What's a wash sale? Never heard of that rule before and I definitely bought some of the same stocks multiple times when they dipped.

A wash sale happens when you sell a security at a loss and then buy the same or a "substantially identical" security within 30 days before or after the sale date. When this happens, you can't immediately claim the loss for tax purposes - instead, the loss gets added to the cost basis of the replacement shares. This is definitely something that could affect your situation if you were frequently trading the same stocks. Many new traders get caught by this rule because it can make your tax situation much more complicated than simply adding up gains and losses. Your trading platform should mark wash sales on your tax documents, but they sometimes miss them, especially if you were trading similar securities across different platforms.

Thanks for sharing your experience! Did you just mail everything in or did you have to talk to someone on the phone? I'm dreading having to call them.

I started by mailing everything with delivery confirmation so I had proof they received it. When I didn't hear anything back after 6 weeks, I did have to call. Took about a dozen attempts over 3 days before I finally got through to a human. The person I talked to was actually pretty helpful - they found my documents in their system and said they were still in the queue for review. They added notes to my file about my call. About two weeks after that, I got a letter saying the issue was resolved and I didn't owe anything. So while calling sucked, it probably helped speed things up in the end.

But wouldn't it be weird to only charge for storage 14 days per year when the products are stored there all year round? Seems like it might raise red flags.

You're right that it might seem unusual to only charge for 14 days when the storage is ongoing, but that's actually how the Augusta rule works. Many business owners choose specific days throughout the year to "rent" their home to their business. You're essentially creating 14 individual rental events spread throughout the year. The key is proper documentation - having a written agreement specifying which days your home is being rented to the business, what spaces are included, and making sure the rental rate is comparable to market rates. This approach is completely legal as long as you stay within the 14-day limit and have the proper paperwork to support it.

Did you end up owing more taxes or just having to provide documentation? I'm always worried about making innocent mistakes that could turn into big problems.

That's a really good point about spreading it out. I think I'll do the 5 paycheck option since that would be way less disruptive to my monthly budget. Do you think I need to specifically ask HR about the state tax withholding or would they typically handle both?

Definitely ask HR specifically about state taxes. In my experience, some payroll systems don't automatically adjust state withholdings when federal is increased. Just tell them you want to make sure both federal AND state taxes are being withheld appropriately for the HRA payment. They should be able to handle that for you.

I don't think that's accurate. The taxes you pay are based on the tax year they're for, not when you pay them. So taxes for 2023 income always count toward 2023 SALT deduction regardless of when you actually pay them.

Thanks for mentioning this! I had no idea about tax treaties. Do you know if I would need to file any special forms to claim these treaty benefits? And would I still need to file the Schedule C even if there's a treaty?

You would need to file Form 8833 to claim treaty benefits, and yes, you would still need to file Schedule C to report your self-employment income. The treaty doesn't exempt you from filing requirements, it just might reduce what you owe. Tax treaties vary widely by country, so check the specific one between the US and Portugal. Some treaties have special provisions for teachers, students, and researchers, so you might qualify for reduced taxation on your teaching income. But you definitely need to document everything properly.

I second this. TurboTax walks you through everything step by step and they have really good support if you get stuck. It's not free but it's worth it for the peace of mind.

Can you revoke the MTM election in future years if your trading strategy changes? Or once you make it, you're stuck with it forever?

Once you make the MTM election, you're generally stuck with it unless you get IRS permission to revoke it, which requires showing a substantial change in your business circumstances (not just because it's no longer advantageous). The proper way to change is to file a request for an accounting method change using Form 3115. You'll need to demonstrate valid business reasons for the change beyond tax benefits. Simply deciding you don't like MTM anymore isn't sufficient. Many traders who want to revert end up creating a new entity for their trading activity instead of trying to revoke the election.

The main advantage for active traders isn't about realization (you're right that trades you complete are already realized) but about: 1. Business treatment vs. investment treatment - allowing you to deduct all trading-related expenses directly against your trading income 2. Bypassing the $3,000 capital loss limitation against ordinary income 3. No wash sale rules to track and manage For someone making hundreds of trades yearly, the business expense deductions alone can be significant - home office, computers, software, education, etc.