Thank you all SO MUCH for the helpful responses! This makes perfect sense now. I was overthinking it and getting worried for no reason. I'll go ahead and complete the Direct Pay process with my 2023 info for verification and make sure to select the correct tax year and form. Really appreciate everyone sharing their experiences - especially those who confirmed with actual IRS agents!

Do you know if there's a delay in processing when there's been a name change? I'm also newly married and worried my refund might get held up because of it.

There shouldn't be a significant delay due to a name change if you've already officially changed your name with the Social Security Administration before filing. The IRS cross-references with SSA records, so that's the important step. If you filed with your new name but haven't updated with SSA yet, there could be a slight delay while they verify your identity. But even then, it's usually not a major holdup compared to the normal processing times.

Do you have to worry about CFC (Controlled Foreign Corporation) rules with the Canadian corporation approach? I heard those can be complicated for US citizens.

Yes, CFC rules definitely come into play, particularly the GILTI (Global Intangible Low-Taxed Income) provisions from the 2017 tax reform. These rules can cause immediate US taxation on certain types of income earned through your Canadian corporation. However, with proper planning, you can often manage these effectively. For consulting businesses, you may qualify for the high-tax exception if Canadian corporate taxes exceed 18.9% (90% of the US corporate rate). Also, you can make a "962 election" on your US return to apply foreign tax credits against GILTI tax. It's complex but can be navigated with good advice.

Is there a specific form you need to file to claim that exemption from self-employment tax? I've been paying both US and Canadian retirement contributions and now I'm wondering if I've been doing it wrong.

I heard some expats are going heavy into crypto to avoid reporting but that seems super risky. Isn't the IRS cracking down on that now?

Using crypto to avoid reporting is an absolutely terrible idea. The IRS has massively increased enforcement in this area. Crypto exchanges are now required to report transactions, blockchain analytics are getting more sophisticated, and the penalties for willful non-compliance can include criminal charges. Remember that crypto transactions (including trading one crypto for another) are taxable events. The IRS considers crypto to be property, not currency, so each transaction can trigger capital gains tax. Some people mistakenly think crypto is "invisible" but that's becoming less true every year as reporting requirements expand.

Whoa I had no idea about this! Is this true even for index funds that just follow something like the S&P 500 but are based in another country? This is the kind of stuff that makes me wonder if the hassle is worth it...

How do you actually prove inventory is "obsolete" though? Do you need documentation or can you just decide something isn't going to sell anymore?

You need to have a consistent method for determining when inventory becomes obsolete or has declined in value. This could be based on how long an item has been in stock (like items over 12 months old), items that haven't sold after multiple price reductions, or products that have been replaced by newer models. The key is documenting your process and applying it consistently. You can't just randomly decide something is obsolete when you want a tax deduction. Most businesses create a written inventory policy that explains their method for identifying and writing down obsolete inventory. If you're audited, the IRS will want to see that you followed this policy.

This! I learned this lesson the hard way my first year in business. Had a "profitable" year on paper but all the cash went to inventory growth. Still had to pay taxes on the profit even though my bank account was empty.

Hmm that's a really good point. I did get a promotion in August that bumped me from about $52k to the $58k range, so that could definitely be affecting things. Do you know if there's a good way to calculate the prorated amounts when your income changes mid-year?

You'll need to separate your income and withholding into two periods: before and after the promotion. For each period, calculate the annual equivalent of that income level (what you would have made if you'd earned that same amount all year), figure the tax on that annual amount, then prorate it for the number of months at that rate. For example, if you made $4,333/month ($52k/12) for 7 months, then $4,833/month for 5 months, you'd calculate: (Annual tax on $52k × 7/12) + (Annual tax on $58k × 5/12) = Your actual tax liability. Then compare your actual withholdings to this amount.

The IRS2Go app is really more for checking refund status than doing calculations. I'd recommend using the official Tax Withholding Estimator on the IRS website or something like FreeTaxUSA which lets you run scenarios for free.