I hadn't thought about that approach! Do you know what kind of documentation I should include to explain my situation? And did your accountant face any pushback from the IRS on this?

For documentation, I included a signed statement explaining my travel circumstances, copies of my travel itinerary showing the brief nature of my absence, and evidence of my continued ties to the US (apartment lease, utility bills in my name that continued during my absence). My accountant said that for brief absences, especially around holidays or year boundaries, the IRS tends to be reasonable as long as you clearly document that your absence was temporary and that you maintained your US ties. He said he's filed returns this way for years for clients with international travel and never had an issue. The key is being transparent and providing clear documentation rather than trying to hide anything.

Most consumer tax software struggles with dual-status returns. I tried using TurboTax for mine last year and ended up having to abandon it and go to a CPA. The software just isn't designed to handle the complex forms and calculations needed for dual-status returns.

I had the same issue and found SprinTax was actually designed specifically for international/dual-status situations. It costs more than regular TurboTax but was worth it because it handled all the weird form combinations needed for dual-status returns. Still complex but at least it was possible to complete.

Do those limits apply to both Traditional and Roth 401k combined? Or can I do $23,000 in Traditional and another $23,000 in Roth? Also, does the employer match count toward the limit?

The $23,000 limit applies to your combined Traditional and Roth 401k contributions - it's a total limit for all your elective deferrals. So you can split it however you want between Traditional and Roth, but the total can't exceed $23,000 (or $30,500 if you're 50+). Good news though - employer matching contributions don't count toward this limit! They fall under a separate, much higher limit (the "415(c) limit") which is $69,000 for 2024. This higher limit includes all contributions to the plan (your elective deferrals plus employer contributions).

Code "E" actually means distribution under a QDRO (qualified domestic relations order), which is usually for divorce situations. For excess contributions, you should normally see code "P" for principal or code "8" for earnings on excess contributions. You might want to contact your plan administrator because they may have coded your 1099-R incorrectly.

Did you form an LLC or anything formal like that? Or were you just operating as a sole proprietor? I'm wondering if the business structure makes a difference in how the IRS views it.

I was just operating as a sole proprietor with a Schedule C. Having an LLC might look more "official" but the IRS cares more about how you actually operate than your formal business structure. It's your business practices that really matter - keeping separate finances, maintaining professional records, having a clear plan for profitability, marketing your services/products, etc. Those factors demonstrate business intent regardless of whether you've formed an LLC, corporation, or are operating as a sole proprietor. The IRS is primarily concerned with whether you have a genuine profit motive or are just trying to deduct personal expenses.

I used it last year. It asks questions about your profit motive and helps identify which expenses qualify. The interview format walks you through everything. It was pretty helpful for my side gig, caught some deductions I would've missed.

This is super helpful, thanks! How do I find the GIS system for my county? Is that something on the assessor website?

Most counties have a GIS portal or property search tool on their official website. Usually you can find it by searching "[your county name] property search" or "[your county name] GIS." Once you're in the system, you can usually click on parcels near your home to see their assessment values, square footage, and other details. Focus on homes with similar age, size, and features to yours. Print or save screenshots of properties that are comparable but assessed at lower values, as these make the strongest case for an appeal.

That's actually not a great idea. Withholding allowances are for income tax, not property tax. If you adjust those, you might end up with a big tax bill in April that you can't pay. Property tax increases are separate from income taxes.

3 Good point about retirement accounts! I'm an IC too and my Solo 401k saves me thousands in taxes each year. Question though - for meals, I thought the 50% limit was temporarily changed to 100% for 2021-2022? Has that gone back to 50% for 2023 returns?

23 Yes, the 100% business meal deduction was a temporary COVID relief measure for 2021 and 2022 only. For 2023 and beyond, we're back to the standard 50% deduction limit for most business meals. The key is proper documentation - not just the receipt but notes on the business purpose and who you were meeting with if it was a client meal. For solo meals while traveling for work, document which job you were working that required overnight travel. Digital receipt apps with note fields are lifesavers for audit protection.

4 Thank you for the practical advice! For the S-Corp, is it too late to set one up for this tax year? I've already been working as a sole proprietor for about 6 months. Also, what kind of costs should I expect for the initial S-Corp setup and ongoing maintenance?