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.

Did they give any timeline for potential changes? I'm wondering if I should delay some research initiatives to 2025 if there's a chance the rules might revert back to allowing immediate expensing.

They were very careful not to predict any specific timeline for legislative changes, noting that previous attempts to modify section 174 had stalled despite apparent bipartisan support. Their advice was to make business decisions based on current law rather than speculation about future changes. The speaker specifically cautioned against delaying legitimate business activities solely for tax purposes, pointing out that even if the law changes, there's no guarantee it would be retroactive or when exactly it would take effect. They emphasized that the business needs should drive research timing, with tax considerations being secondary.

The IRS has been gradually increasing enforcement in this area as the rules have been in effect for a few tax cycles now. Initially there was some leniency due to the significant change, but they're becoming more attentive to proper section 174 compliance.

Thanks for mentioning this! I double checked and my income is definitely well below that threshold (I wish I made that much lol). I'm making about $52,000 a year, so phaseout isn't the issue. Sounds like it's just the expiration of that temporary increase like others mentioned. Really hoping they bring back the higher amount!

That's not how taxes work. If you got different results, one of them calculated something wrong. The tax laws are the same regardless of which software you use. You might have entered something differently between the two programs. Different software doesn't give you access to different credits - you either qualify or you don't.

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.