I went through this exact same situation with my husband's furniture restoration hobby! What we learned after consulting with a tax professional is that you're absolutely right to be collecting sales tax - in most states, it's required regardless of whether you're operating as a hobby or business. The key thing is that sales tax collection and income tax classification are completely separate issues. Just because you collect sales tax doesn't automatically make it a business for IRS purposes. The IRS looks at factors like profit motive, time invested, whether you depend on the income, and how businesslike your operations are. For your situation with $580 in sales, you'd likely still report this as hobby income on Schedule 1 of your tax return. The sales tax you collected gets reported separately - you'll show it as income when you collect it, then as a deduction when you remit it to the state, so it essentially washes out on your federal return. One tip: keep detailed records of all your sales, including the sales tax portion, because you'll need to show the state exactly what you collected and when. Most states require quarterly or annual filings even for small amounts. Your husband is doing the right thing by being proactive about compliance! Better to err on the side of caution with tax matters.

I went through almost this exact same situation last year with my ceramic pottery hobby! After doing a lot of research and talking to my state's tax office, here's what I learned: You're absolutely doing the right thing by collecting sales tax. In most states, sales tax is required on tangible goods regardless of whether it's a hobby or formal business - the state just wants their cut of the transaction. For the income reporting piece, you can still treat this as hobby income since $580 from occasional craft fair sales clearly falls into hobby territory. The fact that you're collecting sales tax doesn't change that classification - they're separate tax issues entirely. When you file your taxes, you'll report the total income (including the sales tax portion) on Schedule 1 as "Other Income." Then when you remit the sales tax to your state, you can deduct that payment, so the sales tax portion essentially washes out on your federal return. The key is keeping good records of what you collected versus what you remitted to the state. Most states have pretty simple filing requirements for small sellers - mine only requires annual filing since I'm under their quarterly threshold. Don't stress too much about crossing into "business" territory at your current level. The IRS looks at things like profit motive, time invested, and business-like operations. Occasional craft fair sales of $580 is clearly hobby activity!

Make sure you're tracking all your income properly! The IRS now requires payment apps to report transactions over $600, so Zelle, PayPal, etc will be sending 1099-K forms for your income. Even if they don't, YOU still need to report all that income. And be careful about claiming too many expenses without documentation - that's a red flag for audits. Better to have a slightly higher tax bill than deal with an audit where you can't prove your deductions.

This is a lot to take in but really helpful info! I'm definitely going to need professional help to get this sorted out. A few quick questions: 1. Should I focus on getting 2024 taxes filed first, or start with making estimated payments for 2025? 2. For business expenses, I buy a lot of equipment that I use for both client work and personal projects (like my gaming setup that I also use for game development clients). How do I handle the mixed-use situation? 3. Is there a penalty for not making quarterly payments in 2024, and if so, how much are we talking about? I'm realizing I've been way too casual about this. With the income I'm making, I can't afford to mess this up. Thanks everyone for the reality check - better late than never to get compliant!

Just wanted to chime in as someone who went through a similar situation last year! When I transitioned from employer coverage to Medicaid mid-year, I was also confused about what to do with all the forms. One thing that helped me was keeping a simple spreadsheet tracking my coverage months - January through October with employer insurance, November-December with Medicaid. This made it easy to verify that the dates on my 1095-C matched what I remembered, and later helped when I got my 1095-B from the state. The key thing to remember is that as long as you had qualifying coverage for all 12 months (which you did), you're good to go. The 1095 forms are just the paper trail proving it. I ended up never needing to reference them again after filing, but I kept them with my tax documents just in case. Hope your tax filing goes smoothly this year!

I went through almost the exact same situation a couple years ago! Had employer insurance through September, then got on Medicaid in October after losing my job. Just to echo what others have said - you definitely don't need to file the 1095-C with your return. It's purely for your records. The IRS already gets a copy from your employer, so they know you had coverage during those months. One small thing to watch out for - make sure the coverage end date on your 1095-C matches when your employer coverage actually ended. Mine initially showed coverage through November even though I lost my job (and insurance) in September. Had to contact HR to get a corrected form. It probably wouldn't have caused major issues, but it's good to have accurate records. Also, don't stress if your Medicaid 1095-B takes a while to arrive. Some states are slower than others with mailing them out, but you can always check your state's Medicaid portal online to see if there's a digital copy available for download. You're all set as long as you had continuous coverage, which it sounds like you did!

One additional consideration for your dual-status situation - make sure you're aware of any potential treaty benefits between the US and Canada that might affect your tax calculation. The US-Canada Tax Treaty has specific provisions for residents who change status during the year, and there might be tie-breaker rules that could impact how you're treated for certain types of income. Also, since you mentioned you were working remotely for your Canadian employer while being a US tax resident, you'll want to verify that your employer properly handled any Canadian tax withholdings during that period. Sometimes employers don't adjust withholdings when employees become non-residents for Canadian tax purposes, which could affect your foreign tax credit calculations. Have you considered whether you need to file any additional Canadian forms (like a departure tax return) since you became a non-resident of Canada? The timing of your tax residency changes in both countries can create some complex interactions that might affect your overall tax liability.

Jacob, your approach looks solid, but I wanted to add a few practical tips from my own dual-status experience moving from the UK to the US: 1. **Documentation is key** - Keep detailed records of your residency determination. Since you mentioned becoming a US resident under the Green Card test, make sure you have clear documentation of when your status changed, as this will be crucial if the IRS has questions. 2. **State tax considerations** - Don't forget about state tax implications! Depending on which state you're in, you may need to file a part-year resident return there too, and some states have different rules for recognizing foreign tax credits. 3. **Estimated tax payments** - Since you had no US income in 2023 but will likely have US income in 2024, consider whether you need to make estimated tax payments for 2024. The transition year can sometimes create unexpected tax liabilities in the following year. 4. **FBAR and Form 8938** - Make sure you're also considering your reporting requirements for foreign bank accounts and assets. Even though you're focused on the income tax return, the FBAR and Form 8938 thresholds and requirements can be different for dual-status taxpayers. The foreign tax credit timing issue you mentioned is very common - I had the exact same situation with additional taxes paid the following year. Amelia's advice about claiming them on your 2024 return is spot on. Good luck with your filing! The first dual-status return is always the most challenging, but you'll have a much better understanding for future years.

I went through almost the exact same situation when I transferred from our Vancouver office to Chicago in 2023. The double taxation on RSUs is incredibly frustrating, especially when your tax preparer doesn't understand cross-border issues. What saved me was getting really organized about the documentation upfront. Here's what I learned from my experience: 1. **Get the allocation worksheet from your employer immediately** - Don't wait. Contact both your HR department and your stock plan administrator (usually a third-party like Fidelity, Schwab, or E*TRADE). They should be able to provide a breakdown showing what percentage of your RSU income relates to work performed in each country during the vesting period. 2. **File Form 8833 with detailed explanations** - This is non-negotiable for claiming treaty benefits. Be very specific about citing Article XV of the US-Canada tax treaty and show your exact calculation method. I attached a cover letter explaining my situation and included all supporting documentation. 3. **Keep detailed records of your transfer** - Employment authorization documents, transfer confirmation emails, start/end dates in each office. The IRS wants to see that your allocation method is based on actual facts, not just estimates. In my case, I had worked 2.5 years in Canada out of a 4-year vesting period, so about 62% of my RSU income was Canadian-sourced. The IRS accepted my filing without any questions, and I ended up saving about $9,200 compared to what my original tax preparer calculated. Don't let a tax preparer who doesn't understand international tax cost you thousands. This is a well-established area of tax law, and with proper documentation, the IRS should accept your position under the treaty.

I'm dealing with a very similar cross-border RSU situation after transferring from our Dublin office to San Francisco last year. The complexity of US-Ireland tax treaty provisions for RSUs has been a nightmare to navigate. One thing I learned that might help others in this thread - when you're calculating the allocation based on work performed during the vesting period, make sure you're using business days rather than calendar days. My tax attorney pointed out that weekends, holidays, and vacation days shouldn't count toward the allocation calculation since you weren't actually performing services on those days. Also, for anyone dealing with this issue, I found that creating a detailed timeline document was incredibly helpful. I mapped out my exact employment dates, transfer paperwork, visa approvals, and first/last days worked in each country. This timeline became the foundation for my Form 8833 filing and helped demonstrate to the IRS that my allocation method was based on concrete facts rather than estimates. The Ireland-US treaty (Article 15) works similarly to the Canada-US provisions mentioned here. After properly documenting everything and filing the treaty disclosure, I was able to avoid about $11,000 in double taxation that my original tax preparer had calculated. The peace of mind from getting it right was worth the extra effort to gather all the documentation.