This is really helpful! The company classified me as an independent contractor (hence the 1099-NEC), but I'm wondering if the treaty might view it differently since I only work for this one company. How do I figure out if I'm considered an employee or contractor under the treaty specifically?

The treaty doesn't specifically define employee vs contractor, so it generally follows the classification principles of each country. The IRS looks at factors like behavioral control, financial control, and relationship of the parties. Since you only work for one company, that's a factor that could potentially point toward employment, but there are many other factors. Do they control when and how you work? Do you use your own equipment? Do you have the opportunity for profit or loss? These all matter for classification.

There is indeed a totalization agreement between the US and Canada! If you're paying into the Canadian social security system (CPP), you generally don't have to pay US self-employment taxes. You'll need to get a certificate of coverage from the Canadian authorities though.

Just checked my pay stub and it does say "Single" for filing status, but there's nothing about multiple jobs. I do max out my 401k ($22,500/year) and have an HSA that I put about $3,000 into annually. Could those really affect my withholding that much? I thought those were smart financial moves.

Those are absolutely smart financial moves! The issue isn't that you're doing anything wrong - it's that the withholding system doesn't always account for them perfectly. When you contribute to 401k and HSA, your taxable income for each paycheck is lower, so the system withholds less tax. However, those contributions don't reduce your tax brackets - they just reduce your total taxable income. If you're near a bracket threshold, this can create a withholding gap. This explains the difference between you and your coworkers too. If they're not maxing retirement accounts, their withholding calculation is more straightforward. Your situation is actually financially better (huge retirement savings), but it requires manual adjustment to your withholding to avoid the surprise tax bill.

The IRS calculator isn't technically broken, but it's not great for complex situations. It works best for people with one job, standard income, and no special circumstances. The moment you add variables like education expenses, multiple income sources, or significant pre-tax deductions, it falls apart. I found the calculator on smartasset.com to be much more accurate for estimating actual withholding needs. It lets you input more details about your specific situation.

Thanks, I'll check out that other calculator. I was starting to think I was going crazy because I followed the IRS calculator recommendations exactly and still ended up owing over $2k. Good to know it's not just me!

Is a paper logbook really enough though? I thought the IRS wanted something more official or digital these days. And do you record personal trips too or just business ones?

A paper logbook is absolutely sufficient - the IRS doesn't require digital records. What matters is that the record is contemporaneous (recorded at the time, not recreated later) and complete. In fact, many tax professionals consider paper logs to be more audit-proof than digital because they show consistent handwriting over time and can't be easily manipulated after the fact. I record all trips, both business and personal. The IRS likes to see a complete picture of your vehicle usage. This shows them that you're tracking everything and properly separating business from personal use. It also helps if they question your total mileage for the year - you can demonstrate that all miles are accounted for.

Do you deduct actual expenses or take the standard mileage rate? With gas prices these days and all the wear and tear on trucks from our heavy equipment, I'm wondering if actual expenses might be better.

What kind of resources did you need to dedicate to get this off the ground? We've thought about it but worried about the compliance risks given how the IRS is scrutinizing these claims.

We started with one full-time CPA who spent about 8 weeks becoming our in-house expert (lots of CPE, IRS notice reading, and conference attendance). Then added a dedicated admin person for documentation collection and organization. The compliance risk is manageable if you're conservative and thorough with documentation. We built a 27-point checklist that every claim must satisfy before filing. It took about $30K in startup costs (mostly training and building templates/processes), but we've generated over $400K in fees since starting 14 months ago.

This is so important. We had a similar disaster with an ERC firm that disappeared when the audits started coming in. What red flags should people watch for when vetting these firms?

Does having a separate bank account matter for proving it's a business? I just use my personal checking for everything.

Having a separate bank account isn't required but it's extremely helpful for proving business intent. It shows you're treating the activity professionally and makes tracking income and expenses much easier. It's one of the factors the IRS considers when determining if something is a business vs. hobby. Other factors include business cards, a business name, proper recordkeeping, and marketing efforts. The more business-like behaviors you demonstrate, the stronger your case for self-employment treatment.

Wait I've never done quarterly payments! I've been self-employed for 2 years and always just paid at tax time. How much trouble am I in?