Thanks for this! I didn't even think about the vehicle registration aspect. Do you know if there's a specific timeframe I need to update those within? And for the moving expenses, does it matter that my company reimbursed part of my moving costs?

Most states require you to update your vehicle registration and license within 30-90 days of establishing residency. Colorado specifically requires it within 90 days of becoming a resident, and they're pretty strict about enforcing it. For moving expenses, if your employer reimbursed you, those reimbursed expenses wouldn't be deductible since you didn't actually incur the cost. However, any unreimbursed moving expenses might qualify for the Colorado deduction. Keep all documentation showing what you paid personally versus what was reimbursed, and definitely mention this to your tax preparer or input it carefully if you're using tax software.

Did you use a tax professional or were you able to figure it out yourself with tax software? I'm trying to decide if my situation is complicated enough to justify hiring someone.

Thanks for this warning! This is making me rethink our plan. Maybe instead of claiming 100%, we should just track the mileage super carefully and go with the actual percentage. I definitely don't want to deal with an audit. Do you know if we need to keep paper logs or if the delivery apps' records are enough proof?

The delivery apps aren't enough for the IRS if you get audited. You need a detailed mileage log showing starting and ending odometer readings for each delivery shift, dates, and business purpose. There are some good apps like MileIQ or Stride that make it easier. Also don't forget you can deduct more than just the car itself! Hot bags, phone mounts, portion of phone bill, extra car chargers - all that stuff is 100% deductible separately from your vehicle expenses. I even deduct part of my Spotify since I play music during deliveries lol.

That's somewhat misleading. Most food delivery people aren't driving vehicles over 6000 lbs - that's like a large SUV or truck. For regular cars, the Section 179 deduction is capped MUCH lower - around $19,200 for 2024 I believe. And remember you can't claim more in deductions than you earn from your delivery work!

You're right - I should have been clearer about the weight limitations. For most standard cars used for food delivery, there are lower caps on Section 179. For 2024, passenger vehicles are limited to around $19,200 for the first year if they weigh less than 6,000 lbs. And you made another great point - your total deductions can't exceed your business income, so if you're just starting out in delivery, you might not have enough income to take advantage of the full deduction in year one. Any unused portion can be carried forward to future years though!

Thanks, this makes the situation much clearer. I think I've been confusing my personal tax status with my business obligations. The business income seems to be taxable in the US regardless of how long I was physically present. So I guess I'll have to file in both countries and hope the tax treaty helps avoid double taxation?

Yes, you've got it right. You'll need to file tax returns in both countries. The US return will report your US-sourced LLC income, and your home country return will typically include your worldwide income. Most tax treaties have provisions to prevent double taxation through foreign tax credits. This means you can usually claim a credit on your home country tax return for taxes paid to the US on the same income. This doesn't eliminate your need to file and pay in both places, but it should prevent you from being taxed twice on the same money. I'd recommend working with a tax professional who specializes in international taxation to make sure you're applying the treaty provisions correctly.

This is a really good point about the student visa. I had a similar situation and made the mistake of filing jointly which resulted in being taxed on worldwide income. Definitely consider filing separately if you're both non-residents!

What accounting software would you recommend for someone just starting out? I'm in a similar situation with a small side business and terrible bookkeeping habits.

For someone just starting out, I'd recommend something simple like Wave (which is free) or QuickBooks Self-Employed. Both let you connect your personal accounts but categorize transactions as business or personal. Wave is completely free for invoicing and accounting (they make money on payment processing), while QuickBooks Self-Employed costs a bit but has more features for tracking mileage and estimating quarterly taxes. The key is just to pick something and start using it consistently. Even a well-maintained spreadsheet is better than nothing. If your business grows, you can always upgrade to more comprehensive software later. The important thing is separating business from personal transactions so you can easily report your income and deductions at tax time.

Nope! You only pay taxes on your profits. If you bought something for $100 and sold it for $75, that's actually a $25 loss that would reduce your overall taxable business income. This is why keeping good records is so important - you want to track both the winners and losers in your inventory to accurately calculate your true profit.

Thank you! That's a huge relief. I was worried I'd have to pay taxes on every sale regardless of whether I made money. Good to know the losses can offset the gains. I'll definitely be keeping better records of my purchase prices from now on.

That's actually a really good idea. I didn't consider Costco might take it back since I installed it. I'll give them a call tomorrow and see what they say. Did you return yours to the store or did you have to call their customer service line first?

I just took it back to the store with my receipt. The person at the return counter didn't even ask any questions, just processed the return right away. Costco's return policy is pretty great for most things. Just make sure you bring the original packaging with everything that came in the box, even if it's been opened.

Does FreeTaxUSA handle K-1 forms and rental properties well? I've been using TurboTax Home & Business for years but the price keeps going up every year. Worried about switching and missing deductions though.