Don't forget you'll need to track personal vs business mileage separately! The IRS is really picky about this. If you use the same vehicle for both, make sure your Excel sheet clearly distinguishes which trips are for business. Learned this the hard way when I got audited last year over my mileage deductions for my courier service.

This is really helpful info! I'm in a similar situation with consistent routes. One thing I'd add - if you're using Excel, consider adding a column for your vehicle's odometer reading at the start and end of each business day. Even though it's not strictly required by the IRS, it creates a paper trail that shows your total business vs personal mileage split, which can be super valuable if you ever get audited. I learned this from my accountant after she saw how many business miles I was claiming compared to my total annual mileage. Having those odometer readings makes it crystal clear that your business use percentage is legitimate.

Quick question for anyone who knows - would establishing a Hungarian company change the tax situation at all? Like if I set up a Hungarian LLC equivalent and have my income go there instead of directly to me?

I went through a similar situation when the US-South Africa tax treaty was modified a few years back. One thing that really helped me was keeping detailed records of all taxes paid to both countries - it makes claiming Foreign Tax Credits much smoother. Also, don't overlook the potential impact on your state taxes if you're still considered a US resident for state purposes. Some states don't recognize foreign tax credits the same way the federal government does, which could create an additional layer of taxation. For what it's worth, I found that even without full treaty protection, the combination of FEIE and Foreign Tax Credits still prevented true double taxation on my earned income. The bigger headaches came from investment income and retirement account distributions, as others have mentioned. One practical tip: consider timing your move to align with tax year planning. If you can establish Hungarian tax residency early in a calendar year, it gives you more flexibility in how you structure your income for both countries' tax purposes.

I found a workaround in TaxAct that might help. When you import your crypto via CSV, check if the airdrop is already included with the proper cost basis. If it is, you can skip the separate airdrop section. To verify: look at the transaction detail after import. If your airdrop shows a cost basis equal to its value when received, and that same amount is included in your income elsewhere in your tax return, you're good. If the cost basis is showing as $0, then you need to either fix your CSV or use the separate airdrop section.

Thanks for all the helpful advice everyone! I ended up calling the IRS using Claimyr after reading about it here, and the agent confirmed what Zara said - I do need to report both the airdrop as income ($750) AND the capital gain from selling it ($150). The agent also mentioned that TaxAct should handle this properly if I use both sections correctly. For the airdrop section, I'll report the $750 as "Other Income" when I received it. For the CSV upload, I need to make sure my cost basis is set to $750 (not $0) so the capital gain calculation is correct. One thing the IRS agent emphasized that I hadn't thought about - keep really good records of the exact date and fair market value when you receive airdrops. She said they're seeing a lot of amended returns because people are using the wrong dates or values. Going to be much more careful about this going forward!

One thing to consider is that the IRS allows you to use different inventory accounting methods for tax purposes like FIFO, LIFO, or specific identification. For a reseller with unique items (not identical products), specific identification usually makes the most sense. This means each item you purchase for resale has its own tracked cost basis. So in your example, the $12 sweater sold for $65 would be $53 profit, and the personal $60 sweater sold for $15 would technically be a $45 personal loss (not deductible against business income).

This is such a common challenge for resellers! I've been dealing with similar issues in my own small business. One thing that really helped me was creating a clear separation between "business purchases" and "personal items that later get sold." For business purchases, I maintain detailed records from day one - photos, receipts, storage location, listing attempts, etc. These clearly qualify for COGS treatment when sold or charitable deduction when donated unsold. For personal items that later get sold, I treat them completely separately. Like your $60 sweater example - that's a personal asset sale, not business inventory. The loss isn't deductible, but it also doesn't get mixed up with your business accounting. The gray area items (bought for business but used personally first) are the trickiest. I've found the best approach is to "convert" them out of inventory when you start personal use, then treat any later sale as personal. Document the conversion with a note about fair market value at the time. For damaged items like your laptop, if it was personal property, selling for parts is still a personal transaction. But this is where having that clear intent documentation from purchase really matters - it establishes whether something was ever business property to begin with. The key is consistency in your method and keeping contemporaneous records of your intent. Don't try to retroactively categorize things based on what's most tax-advantageous!

Here's the detailed breakdown of what you need to do: First, use taxr.ai to get a complete analysis of your transcript and see exactly what the IRS is seeing. It's literally $1 and will save you so much time trying to decode IRS notices. Then: 1. Contact CashApp support to fix account type 2. Get documentation of the error 3. File Form 1040-X 4. Include explanation letter 5. Attach all supporting docs I do tax resolution and see this ALL the time. Don't panic - its fixable!

I went through this exact same nightmare last year! CashApp randomly switched my account to business and I had no idea until I got hit with IRS letters. What worked for me was getting a tax professional to help with the amended return - they knew exactly what documentation to include. Also make sure you get a corrected 1099 from CashApp if possible. The whole process took about 4 months but I got it resolved without any penalties. Don't give up!