Can you explain what a "qualifying or disqualifying disposition" means? The tax document they sent me does mention something about a "disqualifying disposition" but doesn't explain what that means.

A qualifying disposition means you held the ESPP shares for both: 1) at least 1 year after the purchase date, and 2) at least 2 years after the offering date (when the purchase period began). If you meet both holding periods, you get more favorable tax treatment. A disqualifying disposition means you sold before meeting either of those holding periods. In that case, the entire discount gets taxed as ordinary income. It's strange they're mentioning "disqualifying disposition" if you haven't sold yet. That term typically only applies when you actually sell the shares. This reinforces my suspicion that there's a communication problem or misunderstanding with your benefits department. I'd specifically ask them why they're referencing a disqualifying disposition when you still hold the shares.

This is an excellent point. My company does something similar - they provide an optional tax withholding program for equity compensation. They calculate the projected tax impact and let us choose whether to have extra withholding throughout the year. It's actually really helpful for cash flow management.

Thanks for this info! What do you mean by "paper entity" and the nexus issue? Our company is registered in Wyoming, has a registered agent there, and a US bank account, but all actual operations (including me as the owner/operator) are in China. Could this cause problems?

The "nexus" issue refers to where your business has sufficient presence or connection for tax purposes. If all actual business activities (management, operations, inventory) are in China, the IRS could potentially view the business as a foreign entity despite the US registration. This could work both ways. If determined to be a foreign entity, you might only need to report US-sourced income to the IRS, potentially reducing your tax burden. However, it could also trigger complex reporting requirements like Form 5471 for foreign corporations. To strengthen your US nexus, consider: maintaining a US phone number, having some business activities conducted in the US (even if remotely), using US-based services, and clearly documenting the business purpose of your US entity. Having just a registered agent and bank account might be seen as insufficient to establish true US operations.

Actually, this information isn't quite right. The $600 threshold was supposed to take effect for 2023 taxes (filing in 2024), but the IRS delayed it. They've announced another delay for the 2024 tax year too. So the $20,000 AND 200 transactions threshold is still in effect for both years. I just want to make sure nobody's confused when filing!

All the rent payments came directly from my personal checking account. My fiance and I keep our finances completely separate for now - they pay for utilities and groceries, I cover the rent. So there's a clear paper trail that I'm the only one who paid rent. I hear what you're saying about it maybe not being worth fighting since we're getting married soon, but we're filing separately this year and potentially leaving several hundred dollars on the table with this incorrect CRP. My state has a pretty generous rent credit program.

In that case, you definitely have solid grounds to get this corrected. Since you have a clear paper trail showing you made 100% of the payments from your personal account, the CRP should reflect that. Several hundred dollars is absolutely worth pursuing. I'd recommend following the advice others have given about submitting a dispute. Make sure to include bank statements showing the payments came from your account, and be persistent with your landlord - they should want to avoid potential issues with the tax authorities by providing accurate documentation.

Minnesota resident here - your landlord is not correct. The MN Department of Revenue is very clear that CRPs should reflect who actually paid the rent, not just who was on the lease. I had this issue two years ago and ended up calling the MN DOR directly. They told me to file Form M-1PR with an explanation and my payment proof. Got my full refund about 6 weeks later.

Generally, service income from foreign corporations doesn't automatically trigger Subpart F unless it meets specific criteria (like services performed for a related party or services performed outside the country of incorporation). If your service income doesn't meet the Subpart F criteria, then any retained earnings would potentially be subject to GILTI.

Do you think the simplified method is better then? I'm about to buy my first home and plan to use about 15% for my freelance design business. Is it worth the hassle of tracking everything or should I just go with the $5 per square foot option?

It really depends on your specific situation. The simplified method is definitely easier - you just multiply $5 by your office square footage (up to 300 sq ft maximum). No need to track individual expenses or calculate percentages. For your 15% situation, do some quick math. If your home is expensive and/or in a high-cost area with high utilities and property taxes, the regular method might save you more money. For example, if your annual housing costs (mortgage interest, property taxes, utilities, insurance, repairs) total $24,000, 15% would be $3,600 in deductions. Compare that to simplified: if your office is 225 sq ft (15% of a 1,500 sq ft home), that's only $1,125 in deductions (225 × $5).

Yes, you can deduct the business percentage of mortgage insurance premiums (PMI) as part of your home office deduction if you're self-employed and using the regular method. So if your office takes up 10% of your home, you can deduct 10% of your PMI payments. Just be aware that PMI deductibility for personal taxes (the other 90% in this example) has changed several times in recent years, so check the current year's rules for that portion.