Thanks for this info! What do you mean by "paper entity" and the nexus issue? Our company is registered in Wyoming, has a registered agent there, and a US bank account, but all actual operations (including me as the owner/operator) are in China. Could this cause problems?

The "nexus" issue refers to where your business has sufficient presence or connection for tax purposes. If all actual business activities (management, operations, inventory) are in China, the IRS could potentially view the business as a foreign entity despite the US registration. This could work both ways. If determined to be a foreign entity, you might only need to report US-sourced income to the IRS, potentially reducing your tax burden. However, it could also trigger complex reporting requirements like Form 5471 for foreign corporations. To strengthen your US nexus, consider: maintaining a US phone number, having some business activities conducted in the US (even if remotely), using US-based services, and clearly documenting the business purpose of your US entity. Having just a registered agent and bank account might be seen as insufficient to establish true US operations.

Actually, this information isn't quite right. The $600 threshold was supposed to take effect for 2023 taxes (filing in 2024), but the IRS delayed it. They've announced another delay for the 2024 tax year too. So the $20,000 AND 200 transactions threshold is still in effect for both years. I just want to make sure nobody's confused when filing!

Thanks for this tip! Do you remember approximately how long it took to process both the tax return and ITIN renewal when you did it this way? I'm wondering if it delays the refund significantly.

When we did it this way, the whole process took about 11 weeks total - definitely longer than a regular tax return. Our refund was held until the ITIN was fully processed. If you're counting on getting your refund quickly, you might want to do the ITIN renewal separately before filing. I'd also add that the IRS sent us a letter about 4 weeks after filing to confirm they received the ITIN renewal application, which gave us some peace of mind during the wait.

You sent the original passport?? Isn't there any way around that? No way I'm sending my husband's original passport through the mail...

Can you explain what a "qualifying or disqualifying disposition" means? The tax document they sent me does mention something about a "disqualifying disposition" but doesn't explain what that means.

A qualifying disposition means you held the ESPP shares for both: 1) at least 1 year after the purchase date, and 2) at least 2 years after the offering date (when the purchase period began). If you meet both holding periods, you get more favorable tax treatment. A disqualifying disposition means you sold before meeting either of those holding periods. In that case, the entire discount gets taxed as ordinary income. It's strange they're mentioning "disqualifying disposition" if you haven't sold yet. That term typically only applies when you actually sell the shares. This reinforces my suspicion that there's a communication problem or misunderstanding with your benefits department. I'd specifically ask them why they're referencing a disqualifying disposition when you still hold the shares.

This is an excellent point. My company does something similar - they provide an optional tax withholding program for equity compensation. They calculate the projected tax impact and let us choose whether to have extra withholding throughout the year. It's actually really helpful for cash flow management.

All the rent payments came directly from my personal checking account. My fiance and I keep our finances completely separate for now - they pay for utilities and groceries, I cover the rent. So there's a clear paper trail that I'm the only one who paid rent. I hear what you're saying about it maybe not being worth fighting since we're getting married soon, but we're filing separately this year and potentially leaving several hundred dollars on the table with this incorrect CRP. My state has a pretty generous rent credit program.

In that case, you definitely have solid grounds to get this corrected. Since you have a clear paper trail showing you made 100% of the payments from your personal account, the CRP should reflect that. Several hundred dollars is absolutely worth pursuing. I'd recommend following the advice others have given about submitting a dispute. Make sure to include bank statements showing the payments came from your account, and be persistent with your landlord - they should want to avoid potential issues with the tax authorities by providing accurate documentation.

Minnesota resident here - your landlord is not correct. The MN Department of Revenue is very clear that CRPs should reflect who actually paid the rent, not just who was on the lease. I had this issue two years ago and ended up calling the MN DOR directly. They told me to file Form M-1PR with an explanation and my payment proof. Got my full refund about 6 weeks later.

I've heard about the S-Corp option but wasn't sure if my income was high enough to make it worth the extra paperwork and accounting costs. What's considered the breakeven point where it starts making sense financially?

The breakeven point varies depending on your specific situation and local costs, but generally around $40,000-60,000 in profit is where many tax professionals suggest considering it. At your $52,500 income level, you're in that range. The main calculation is comparing what you'll save in self-employment taxes versus the additional costs. You'll need to file Form 1120-S annually, likely pay for payroll services (roughly $50-100/month), and possibly higher accountant fees. Most people find it worthwhile when they can save at least $2,000 annually in taxes after covering these extra expenses.

The QBI deduction is amazing but gets complicated fast. I thought I didn't qualify but my tax person found a way to make it work by adjusting some of my expense categories. Ended up saving almost $2k last year!