11 I was in the same boat last year and researched all the options. Here's the simplest explanation: 1) Single-member LLC (default): File Schedule C with your personal return. Only the profit hits your personal income, but all details are on Schedule C. 2) LLC with S-Corp election: File Form 1120-S (separate business return) AND report profits on your personal return via Schedule K-1. More separation but more complexity. 3) LLC with C-Corp election: Completely separate business return with separate taxation. Highest separation but potential double taxation and highest complexity. For most small business owners, option #1 is simplest and most cost-effective. The business activity IS separate (on Schedule C) even though it's attached to your personal return.

One thing to add that might help with your mental separation - even though your LLC taxes flow through to your personal return via Schedule C, you should still maintain completely separate bank accounts and credit cards for your business. This creates a clear paper trail and makes tracking business expenses much easier. I'd also recommend keeping a simple spreadsheet or using accounting software to track your business income and expenses throughout the year. This way, when tax time comes, you'll have everything organized and won't have to scramble to separate business from personal transactions. The key insight that helped me was realizing that Schedule C IS your business tax return - it just happens to be attached to your personal 1040. All your business details, deductions, and calculations are isolated on that schedule, giving you the separation you want while keeping things simple from a filing perspective. Good luck with your first year of business taxes!

Something everyone's missing - if you win under like $600 at blackjack, the casino doesn't report it to the IRS so nobody would ever know if you didn't report it. Just saying... the IRS has bigger fish to fry than someone who won $270 playing cards lol

I just went through this exact situation last year! Won about $400 at a poker tournament and was totally confused about reporting it. Here's what I learned: Yes, you technically need to report ALL gambling winnings as income, even your $270. The threshold for casinos to issue a W-2G is $1,200+ for most table games, but that's just when THEY have to report it - you still owe taxes on smaller amounts. For your situation, report it as "Other Income" on Schedule 1 of Form 1040. The tricky part is you can deduct gambling losses against winnings IF you itemize deductions (not just take the standard deduction). So if you lost money gambling elsewhere during the year, keep those records! Honestly, for $270 the practical risk is low, but it's better to be safe than sorry. Plus once you start reporting gambling income properly, you'll be prepared if you ever hit bigger winnings in the future. Just make sure to keep better records going forward - date, location, amount won/lost, type of game. Your phone camera is your friend for documenting everything!

Just wondering - does having a SSN from your internships change anything about how you fill out the W8-BEN? I got a social when I worked in the US last summer.

Just to add one more perspective here - don't stress too much about the W8-BEN form. It's actually pretty straightforward once you understand what it's for. The key thing to remember is that this form is specifically about the interest income your bank account generates, not your employment income. Since you're Canadian, you'll definitely benefit from the tax treaty. The US-Canada treaty eliminates withholding on bank interest entirely (0% instead of 30%), so filling out this form will actually save you money on any interest you earn. One thing I'd suggest is to keep a copy of your completed W8-BEN for your records. When you do eventually become a US tax resident (which sounds like it'll happen soon with your full-time move), you'll need to notify your bank and switch to providing them with a W-9 form instead. Having documentation of when you made that transition can be helpful for tax purposes. The form itself is valid for 3 years, but your circumstances are changing, so you'll likely need to update it sooner than that. Good luck with your move!

Dont forget about self-employment tax! Even with low income, you'll still owe the 15.3% SE tax on your profits. Proper expense categorization helps reduce your taxable income, so its worth getting right. And make sure you're tracking ANY business miles driven (to buy those yoga mats, to scope out teaching locations, etc) cause those are valuable deductions too!

Great point about self-employment tax! I'd also recommend setting up a dedicated business bank account if you haven't already - it makes tracking expenses SO much easier and looks more professional if you ever get audited. Even for a small yoga business, having clean separation between personal and business finances will save you headaches at tax time. For your yoga mats and blocks at $195 total, definitely treat those as supplies since they'll get worn out from regular use. And don't forget you can also deduct things like liability insurance for your classes, any yoga certification courses you take, and even a portion of your streaming subscriptions if you use them to play music during classes (just keep good records of the business vs personal use percentage). One more tip - if you're teaching at different locations, track your mileage between venues. Those miles add up quickly and can be a significant deduction!

This is a really complex situation that depends heavily on which depreciation method you've been using! Since you mentioned tracking mileage meticulously, I'm curious - have you been using the standard mileage deduction or actual expenses (including depreciation) for your current vehicle? If you've been using standard mileage, your tax situation when selling will be quite different from what some others have described. The standard mileage rate includes a depreciation component (around 27 cents per mile in recent years), so your adjusted basis would be your original cost minus the total depreciation embedded in all those standard mileage deductions over 6 years. However, if you've been claiming actual depreciation and the car is fully depreciated as you mentioned, then yes - you're looking at significant depreciation recapture taxed as ordinary income when you sell. For the new $38,000 vehicle, switching to actual expenses could be beneficial since you'd be able to claim bonus depreciation or Section 179 expensing. Just remember that once you switch to actual expenses for a vehicle, you can't go back to standard mileage for that same car. Given the amounts involved here, I'd strongly recommend consulting with a tax professional before making the purchase. The timing of when you sell the old car versus buy the new one, plus which depreciation method you choose going forward, could save or cost you thousands in taxes.

You're absolutely on the right track with your calculation! Yes, with standard mileage deduction over 6 years, your adjusted basis would be significantly higher than someone who fully depreciated their vehicle using actual expenses, which means a much smaller taxable gain. One additional consideration I'd mention - when you switch to actual expenses for your new vehicle, make sure you're prepared for the record-keeping requirements. You'll need to track not just mileage, but also maintenance, repairs, insurance, registration fees, and all other vehicle-related expenses. It's more work than standard mileage, but with a $38,000 vehicle and current bonus depreciation rules, the tax savings should make it worthwhile. Also, don't forget that your business use percentage (80% in your case) applies to all these deductions. So on that $38,000 vehicle, you'd be looking at bonus depreciation on about $30,400 of the purchase price, which could provide substantial first-year tax savings to offset your gain from the sale. The timing strategy others mentioned is spot-on too - selling early in the year and purchasing late in the year maximizes your depreciation deduction in the year of sale. Good luck with the upgrade!