Is the QBI deduction automatic or do you have to do something special to claim it? I've been selling custom t-shirts online and made about $12k last year but my tax software never mentioned this.

It's not automatic - you need to specifically claim it on your tax return. Many basic tax software packages don't prominently feature it or explain it well. You should definitely look into it for your t-shirt business! With $12k in side hustle income, assuming reasonable expenses, you could potentially save hundreds in taxes. The deduction is calculated on your net profit (after expenses), not gross income. The calculation can get complex if your total income is above certain thresholds, but for most side hustlers making under $170k (single) or $340k (married), it's pretty straightforward - 20% of your net business income.

Yes, it's legit but be careful. I used this for my real estate side business last year with a Ford Explorer. The vehicle MUST be used more than 50% for business purposes, and you need to document that usage carefully. Also, they've reduced the bonus depreciation for 2023 (it was 100%, now it's 80% and decreasing by 20% each year). Make sure your side hustle income is substantial enough to justify this - the IRS does flag returns with large vehicle deductions relative to business income.

Does anyone know if minivans like the Toyota Sienna or Honda Odyssey qualify? They have tons of cargo space but I'm not sure about the weight requirements.

Most minivans don't qualify for the heavy vehicle Section 179 deduction because they typically have a GVWR under 6,000 pounds. The Toyota Sienna has a GVWR around 5,500-5,600 pounds, and the Honda Odyssey is similar. You need to look for vehicles specifically marketed as trucks or SUVs with a GVWR over 6,000 pounds. Even then, make sure the vehicle is primarily used for business (>50%) and keep detailed mileage logs. Also, the business usage percentage in the first year determines how much of the purchase price you can deduct under Section 179.

The 2023 limit for SUVs is $28,900, but you can still take bonus depreciation on the remaining amount, so you might still be able to deduct most of the purchase price in year 1 depending on your situation.

I didn't even think about that! Do you know if I can have both a Simple IRA through my employer AND contribute to a separate Traditional IRA? Is there any impact to the deductibility of Traditional IRA contributions if you also have a workplace retirement plan?

You can definitely have both a Simple IRA and a Traditional or Roth IRA. However, being covered by a workplace retirement plan (like your Simple IRA) does affect the deductibility of Traditional IRA contributions based on your income. For 2023, if you're covered by a workplace plan, the deduction for Traditional IRA contributions starts to phase out at $73,000 for single filers and $116,000 for married filing jointly. If your income is above those thresholds, you might want to consider a Roth IRA instead (which has its own income limits) or a non-deductible Traditional IRA contribution that could potentially be converted to a Roth later (the "backdoor Roth" strategy).

My company does this too! We specifically asked about it a few years ago because several employees wanted to max out their retirement contributions, and now they just automatically process the last paycheck of the year earlier. It might be worth asking - the worst they can say is no.

That's a great idea! I just called my payroll department and asked about this. They said they normally don't change their schedule, but since there are several employees in my situation, they're going to bring it up with management to possibly process the final 2023 payroll on December 29th instead of waiting until January. Fingers crossed this works out - thanks for the suggestion!

Did they convert all your foreign currency amounts or did you have to do that yourself? And did you get asked for any kind of proof of the exchange rates you used?

I did the currency conversions myself using yearly average exchange rates from the Treasury Department's website. The auditor didn't ask for proof of the exchange rates I used, but I had included a note in my file explaining which conversion method I was using and why. If you're dealing with significant currency fluctuations, you might want to use monthly average rates instead of yearly, especially if that works in your favor. The key is being consistent and having a reasonable explanation for your method. They didn't scrutinize the actual conversion calculations much - they were more concerned with verifying the base expenses were legitimate.

Thanks for sharing this. So many of us expats are perfectionist rule-followers when it comes to taxes because we're already in such a weird situation filing from abroad. It's reassuring to hear that reasonable approaches are acceptable!

Any specific QuickBooks version you'd recommend? I've heard there are different options and I'm not sure which would be best for a small S-Corp with just me as the only employee right now.

I'd recommend QuickBooks Online Plus for S-Corps rather than the Self-Employed version. The Self-Employed version is great for simple sole proprietorships but doesn't handle the complexity of S-Corps well. The Plus version lets you track inventory if needed and has better reporting features for corporations. Most importantly, the Plus version connects with payroll services which you absolutely need as an S-Corp owner to properly pay yourself that required "reasonable salary" through W-2 payroll. I use QuickBooks Payroll alongside it which automatically calculates all the withholding and generates the quarterly 941s and annual W-2/W-3 forms. Trust me, trying to handle S-Corp payroll manually is a nightmare you don't want!

Same experience here. The business version of TurboTax doesn't explain the specific S-Corp requirements very well. I missed the whole thing about needing to file Form 1120-S by March 15th (NOT April 15th like personal returns) and got hit with penalties. Now I just hand everything to my accountant and it's worth every penny.