What's an EOR service? Is that like a PEO? And do you have any recommendations for ones that work well with very small businesses? I'm only looking to hire one person to start.

An EOR (Employer of Record) is similar to a PEO but specifically designed for international hiring. They essentially become the legal employer in the foreign country while you maintain day-to-day management. For small businesses hiring just one or two people, services like Deel, Remote.com, or Ontop tend to be more cost-effective than traditional global PEOs which usually cater to larger companies. They handle everything from compliant contracts to local tax withholding and benefits requirements. The fees usually range from 5-8% of the employee's salary, which might seem high but is typically cheaper than setting up your own foreign entity. For just one employee in India, this approach could save you significant headaches with compliance.

The US-India tax treaty definitely applies here. Article 15 covers dependent personal services (employment), while Article 14 covers independent personal services (contractors). Generally, if your Indian worker never comes to the US to perform services, their income is only taxable in India. As for LLC vs S-Corp, it really depends on your overall business situation. An LLC with S-Corp election could give you some employment tax advantages if you're also taking a salary, but for purely hiring overseas workers, the structure is less important than properly documenting the relationship. What matters more is whether you classify them correctly as employees vs contractors, and whether you follow the reporting requirements for foreign persons.

Thanks for the suggestion! I actually thought about that, but the problem is my mortgage payment included principal, interest, taxes and insurance all bundled together. So just seeing the total payment on my bank statement wouldn't tell me how much was specifically interest. I wish it was that easy!

This is what I do for clients all the time (tax preparer here). The Wage and Income transcript shows everything reported to the IRS under your SSN. Quicker than waiting for lenders, especially ones that changed hands or closed.

Is the liability protection really that valuable though? I've heard you need good insurance anyway since people can still try to pierce the corporate veil if you don't keep business and personal completely separate?

The liability protection is valuable but not perfect. You're right that you still need good insurance, and yes, "piercing the corporate veil" is a real concern. If you don't maintain separate business bank accounts, mix personal and business expenses, or don't follow corporate formalities, the courts can potentially hold you personally liable. LLC protection works best for legitimate business debts and certain types of lawsuits. It's one layer of protection that works alongside proper insurance. So it's not an either/or situation - smart business owners have both the legal structure AND insurance coverage.

The Medicare surtax (0.9%) only applies to incomes over $200k for singles/$250k married, so it won't affect most small business owners just starting out. The bigger recent tax change was actually the SECURE 2.0 Act which changed retirement plan options for small businesses.

I think I'm over the income limit for direct Roth contributions too. Do you know if I'd run into any issues if I go with the backdoor Roth approach mentioned above? I'm wondering if there's a timing issue since I already made the Traditional contribution a few months ago.

The timing shouldn't be an issue for the backdoor Roth approach. You can convert Traditional IRA funds to Roth at any time - there's no deadline for that part of the process. The only timing concern is getting your contribution classified correctly (as non-deductible) on your tax return. Just make sure you file Form 8606 with your taxes to document the non-deductible contribution, then do the conversion whenever you're ready. Some people prefer to wait a bit between contribution and conversion, while others do it immediately. Either way works fine from a tax perspective.

You're on the right track! When both spouses are over the income limit and covered by workplace plans, backdoor Roth is typically the way to go. Just make sure you're keeping separate IRAs (never combine them) and each filing Form 8606 annually.

Is this a new rule? I sold a car to a dealer last year for $15k and never got any 1099 form from them.

Also don't forget about sales tax for the buyer! In most states, the BUYER has to pay sales tax when they register the vehicle, but a few states require the seller to collect and remit sales tax. Make sure you know your state's rules!