Good point about investment income! I do have a small amount of dividends (about $320) and some interest income (around $180) that I didn't include in my manual calculation. That definitely explains part of the difference. Do you know if student loan interest deduction reduces MAGI for the EV credit calculation? I paid about $900 in student loan interest last year.

Student loan interest is one of those deductions that gets added back when calculating MAGI for most tax credits, including the EV credit. So while it reduces your AGI, it doesn't reduce your MAGI for this purpose. So the $500 in investment income you mentioned plus adding back your IRA deduction and student loan interest deduction would explain why TurboTax is calculating a higher MAGI than you expected. It sounds like their calculation is likely correct based on everything you've shared.

I claimed it last year! The credit worked exactly as advertised. Just make sure the dealer provides the proper certification that the vehicle qualifies. Not all used EVs qualify - there are price limits ($25,000) and the vehicle can't be more than 2 years old from when you purchase it. Also, double check the VIN - some dealers will try to sell you a vehicle that's already had the credit claimed on it before (which would make it ineligible).

Thanks for the info! I didn't realize there was a $25,000 price cap on the vehicle itself. That definitely limits the options. Did you have any trouble with the MAGI calculation part when you filed?

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!