This has been such an incredibly helpful thread! As someone who's about to face this exact situation when my partner moves into my townhouse next month, reading through everyone's real experiences has been way more valuable than trying to decipher IRS publications. I love how the conversation evolved from the basic tax question to addressing both the practical and relationship aspects. The hybrid approach that @Gianni Serpent described really resonates with me - having my partner pay some bills directly while contributing a smaller amount for mortgage feels like it would maintain the partnership dynamic we want while still handling the tax obligations properly. @Aria Park's point about fair rental value is something I definitely need to research for my area. And @Keisha Williams, thank you for that detailed breakdown of the deduction calculations - the Schedule E reporting makes much more sense now. One thing I'm curious about that I didn't see addressed: has anyone dealt with this situation during a year when they also had significant home improvements? I'm wondering how that affects the deduction calculations when you're already allocating expenses between personal and rental use. My partner and I are planning to renovate the kitchen this summer, so I want to make sure I understand how that factors in. Thanks again everyone for sharing your experiences so openly - this community is amazing!

This thread has been incredibly insightful! I'm a tax attorney and wanted to add a few important considerations I haven't seen mentioned yet. First, be very careful about the "expense sharing" approach some have suggested. While it sounds appealing, the IRS looks at the substance of the arrangement, not just how you label it. If someone is living in your home and making regular payments that help cover your housing costs, that's typically rental income regardless of whether you call it "rent" or "household contributions." That said, the hybrid approach @Gianni Serpent described is actually quite solid from a legal standpoint. Having the partner pay certain bills directly (utilities, groceries, etc.) removes those amounts from rental income consideration, while the direct housing contribution (mortgage portion) is properly reported as rental income. One critical point: make sure your allocation percentages can withstand IRS scrutiny. The "reasonable for the space used" standard is key. For a one-bedroom where you're sharing everything equally, 30-50% is typically defensible, but document your reasoning. Finally, consider the long-term implications. If this relationship becomes permanent, you might want to restructure before marriage since these arrangements can complicate property ownership issues. And definitely consult a local tax professional - state laws vary significantly on some of these issues. The documentation tips everyone has shared are spot-on. Consistency and clear records are your best protection in an audit situation.

Just to add another perspective - make sure you're also considering state tax implications if applicable. Some states have different rules about bad debt deductions than federal, so what's deductible on your federal return might not be on your state return. Also, if you haven't already, I'd strongly recommend getting a tax professional involved given the amount you're dealing with ($14k is significant). They can help ensure you're maximizing your deductions while staying compliant, especially since this is your first time handling this situation. The cost of professional advice is usually worth it to avoid potential issues down the road. One last tip - keep a separate file for each bad debt with all your collection documentation (emails, call logs, letters, etc.). If you ever get audited, having everything organized by individual debt makes the process much smoother.

Great discussion here! As someone who's dealt with similar issues, I want to emphasize the importance of establishing a clear written policy for bad debt write-offs before you actually need it. The IRS looks favorably on businesses that have consistent, documented procedures for determining when debts become uncollectible. I'd recommend creating a simple policy that outlines your collection process (initial invoice, follow-up at 30 days, final notice at 60 days, etc.) and when you'll consider a debt worthless (like after 120 days with no response despite documented attempts). Also, don't forget to check if your state requires you to attempt service of a formal demand letter before writing off debts over certain amounts. Some states have specific requirements that could affect your deduction eligibility. One more tip - if any of these customers are other businesses, you might want to check if they're still operating before writing off the debt. Sometimes a quick search of state business records can reveal if they've dissolved, which strengthens your case that the debt is truly uncollectible.

Just wanted to add another data point for anyone reading this thread - I've been filing from Singapore for 5 years now and can confirm that foreign wages definitely go on Line 1a. One thing I learned the hard way is to make sure you're using the correct exchange rates when converting SGD to USD. The IRS requires you to use the Treasury Department's yearly average exchange rates (available on their website) rather than spot rates or your bank's conversion rates. This can make a meaningful difference in your reported income amount. Also, since you mentioned you're using tax software, double-check that it's properly handling the Singapore tax year vs US tax year difference. Singapore's tax year runs from January to December, but make sure you're reporting the right period's income on your US return. I made this mistake my first year and had to file an amended return. The Foreign Earned Income Exclusion should cover your full $58k income assuming you meet the physical presence test (330 days in Singapore during any 12-month period). Keep a simple spreadsheet tracking your days in/out of Singapore - it'll save you headaches later if the IRS ever asks for documentation.

Just want to echo what everyone else has said - your Singapore wages definitely belong on Line 1a of Form 1040, not Line 1h. I went through this exact same confusion when I first moved to Hong Kong for work. One thing that might help clarify the logic: Line 1a is for ALL wages and salaries, regardless of the source country. Line 1h is specifically for miscellaneous income that doesn't fit into any of the other defined categories on the form (like gambling winnings, jury duty pay, etc.). Your regular employment income from Singapore is still wages, just foreign wages. The fact that you'll be excluding it later with Form 2555 doesn't change where you initially report it. Think of it as a two-step process: first you report ALL your worldwide income in the appropriate sections, then you apply exclusions and credits to reduce your taxable amount. Since you're earning about $58k USD equivalent and have been in Singapore for 3 years, you should easily qualify for the full Foreign Earned Income Exclusion (assuming you meet the physical presence test). Just make sure your tax software is set up to handle foreign income properly - most major programs have specific workflows for expats that will walk you through both the initial reporting and the exclusion forms.

I had a similar experience when I moved mid-tax season! USPS forwarding does work for W2s since they're First-Class Mail, but there can definitely be delays. What really saved me was setting up informed delivery with USPS - it shows you scanned images of mail that's coming to your address each day. That way you can track when your W2 is actually in transit and know if it gets stuck somewhere in the forwarding process. Also, if your old employer has a main corporate number, try calling that instead of your local office. Sometimes the corporate payroll department can handle address changes more efficiently than local HR, especially if your old location was disorganized like you mentioned. They usually have better systems in place for handling former employee requests. One last tip - keep records of when you set up mail forwarding and any communications with your employer about the address change. If you do need to contact the IRS later, having that documentation will speed up the process significantly.

One additional thing to consider - if you've already set up mail forwarding, you can also submit a "Change of Address" form (Form 8822) directly to the IRS. This ensures they have your current address on file, which can be helpful if there are any issues with your tax return processing or if you're due a refund. You can download it from irs.gov or mail in a handwritten note with your old address, new address, and SSN. This is separate from updating your address with your employer, but it's good to have both bases covered. The IRS form is particularly useful if you end up needing to contact them about missing tax documents later - they'll already have your current address in their system. Also, don't forget to update your address with your state tax agency if you moved to a different state. They often have separate requirements and deadlines for tax document delivery.

This is such a timely discussion for me! My spouse and I are in a very similar situation with our husband/wife LLC that we've been filing 1065 returns for. Reading through all these responses has been incredibly helpful. One thing I wanted to add based on our research - if you do decide to switch from partnership to disregarded entity status, make sure you understand the timing implications. The election to change classification (Form 8832) needs to be filed within 75 days of the effective date you want the change to take effect. If you miss that window, you might have to wait until the following tax year or request a late election relief from the IRS. Also, regarding the Oregon state tax implications you mentioned - I'd recommend checking with a local tax professional about any potential Oregon-specific consequences. While the federal change is straightforward, some states have their own rules about entity classification changes that might affect your state tax liability. The estate planning benefits you mentioned for the rental property are definitely worth considering. We're leaning toward making the switch ourselves primarily for that step-up in basis preservation, even though it means dealing with the one-time hassle of terminating the partnership.

This has been such a comprehensive discussion! I'm in a similar situation with my spouse - we have a husband/wife LLC that we've been filing 1065 returns for, and I've been on the fence about switching to Schedule C. Reading through everyone's experiences, it sounds like the key factors to consider are: 1) the simplified paperwork and potentially lower accounting costs, 2) the estate planning benefits (especially that step-up in basis for rental property), and 3) the timing requirements for making the switch. What's really helpful is hearing from people like @0d3e8f732f14 and @9977feaefd10 who actually went through the process. The practical details about quarterly estimated payments becoming simpler and the 75-day window for Form 8832 are exactly what I needed to know. I think I'm convinced that for our situation (also have a rental property), preserving that full step-up in basis is worth the one-time hassle of switching. The potential tax savings for our heirs could be substantial, especially given how much real estate has appreciated over the years we've owned our rental. Thanks to everyone who shared their experiences - this thread has been more helpful than hours of reading IRS publications!