Adding to what others have said - I went through this exact decision last year for my jewelry business. Started with just the free EIN from IRS.gov as a sole proprietor and it worked perfectly for getting set up on Etsy, Amazon, and even my Square account. The IRS online application literally takes 10 minutes and you get your EIN instantly. No need to pay $425 for an LLC unless you specifically want the liability protection or plan to have employees soon. One tip: when you apply for the EIN, make sure you select "sole proprietorship" as your business type if you're not forming an LLC. The application will ask for your business name - you can just use your legal name or "Your Name DBA [Business Name]" if you want to use a different business name. You can always upgrade to an LLC later if your business grows and the liability protection becomes worth the cost. I'm actually considering it now that my revenue has grown substantially, but starting with just the EIN saved me money in those crucial first months when every dollar counted.

Just went through this exact process for my woodworking business! You definitely don't need an LLC to get an EIN - I got mine directly from the IRS website in about 15 minutes completely free. The key thing to understand is that platforms like Etsy and Amazon are asking for an EIN for tax reporting purposes, not because you need to be incorporated. As a sole proprietor, you can get an EIN and use it instead of giving out your SSN to every platform and vendor. I started with just the free EIN and have been operating successfully for 8 months now. The liability protection of an LLC is nice to have, but for most craft businesses just starting out, the $425+ cost isn't justified until you're making consistent profit. My recommendation: Get the free EIN from IRS.gov now so you can start selling on those platforms. Once your business is generating steady income (maybe $20K+ annually), then revisit whether the LLC makes financial sense for liability protection and potential tax benefits. You can always form an LLC later and transfer your EIN to it - the IRS allows you to change the business structure associated with your EIN if needed.

Quick question for anyone using OLT for non-resident filing - does it handle multiple 1099s? I have one from Robinhood, one from Webull, and another from TD Ameritrade (all with different wash sales and dividends). Wondering if I need to combine these somehow or if the software can handle multiple investment accounts.

As someone who's navigated the non-resident alien tax maze with investment income, I feel your pain! Here are a few additional tips that might help: 1. **Double-check your substantial presence test** - Make sure you actually qualify as a non-resident alien for tax purposes. Sometimes students think they're non-resident when they might actually be resident aliens for tax purposes after being in the US for multiple years. 2. **Consider the treaty benefits** - Depending on your home country, there might be tax treaty provisions that could reduce your tax liability on investment income. Check if your country has a tax treaty with the US. 3. **Keep detailed records** - Document all your trades, especially the wash sale transactions. The IRS may ask for supporting documentation, and having everything organized will save you headaches later. 4. **State tax considerations** - Some states don't tax non-resident investment income at all, while others have different rules than federal. Research your specific state's requirements. The Free File options mentioned above are definitely worth trying first given your budget constraints. If those don't work out, you might also check if your university's international student services office has any tax preparation assistance or recommendations for affordable services that specialize in non-resident returns. Good luck with your filing!

I was struggling with the exact same issue last month! My foreign tax was around $720 across multiple brokerages. I ended up taking the credit and using Form 1116. It was definitely more work but saved me about $180 compared to taking the deduction. One thing to note - you can carryover unused foreign tax credits to future years (up to 10 years), but you can't do that with deductions. So even if the credit calculation is a little more complex, it usually pays off in the long run.

Yes, you can absolutely carry over unused foreign tax credits! This is one of the biggest advantages of taking the credit over the deduction. If your foreign tax credit exceeds your U.S. tax liability on foreign income in any given year, you can carry the unused portion forward for up to 10 years. TurboTax does track this automatically if you use the same account and import your prior year return. It will show any carryover amounts when you get to the Form 1116 section. However, if you switch tax software or preparers, make sure to manually enter any carryover amounts from your previous year's Form 1116. This carryover feature is especially valuable for people with fluctuating foreign income or those who have years with lower U.S. tax liability. I've seen cases where someone couldn't use their full foreign tax credit one year but was able to apply the carryover in subsequent years when their tax situation changed. Just another reason why the credit is almost always better than the deduction for investment accounts!

One thing nobody has mentioned yet is that regardless of which state you choose, you'll need to be aware of "foreign qualification" requirements. If you're "doing business" in a state other than where your LLC is formed, you technically need to register as a foreign entity there. The definition of "doing business" varies by state, but generally includes having employees, office space, or conducting in-person services in that state. As an expat with an online business, this probably won't affect you if you truly have no physical presence in any state. But something to keep in mind if your situation changes!

Great question! I went through this exact process about 18 months ago as an expat living in Germany. After a lot of research, I ended up choosing Delaware for my LLC, even though I had no prior connection there. Here's what I learned: Delaware has excellent legal precedent for business law, reasonable fees ($90 annual franchise tax for most small LLCs), and their Court of Chancery is specifically designed for business disputes. While states like Wyoming and Nevada get a lot of attention for zero state income tax, Delaware's legal framework is incredibly well-established. The key thing is that as an expat, you'll be paying federal taxes regardless of which state you choose, and since you're using FEIE, the state income tax differences matter less than they would for a US resident. What matters more is ease of maintenance, legal protections, and banking relationships. I used a registered agent service in Delaware for about $150/year and was able to open a business account with Chase online using my EIN and passport. The whole process took about 3 weeks from start to finish. One tip: make sure you understand the difference between your LLC's state of formation and where you'll actually owe taxes. As an expat with FEIE, your federal tax situation is more complex than the state choice.

Quick question - I'm in a similar situation but I'll be renting my house for 3 years while I'm working abroad. Do the same deduction rules apply for longer rental periods? Anyone know if there are different considerations for longer-term rentals?

One thing I'd add that hasn't been mentioned - make sure you're keeping detailed records of everything! The IRS loves documentation for rental properties. I learned this the hard way during an audit a few years back. Create separate folders (physical or digital) for each type of expense: repairs, maintenance, insurance, property management, etc. Take photos of any work done on the property with timestamps. Keep all receipts, even small ones like supplies from Home Depot. Also, since you're planning to move back in March 2025, start a calendar now marking the exact dates the property was available for rent vs. when you lived there. This becomes crucial for prorating expenses and will save you headaches later when preparing your taxes. The depreciation everyone mentioned is huge - don't skip it! Even if you don't claim it, the IRS assumes you did for recapture purposes when you eventually sell. So you might as well get the tax benefit now.