Can't reach IRS? Claimyr calls for you, so you don't have to wait on hold.
Claimyr is a pay-as-you-go service. We do not charge a recurring subscription.
Using Claimyr will:
- Connect you to a human agent at the IRS
- Skip the long phone menu
- Call the correct department
- Redial until on hold
- Forward a call to your phone with reduced hold time
- Give you free callbacks if the IRS drops your call
Ask the community...
- DO post questions about your issues.
- DO answer questions and support each other.
- DO post tips & tricks to help folks.
- DO NOT post call problems here - there is a support tab at the top for that :)
Join the conversation
Join the conversation
StarGazer101
Has anyone successfully used the foreign earned income exclusion while having both W-2 income in the US and a foreign business? I travel between US and Singapore for my business but also work remotely for a US company.
The foreign earned income exclusion mainly applies if you're physically present in the foreign country for 330 days in a 12-month period OR if you're a bona fide resident of the foreign country. Based on what you described, you probably don't qualify since you're splitting time. But you might qualify for partial exclusion or foreign tax credits depending on your specific situation.
Amina Diallo
Great question! I went through something similar with my consulting business in Germany. A few key points to add to what others have mentioned: 1. **Startup costs vs. operational expenses**: The IRS treats these differently. Your initial startup costs (permits, equipment, etc.) may need to be amortized over several years rather than deducted all at once. Only the first $5,000 in startup costs can be deducted immediately, with the rest spread over 15 years. 2. **Business vs. hobby classification**: Since you're losing money initially, make sure you can demonstrate this is a legitimate business and not a hobby. The IRS looks for profit motive - keep detailed business plans, market research, and documentation showing you're trying to make it profitable. 3. **Turkish tax implications**: Don't forget you'll likely owe taxes in Turkey too. Keep meticulous records because you may be able to claim Foreign Tax Credits on your US return to offset any Turkish taxes paid on the same income. 4. **Record keeping**: For foreign businesses, the IRS is extra scrutinous. Keep everything - receipts, bank statements, contracts, correspondence - and have English translations ready for anything in Turkish. The losses can indeed offset your W-2 income, but be prepared to justify every expense if audited. Consider working with a tax professional who has international experience - the rules are complex and the penalties for mistakes can be severe.
Join the conversation
Amina Bah
I've been a tax preparer for 15 years, and I see this question A LOT with small business owners. Here's what often gets missed: there's a difference between "writing off vehicle expenses" vs the actual tax benefit you receive. Let's break it down - if you rent from your LLC, yes the LLC can deduct expenses, but you're also creating rental INCOME for the LLC. Meanwhile, your personal rental payments aren't deductible. So you're essentially moving money from one pocket to another while creating potential audit flags. Instead, consider taking the standard mileage rate (67 cents per mile for 2024) for business miles on your personal vehicle. Much cleaner documentation and less scrutiny from the IRS. Just keep a detailed mileage log.
Would the Section 179 deduction come into play here? I've heard you can deduct the full cost of a vehicle for business in year 1 if it meets certain requirements. Would that be better than the mileage approach?
Amina Bah
ā¢The Section 179 deduction can be valuable, but it comes with significant limitations for vehicles. For passenger vehicles (including SUVs under 6,000 lbs), the first-year deduction is typically capped around $20,000, not the full vehicle cost. Vehicles over 6,000 lbs have higher limits, but you must use the vehicle at least 50% for business to claim Section 179. The mileage approach is generally simpler from a documentation standpoint. However, if you have a higher-cost vehicle with substantial business use, calculating actual expenses (depreciation, gas, insurance, repairs) might yield a larger deduction. The key is assessing your specific situation - including vehicle cost, expected business use percentage, and your comfort level with maintaining detailed records for several years.
Has anyone here used a lease instead of buying? My accountant suggested I have my business lease a vehicle, then the business could deduct the lease payments, and I would just pay personal use tax. Would this be cleaner than the rental arrangement?
I did this with my marketing company! Way cleaner for tax purposes. The business leases the vehicle and takes the deduction for the business portion of use. You just need to track personal vs business miles and pay for personal use (either reimburse the company or report it as compensation). Much less likely to trigger audit flags than renting from yourself.
Ava Williams
ā¢The lease approach is definitely cleaner from a compliance standpoint! I've been doing this with my consulting business for 2 years now. The key is establishing a clear policy for personal use reimbursement upfront. I calculate my personal miles monthly and either write a check to the business or add it to my W-2 as additional compensation. One thing to consider is that lease payments are generally fully deductible for the business portion (unlike depreciation limits on purchased vehicles), so you might get better tax benefits overall. Just make sure you're comfortable with the ongoing monthly commitment versus owning an asset. Also keep detailed mileage logs - the IRS loves auditing vehicle deductions regardless of the structure you choose.
Join the conversation
Ev Luca
Don't forget about life insurance as part of this! My parents set up an irrevocable life insurance trust (ILIT) to provide liquidity for estate taxes without the insurance proceeds themselves being subject to estate tax. Might be worth looking into.
That's interesting - how exactly does the life insurance trust work? Would the policy need to be purchased by the trust or can existing policies be transferred?
Ev Luca
ā¢Life insurance trusts (ILITs) can work with new or existing policies, but there are important timing considerations with existing policies. If your aunt transfers an existing policy to an ILIT and then passes away within three years, the insurance proceeds will still be included in her taxable estate (this is called the "three-year rule"). For new policies, the trust would apply for and own the policy from the start, avoiding the three-year rule. Your aunt would make annual gifts to the trust to cover premium payments. These gifts typically qualify for the annual gift tax exclusion ($18,000 per beneficiary in 2025) if structured with proper "Crummey powers" that give beneficiaries temporary withdrawal rights. The big advantage is that when structured correctly, the insurance proceeds aren't included in her taxable estate but are available to pay estate taxes, equalize inheritances among beneficiaries, or provide liquidity so other assets don't have to be sold quickly.
As someone who recently went through estate planning with my elderly father, I'd strongly recommend your aunt work with both an estate planning attorney AND a CPA who specializes in estate taxes. The interplay between federal estate tax, California state rules, and income tax implications is incredibly complex. One thing that caught my attention in your post is that your aunt's $6.8 million estate might actually benefit from some strategic gifting now while she's alive. She can give $18,000 per year to each beneficiary (you and your cousins) without any gift tax consequences, which gradually reduces her taxable estate. Over several years, this could bring her estate down further below the federal exemption threshold. Also, since she's 76, she should consider her health and longevity when choosing between revocable and irrevocable strategies. Irrevocable trusts offer better tax benefits but require giving up control permanently. At her age, a revocable trust might provide the right balance of flexibility and probate avoidance, especially since her estate is currently under the federal exemption. Don't rush into any decisions - this stuff is permanent once you sign the documents. Take time to understand all the options and their long-term implications for both your aunt and the beneficiaries.
Join the conversation
Uggh this is confusing... so if I get a $50 face cream to review on my shop account, I have to pay taxes on that $50 even if I would never buy that cream myself? What if I hate it and give it away to a friend? Still taxable?
Yes, it's still taxable even if you give it away. The IRS considers it compensation for your content creation services the moment you receive it. Think of it like this: if someone paid you $50 cash to review a product, then you spent that $50 on a face cream and gave it to a friend, you'd still have to pay taxes on that $50 income, right? The IRS sees this the same way.
This is exactly why I started keeping a detailed spreadsheet at the beginning of this tax year! I track every single item I receive - date, brand, product description, retail price (I screenshot the current selling price online), and whether I kept/used it or gave it away. The $1,800-2,000 you mentioned could result in a pretty significant tax bill if you're not prepared for it. At a 22% tax bracket, that's potentially $400-440 in additional taxes owed. I learned this the hard way last year when I got hit with a surprise bill because I hadn't set aside money for taxes on the "free" products. One tip that's helped me: I now set aside about 25-30% of the estimated value of products I receive into a separate savings account specifically for taxes. That way I'm not scrambling come tax time. Also consider making quarterly estimated payments if this income is substantial - the IRS doesn't like it when you owe too much at the end of the year without having paid throughout.
Ravi Gupta
Nobody's gonna mention that you're supposed to make quarterly estimated tax payments on self-employment income? I'm not saying the IRS is going to come after you for one year of small DoorDash income, but technically you should be making payments throughout the year, not just at tax time.
0 coins
GalacticGuru
ā¢Is that really necessary for such a small amount though? I made like $4000 on Instacart last year and just paid it all when I filed my taxes. Nobody told me about quarterly payments.
0 coins
Ravi Gupta
ā¢Technically yes, but practically speaking the IRS usually doesn't assess penalties for missed quarterly payments if it's your first year of self-employment or if the total tax due is small. The rule is that you need to pay at least 90% of your current year tax or 100% of your prior year tax through withholding or estimated payments to avoid the penalty. For someone making under $3000 from DoorDash with a total tax bill around $550, any penalty would be minimal even if it was assessed. But it's good to know for the future - if you continue doing gig work and your income increases, you should make quarterly estimated payments to avoid penalties later.
0 coins
Freya Pedersen
Just FYI - if this is your only income and it's under $12,950 (standard deduction for 2023), you won't owe any regular income tax, just self-employment tax. That's probably why your calculator showed around $550 - it's just the 15.3% SE tax. So don't stress about the income tax part.
0 coins
Paolo Conti
ā¢That actually makes me feel a bit better. So even without deductions, I'm only looking at owing the self-employment tax? And if I estimate my mileage and other expenses, that would reduce even that amount?
0 coins
Keisha Brown
ā¢Exactly! Since your DoorDash income is under the standard deduction, you're only dealing with self-employment tax (15.3% on net earnings). The good news is that business deductions like mileage, phone expenses, and other delivery-related costs reduce your net self-employment income, which directly reduces that $550 tax bill. Even a conservative mileage estimate could save you significant money. If you drove 2,000 miles for deliveries (which is pretty reasonable for $2,850 in earnings), that's about $1,300 in deductions at the current mileage rate, which would reduce your SE tax by around $200. Don't let perfect be the enemy of good - make reasonable estimates and file!
0 coins