At Big Cake Tax, we see it far too often: a client holds onto their U.S. home while moving abroad, thinking “I’ll sell it later, once I’m settled.” But what they don’t realize is that their new country of tax residency may tax the entire gain from that sale, even if the U.S. wouldn’t.

This mistake can cost you tens of thousands, if not more.

If you're a real estate professional living abroad, you might be wondering whether your income qualifies for the Foreign Earned Income Exclusion (FEIE) or if you'll have to pay self-employment (SE) tax on certain earnings. The answer depends on the type of real estate income you earn and how your activities are classified by the IRS. Let's break it down.

Many foreign entrepreneurs set up a U.S. single-member LLC thinking they won’t owe the IRS anything if they don’t make a profit. But even if your LLC has zero income, the IRS still expects paperwork. Miss it, and you could be facing a $25,000 penalty—per year.

One of the biggest mistakes foreign business owners make is assuming they don’t need to file Form 5472 if the LLC had no activity. That’s not how the IRS sees it.

As a business owner, self-employed individual, or even a rental property owner, it's crucial to understand your tax obligations, especially when it comes to issuing and filing 1099 forms. The IRS uses these forms to ensure that all income is reported and taxed properly. Let's break down who needs to file a 1099, when it should be filed, and the potential penalties for not meeting the filing requirements.

As the year comes to a close, many people think about giving back to their communities and finding ways to save on taxes. One smart but often overlooked way to do both is by donating stocks that have gone up in value. This method can support your favorite causes and reduce your tax bill at the same time. Let’s break it down in simple terms…

Owning rental property can be a great way to build wealth, but it also comes with tax complexities. One of the most critical tax tools for property owners is depreciation. If you’re not taking depreciation correctly—or at all—you could be leaving money on the table. Worse, the IRS will assume you’ve taken depreciation when you sell the property, which can lead to higher taxes and penalties.

Let’s explore why depreciation is essential, how it impacts your taxes, and how we can help rental property owners ensure they’re maximizing their write-offs and staying compliant.

Moving abroad mid-year introduces exciting opportunities—and potential tax savings. One significant benefit for U.S. expats and nomads alike is the Foreign Earned Income Exclusion (FEIE), which allows you to exclude a portion of your foreign-earned income from U.S. taxation. If you moved abroad mid-year and didn’t claim the FEIE, amending your prior tax returns to include the partial-year FEIE could lead to substantial refunds.