advice from Nasira is spot on - those dividends and capital gains will still be taxable in the US regardless of the FEIE.

The real benefit for the Cayman Islands isn't just registration fees - it's the entire ecosystem they've built. Banking in the Caymans is a massive industry. They have around $1.5 trillion in banking assets and $1.8 trillion in securities. Those institutions need actual offices, actual employees, and support services. Plus, their tourism industry is intertwined with their financial status. Wealthy individuals who establish financial relationships there often visit, purchase property, and spend money in the local economy. Many conferences and financial events are hosted there too. The Caymans could implement small taxes, but the competition between tax havens is fierce. If they added even a 5% corporate tax, businesses would flee to other jurisdictions like the British Virgin Islands, Bermuda, or newer players. It's essentially a prisoners' dilemma - they'd all benefit from coordinated tax increases, but whoever maintains lower rates wins the business.

I researched this topic for a economics paper last year. One thing often overlooked is that the Cayman Islands collects significant indirect revenue through their work permit system. Foreign financial professionals working there pay hefty fees (sometimes $20k+ annually) for the right to work. Also, the Caymans have a 0% income tax for everyone - not just corporations or wealthy foreigners. This benefits local residents too, who enjoy no personal income tax. The government funds itself through import duties (which generate around 30% of government revenue), tourist taxes, and the various financial sector fees others have mentioned. Another factor: reputation matters. If they suddenly implemented taxes after decades of being a tax-free jurisdiction, it would seriously damage their credibility in the financial world. The damage to their reputation would likely far outweigh any short-term tax revenue gains.

Honestly just buy the gaming PC and save the grand. I've been audited twice for my small business and they've never once questioned the name of any equipment - only whether I could prove it was used for business. I have 3 "gaming" PCs that I use for video editing and 3D rendering. What matters is your records showing business use.

I completely agree with everyone saying the name doesn't matter - it's all about actual business use. I run a small consulting firm and bought what's technically a "gaming laptop" because it had the processing power I needed for data analysis at half the cost of business-branded alternatives. When I set it up in my accounting software, I just labeled it "Business Computer - Data Processing" and kept a simple log of work activities for the first couple months as documentation. Never had any issues, and the cost savings helped my bottom line significantly. The IRS is looking for legitimate business expenses, not policing marketing terminology. If you can demonstrate clear business purpose and maintain proper records, you're golden. Save the $1,000 and put it toward other business needs!

The depreciation recapture situation you're describing is definitely something to plan for carefully! One additional consideration that might help with your planning - if you're thinking about selling in the future, you could also look into whether there are any installment sale options available to you. With an installment sale, you can spread the recapture income over multiple years rather than taking the full hit in one tax year. This can be particularly helpful if the recapture would push you into a higher tax bracket. You'd still pay tax on the recaptured depreciation, but it might soften the blow by spreading it out. Also, since you mentioned this is for your construction company, make sure you're tracking the actual business use percentage accurately. If the vehicle ever drops below predominantly business use (below 50%), you could trigger some recapture even before selling, similar to what Victoria mentioned in her comment. Given the substantial amount of depreciation you took ($208k), I'd really recommend running some projections now for different sale scenarios and timeframes. That way you can budget for the tax impact and maybe time the sale strategically based on your other income in that year.

This is exactly the kind of complex tax situation where getting multiple perspectives is so valuable! I've been following this thread and learned a ton from everyone's experiences. One thing I'd add from my own experience with business vehicle depreciation - don't forget to factor in your state tax implications too. Some states have different rules for depreciation recapture, and in my case, my state actually had a lower recapture rate than federal, which helped offset some of the pain. Also, if you're in the construction industry like the original poster, you might want to consider the potential for "like-kind exchanges" if you're planning to replace this vehicle with another qualifying business vehicle. Even though the Tax Cuts and Jobs Act limited like-kind exchanges, there might still be some strategies available for business vehicles depending on your specific situation. The timing advice from Joshua and Evelyn is spot-on - I wish I had planned better when I sold my business truck last year. Ended up paying way more in taxes than I needed to because I sold during a high-income year. Live and learn! Setting aside money now for that future tax bill is definitely the smart move.

I've been working as a tax preparer for over 8 years and I see this pattern frequently with newly married couples. The issue is almost certainly related to your name change not being properly synced between Social Security Administration and IRS systems. Here's what likely happened: When you got married on January 15, 2024, if you changed your name, there's often a delay between when SSA updates their records and when that information flows to the IRS. The IRS automated systems flag returns where the name on the tax return doesn't exactly match what SSA has on file. My recommendation is to call SSA first at 1-800-772-1213 to verify they have your correct married name on file. If there's a discrepancy, get that fixed immediately. Then call the IRS back and specifically ask them to note in your file that you've updated your information with SSA. For future years, I always tell my married clients to wait at least 2-4 weeks after updating their name with SSA before filing their tax return. This simple step prevents the verification cycle from starting in the first place. The good news is that once this underlying mismatch is resolved, you shouldn't see these letters again. But you need to address the root cause rather than just waiting out the 120 days each year.

I've been following this thread with great interest because I'm experiencing something very similar - this is my second year getting these verification letters and I was starting to worry there was something seriously wrong with my returns. Based on all the helpful responses here, it sounds like the most common culprits are: • Name/SSN mismatches between employer records and SSA • Name changes from marriage not properly synced between SSA and IRS • Employer EIN discrepancies on W-2 forms • Certain income thresholds or expense amounts that trigger automatic reviews What I find most valuable about this discussion is that multiple people have shared the same experience - getting these letters for 2-3 consecutive years before finally identifying and fixing the root cause. It's reassuring to know this isn't necessarily an audit or indication of wrongdoing, just a frustrating bureaucratic issue that needs to be systematically addressed. I'm definitely going to follow Emma's advice about calling SSA first to verify my information, then checking with my employer's HR department. The suggestion about requesting tax transcripts to identify recurring transaction codes also seems really smart for understanding exactly why this keeps happening. Thanks to everyone who shared their experiences and solutions - this thread is going to save a lot of people from just passively waiting 120 days every year!