Is it different if you're in a golf-related business? I sell custom golf accessories and have display items in my office that are technically usable but mainly for showing clients.

For your situation it's completely different since those items directly relate to what you're selling. That's a clear business purpose - they're essentially product samples or demonstration items. You could likely deduct those as ordinary and necessary business expenses. In the original poster's consulting business that's unrelated to golf, it's harder to show a direct business purpose for an expensive putter beyond general office decor or client entertainment. That's where the documentation becomes more important to demonstrate regular business use.

Actually, Section 179 lets you deduct the full cost in year one rather than depreciating it - that's the whole point of the provision. But you're right that it would apply here if the putter qualifies as business equipment.

I haven't tried TaxAct. How's the pricing compared to TurboTax? And does it let you jump directly to Schedule C without going through personal info you've already entered a million times before?

The pricing is definitely better - usually about half what TurboTax charges for the same features. For 2023 tax year I paid $65 total for federal and state with business income, compared to around $140 with TurboTax. Yes, you can jump directly to Schedule C and other forms! They have a forms-based navigation option where you can select exactly what you want to work on. You still need to complete basic personal info once, but after that you can move freely between different sections without following their sequence. It's much more efficient if you know what you're doing.

I tried the PDF forms route but got nervous about math errors. Don't the software programs check calculations and look for red flags? I'm always worried I'll miss something and get audited.

Thanks for sharing your experience! Did you have any issues with the IRS questioning your Bona Fide Residence status since you were still in the US for almost half the year? And did you have to pay US taxes on the portion of your income earned while physically in the US?

I did initially get some questions from the IRS about my Bona Fide Residence status. What helped my case was having documentation showing I was paying taxes in Hungary, had a permanent residence there (rental agreement), maintained local bank accounts, and had community ties (memberships in local organizations). The key factor that seemed to satisfy them was that my life was clearly centered in Hungary, with US visits being temporary. Yes, I absolutely had to pay US taxes on income earned while physically working in the US, even though it was for my Hungarian employer. I tracked my work days by location and reported accordingly. I used a time-tracking app that logged my IP address to help document where I was working each day, which was helpful documentation.

Form 8833 isn't always required though. The instructions specifically say you don't need it for claiming foreign tax credits or the foreign earned income exclusion. You only need it for treaty positions that aren't already covered by existing forms.

You're right about Form 8833 not being required for standard foreign tax credits or the FEIE. I should have been more specific - I was thinking about treaty-specific provisions that might help in a split residency situation, particularly the "tie-breaker" rules that determine which country has primary taxing rights when you're technically a resident of both. For example, if both the US and Poland consider you a tax resident under their respective domestic laws, the treaty's tie-breaker provisions would determine where your primary tax residence is. Claiming that type of treaty benefit typically does require Form 8833. This became relevant in my case because Germany considered me a tax resident based on my having an apartment there, even though I didn't meet the US FEIE requirements that year.

Does the 3-property rule require you to buy all 3 properties, or can you just pick one of them? Sorry if that's a dumb question, I'm new to 1031 exchanges.

Not a dumb question at all! With the 3-property rule, you can identify up to three potential replacement properties, but you only need to actually purchase one of them to complete your exchange. The rule just gives you options. You could identify your neighbor's property as your first choice, and then add two other viable properties as backups. As long as you acquire at least one of those identified properties within the 180-day completion period, your exchange will be valid. This approach gives you the flexibility to target the property you really want while having fallback options.

Was it still worth doing the exchange even though you had to settle for a property you weren't excited about? Did the tax savings justify it?

The ID.me verification is actually why I couldn't get my transcript online! They couldn't verify my phone for some reason and I got stuck in this endless loop. Has anyone found a workaround for the ID.me verification issues?

The ID.me system can definitely be frustrating. If you're having trouble with the automated verification, try their "video chat verification" option. It lets you speak with a human representative who can manually verify your identity. It takes longer (sometimes there's a waiting room), but it usually works when the automated system fails. Another option is to use the login.gov pathway instead of ID.me if it gives you that choice. Some people have better luck with one system versus the other.

It's not just you! The tax system in the US is deliberately complicated because tax prep companies lobby to keep it that way. Many other countries have simple tax filing systems where the government pre-fills your forms and you just verify them. But companies like H&R Block and TurboTax literally spend millions lobbying to prevent simplification because it would hurt their business model.

I had no idea about the lobbying thing, but it makes total sense. I lived in Sweden for a few years and filing taxes there took like 5 minutes - they sent me a pre-filled form and I just confirmed it was correct by text message. Coming back to the US tax system was a huge shock. I'm definitely going to be more careful about saving copies of everything from now on. Lesson learned the hard way!