Do you know if establishing proper "economic substance" requires a physical presence in the Cayman Islands? Or would hiring local directors and maintaining an actual office there be sufficient?

Proper economic substance typically requires more than just a local address and hired directors. The Cayman Islands themselves have economic substance requirements that include things like adequate physical presence, locally-managed bank accounts, local employees, and appropriate local expenditure relative to the level of activity. The key issue in your specific case though is that if you're physically sitting in New York making the trading decisions and executing trades, it's going to be very difficult to argue that the economic activity isn't occurring in the US. The IRS looks at where the value-creating activity is actually happening, not just where the paperwork says it's happening.

You're right - there is no tax treaty between the US and Cayman Islands, which actually makes things more complicated. Without a treaty, there are fewer protections against double taxation and fewer clearly defined rules. Also, as a US-based trader (even temporarily), FATCA reporting kicks in at $50K for foreign accounts, and the OP mentioned potentially making $135K+ which would definitely trigger those thresholds.

I never even thought about that. Is it possible I missed out on refunds from my self-employment years too? I definitely had some business expenses that I'm guessing would have been deductible.

Yes, it's entirely possible you could have qualified for refunds during your self-employment years too. As a self-employed plumber, you likely had significant business expenses that would have been deductible - tools, supplies, vehicle expenses, mileage, possibly even a portion of your phone bill or home expenses if you used them for business purposes. The unfortunate reality is that if those potential refunds were from more than 3 years ago, they're likely forfeited. However, this is even more reason to get current with your tax filing - you might be leaving money on the table for more recent years, and you'll want to properly claim your legitimate business deductions going forward.

This is such an important point! I couldn't qualify for an apartment I wanted because I couldn't provide tax returns. Also had issues with my car loan application. Being off the tax grid causes so many unexpected problems.

I have some experience with this. Indian REITs are still relatively new but from a US tax perspective, they don't get the same favorable treatment as US REITs. The distributions get taxed as ordinary dividends without the partial return-of-capital treatment that US REITs often have. Also, you'll face additional reporting requirements on Form 8621 if the Indian REIT is considered a PFIC, which many foreign investment structures are. This can result in much more complex tax filing.

Thanks for the explanation about the taxation differences. That's really helpful to know about the ordinary dividend treatment without the return-of-capital benefits. So it sounds like from a tax efficiency standpoint, I might be better off sticking with US REITs or finding a US-based ETF that gives exposure to the Indian real estate market rather than directly investing in Indian REITs. The Form 8621 filing requirement sounds like a headache I'd rather avoid.

TurboTax can handle the basic foreign tax forms like 1116, but I found it struggles with more complex situations involving PFICs and multiple types of foreign income. I switched to using a CPA who specializes in international taxation after TurboTax kept giving me errors for my Indian stock investments.

If I choose actual expenses the first year, can I switch to standard mileage the next year if that works out better? Or am I locked into one method?

If you use the standard mileage rate the first year you use the car for business, you can switch between methods in subsequent years. However, if you use actual expenses the first year, you're locked into that method for the life of that vehicle for business purposes. That's why many tax professionals recommend using standard mileage the first year even if actual expenses might be slightly better - it preserves your flexibility to switch methods later if your situation changes. Once you choose actual expenses initially, you can't go back to standard mileage for that same vehicle.

Thanks for pointing this out! Do you know if driving to pick up prescriptions counts as medical mileage?

That's interesting - I thought state income taxes were allocated based on who paid them? Like if it came out of your paycheck, it's your deduction. Can you really just decide how to split them?

You're right that generally withholding is tied to each spouse's earnings. What I was referring to is that in community property states like California, income (and the taxes paid on that income) is considered equally owned by both spouses regardless of who earned it. So in states like CA, WA, TX, etc., you have more flexibility in how certain deductions are allocated when filing MFS. But you're absolutely correct that in non-community property states, you can only deduct the state taxes you personally paid.

This is a hugely important point that a lot of people miss. I live in NJ where property taxes alone can exceed the SALT cap, so the mortgage interest deduction becomes the main factor in whether itemizing makes sense.

Is the SALT cap different for MFJ vs MFS? Like if we file jointly do we get the full $10k, but separately we each only get $5k?