Can you explain what you mean about S-Corps and "reasonable compensation issues"? My construction business is an LLC but I elected S-Corp status for tax purposes and now I'm confused about how this would work.

With an S-Corp, you need to pay yourself a reasonable salary before taking distributions. If the LLC pays for your education, it could be considered either a business expense or potentially a fringe benefit to you as an employee-owner. If it's clearly related to your current business functions and helps you perform your job better, it can be treated as a normal business expense. However, if the education would qualify you for a new trade or significantly different position, the IRS might view it as a taxable fringe benefit to you personally, which complicates things from a tax perspective.

Is this still true? I thought they changed some of these rules with the Tax Cuts and Jobs Act in 2017? My accountant told me the rules got more flexible.

20 Good point about the house allocation. How would you recommend splitting this up on tax forms? Should the house be completely separate from the business assets?

2 I'd recommend separating the house value from the business assets when determining what portion of expenses (like mortgage interest and property taxes) are deductible business expenses. One approach is to determine the house's value as a percentage of the total property value, then allocate that percentage as personal use. The house doesn't need to be completely separate - the LLC can still own the entire property. You just need to properly allocate expenses between business and personal use. If you're not paying market-rate rent to the LLC for your personal use, there could be imputed income or other tax consequences to consider, so that's something to discuss with a tax professional familiar with your specific situation.

19 Yes, cattle operations typically qualify as farming activities under IRS rules. This means you might be eligible for things like farm income averaging, which can help reduce your tax burden in profitable years. Even in loss years, farm activities have some specific rules that can be advantageous.

But that's exactly the concern, right? Without extremely tight definitions, people find ways to game the system. I mean, tipping has expanded to so many industries now - you get tip prompts everywhere from coffee shops to retail stores. Where would they draw the line?

That's a fair point. The expansion of tipping culture does complicate things. I suspect any actual legislation would need to establish criteria like: the worker receives a reduced minimum wage under tip credit rules, the industry has a historical practice of tipping, and the tips are contemporaneous with service rather than contractually required. The IRS and Treasury would likely issue regulations clarifying these boundaries. Similar to how they've handled other tax provisions, they'd establish factors to determine legitimate tips versus disguised regular compensation. The challenge would be enforcement - they're already understaffed for existing tax issues.

I work in payroll software development, and yes, it would be a significant change. We'd need to create new income classifications, update tax withholding algorithms, and modify all the reporting. The IRS would also need new forms. It's not impossible, but would require substantial systems updates.

Is there a deadline to file if you're just trying to get a refund but aren't required to file? Like if I didn't file for 2022 but had withholding, can I still get that money back?

Yes, there's definitely a deadline. You have 3 years from the original due date to file a return and claim a refund. For 2022 returns (which were due April 18, 2023), you have until April 18, 2026 to file and claim any refund you're owed. If you miss that 3-year window, you lose the refund completely - the money becomes property of the U.S. Treasury. So if you had withholding for 2022, you should definitely file before April 2026 to get that money back.

The IRS Free File is actually really good for simple tax situations. If you made under $73,000, you can use it. I used it last year for my W-2 income and it was straightforward. Just go to IRS.gov and search "Free File." Don't go directly to TurboTax's website if you want the free version - go through the IRS Free File portal to make sure you actually get the completely free version. TurboTax's website often upsells you to paid versions even if you qualify for free filing.

That's a really good point about currency risk that I hadn't considered! Do you know if there are any tax-efficient ways to manage currency conversion when sending money back to the US? I'll still have some student loans and a car payment in USD.

There aren't specific tax advantages for currency conversion, but you might want to look into services like Wise (formerly TransferWise) or OFX for better exchange rates than banks offer. The conversions themselves aren't tax events unless you're actually trading currencies as investments. For your US debts, you might consider keeping a US bank account open and periodically transferring larger sums to minimize conversion fees, rather than monthly smaller transfers. Some expats also maintain US credit cards for US-based recurring payments while living abroad, which can simplify things.

This is so important and often overlooked! I worked in Canada for 7 years and then moved back to the US. When I applied for Social Security benefits, they initially calculated without my Canadian work history. I had to specifically request they consider the totalization agreement, which increased my monthly benefit by about $300!