Thanks so much for mentioning this! I've been so focused on my current filing situation that I haven't really thought ahead to next year. Do you recommend any specific resources for learning about the tax treaty between US and Japan? And did you end up needing professional help once you moved abroad?

The IRS has a decent page explaining tax treaties, but it's pretty technical. I found the Expat Tax Blog by Greenback Tax Services had clearer explanations about the US-Japan specific provisions. As for professional help, I did end up using a tax preparer my first year abroad because the learning curve was steep. After that first year, I went back to doing them myself with tax software that specifically handles expat situations. The key forms you'll need to understand are Form 2555 (for FEIE), Form 1116 (for FTC), and FinCEN 114 (FBAR). Also, Japanese tax forms if you'll be working there, which are a whole different challenge!

I used TurboTax last year with my Canadian husband. It does let you enter "NRA" instead of an SSN/ITIN, but it was a bit confusing to find. You have to go through the spouse section, indicate they're a non-resident alien, and then it gives you the option. I'd recommend using the desktop version rather than online for this situation - it seemed to have better handling of international scenarios.

Did you at least check "Yes" on line 7a? Or did you check "No" and still had no issues? My situation is I checked "No" but did file the FBAR correctly, trying to decide if I need to amend.

I actually checked "Yes" on line 7a, just didn't fill in the countries on 7b. That's probably why it didn't raise any flags. If you checked "No" on 7a but filed an FBAR, that's a direct contradiction that might be more likely to raise questions. The IRS systems do compare FBAR filings with tax returns, so having contradictory information between them could potentially trigger a review. In your case, I'd probably consider amending since the "No" answer on 7a directly conflicts with your FBAR filing.

Thanks for this perspective. My foreign accounts total about $35,000, so definitely over the FBAR threshold. I did check "Yes" on 7a correctly, just left 7b blank where it asks for the countries. And yes, I filed the FBAR on time with complete information. I think I'll go ahead with an amended return just to be safe. Better to spend a little time fixing it now than worrying about it later.

That's a wise decision. With $35,000 in foreign accounts, you're definitely required to have complete and accurate reporting. While the chance of issues arising solely from a missing country name when you've otherwise properly reported is relatively small, filing the amendment eliminates that risk entirely. The amendment process for this kind of correction is fairly straightforward. You'll file Form 1040-X along with a corrected Schedule B. Make sure to clearly indicate in Part III of Form 1040-X that you're correcting the country information for foreign accounts on Schedule B, Line 7b. This type of amendment shouldn't affect your tax liability at all.

Is it different if you're in a golf-related business? I sell custom golf accessories and have display items in my office that are technically usable but mainly for showing clients.

For your situation it's completely different since those items directly relate to what you're selling. That's a clear business purpose - they're essentially product samples or demonstration items. You could likely deduct those as ordinary and necessary business expenses. In the original poster's consulting business that's unrelated to golf, it's harder to show a direct business purpose for an expensive putter beyond general office decor or client entertainment. That's where the documentation becomes more important to demonstrate regular business use.

Actually, Section 179 lets you deduct the full cost in year one rather than depreciating it - that's the whole point of the provision. But you're right that it would apply here if the putter qualifies as business equipment.

I haven't tried TaxAct. How's the pricing compared to TurboTax? And does it let you jump directly to Schedule C without going through personal info you've already entered a million times before?

The pricing is definitely better - usually about half what TurboTax charges for the same features. For 2023 tax year I paid $65 total for federal and state with business income, compared to around $140 with TurboTax. Yes, you can jump directly to Schedule C and other forms! They have a forms-based navigation option where you can select exactly what you want to work on. You still need to complete basic personal info once, but after that you can move freely between different sections without following their sequence. It's much more efficient if you know what you're doing.

I tried the PDF forms route but got nervous about math errors. Don't the software programs check calculations and look for red flags? I'm always worried I'll miss something and get audited.

Thanks for sharing your experience! Did you have any issues with the IRS questioning your Bona Fide Residence status since you were still in the US for almost half the year? And did you have to pay US taxes on the portion of your income earned while physically in the US?

I did initially get some questions from the IRS about my Bona Fide Residence status. What helped my case was having documentation showing I was paying taxes in Hungary, had a permanent residence there (rental agreement), maintained local bank accounts, and had community ties (memberships in local organizations). The key factor that seemed to satisfy them was that my life was clearly centered in Hungary, with US visits being temporary. Yes, I absolutely had to pay US taxes on income earned while physically working in the US, even though it was for my Hungarian employer. I tracked my work days by location and reported accordingly. I used a time-tracking app that logged my IP address to help document where I was working each day, which was helpful documentation.

Form 8833 isn't always required though. The instructions specifically say you don't need it for claiming foreign tax credits or the foreign earned income exclusion. You only need it for treaty positions that aren't already covered by existing forms.

You're right about Form 8833 not being required for standard foreign tax credits or the FEIE. I should have been more specific - I was thinking about treaty-specific provisions that might help in a split residency situation, particularly the "tie-breaker" rules that determine which country has primary taxing rights when you're technically a resident of both. For example, if both the US and Poland consider you a tax resident under their respective domestic laws, the treaty's tie-breaker provisions would determine where your primary tax residence is. Claiming that type of treaty benefit typically does require Form 8833. This became relevant in my case because Germany considered me a tax resident based on my having an apartment there, even though I didn't meet the US FEIE requirements that year.