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.

How much were the penalties? I have an LLC in Illinois too and I'm not sure if I filed correctly last year.

The penalties in Illinois were $100 for late filing plus the $75 annual report fee. So $175 total for a business that made exactly $0 that year. Pretty frustrating. The most annoying part is that the state filing deadlines often don't align with federal tax deadlines. In Illinois, the annual report is due by the first day of the LLC's anniversary month (when you formed it). So if you formed your LLC in March, your report is due by March 1st each year, regardless of tax filing extensions.

Banks generally only report interest income via 1099-INT if your account earned more than $10 in interest for the year. If your account had no activity and earned no interest (or less than $10), the bank typically doesn't report anything to the IRS about that account.

22 I use it every year for my seasonal business. It's definitely more work but WORTH IT if your income is lumpy. Instead of being required to pay equal amounts each quarter, you calculate based on what you've actually earned by the end of each quarter. My Q1 and Q2 payments are tiny, then Q3 and Q4 are massive when we hit our busy season. Your accountant is right that it's complicated though. You basically have to do a mini tax return for each quarter. I wouldn't try it without professional help the first time.

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.

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.