Anyone know if reporting income from a 1042-S affects your eligibility for the Foreign Tax Credit? I have both 1042-S and 1099-INT forms this year and I'm trying to figure out if I can claim FTC for both income types since some tax was withheld on the 1042-S.

I went through this exact same situation two years ago when I transitioned from F-1 student status to permanent resident. The key thing to remember is that you're absolutely on the right track - you do need to report this income on your Form 1040 even though you received a 1042-S. One thing I learned the hard way is to make sure you check if your bank has your updated residency status on file. Since you're now a resident, you should submit a new W-9 to replace any W-8BEN they have on file. This will ensure you get proper 1099-INT forms next year instead of dealing with this 1042-S situation again. Also, don't forget that if you had any tax withheld earlier in the year when you were still a non-resident (from other sources), you can claim credit for those withholdings on your 1040. The timing of your status change matters for determining what credits you're eligible for throughout the tax year.

Has anyone tried working with a tax attorney instead of dealing with the IRS directly? I'm in a similar situation owing about $45k and wondering if it's worth the expense.

I'm going through something similar right now - owe about $58k and was terrified they'd force me to liquidate everything. After working with the IRS directly, I can confirm what others have said about them being more reasonable than expected. They absolutely do NOT require you to drain your entire savings or sell essential assets like your car. The key is being completely honest about your financial situation. When I filled out Form 433-F, I documented every expense including my modest emergency fund (about 3 months of expenses) and they accepted it as reasonable. They even acknowledged that having some emergency savings actually makes you more likely to stick to the payment plan. My advice: don't panic and start liquidating assets before talking to them. With your $60k income, you'll likely qualify for a payment plan around $800-1000/month depending on your other expenses. The IRS wants to get paid, not destroy your ability to earn income or maintain basic living standards. Take a deep breath - this is manageable even though it feels overwhelming right now.

From my experience, track EVERYTHING expense-wise. When I started contracting for a Japanese company last year, I didn't realize how many legitimate business deductions I could take. Internet, portion of rent/mortgage for home office (if you have dedicated workspace), computer equipment, software subscriptions, professional development courses, even part of your cell phone bill if you use it for work. It all adds up!

One thing I haven't seen mentioned yet is keeping detailed records of all your communications and contracts with the Dutch company. Since this is cross-border income, you'll want to maintain clear documentation showing: 1. Your contractor agreement/statement of work 2. Invoices you send them (even if they don't require formal invoicing) 3. Payment records showing the USD amounts and dates 4. Any correspondence about the work arrangement This documentation will be crucial if the IRS ever has questions about the nature of your income or work relationship. It helps establish that you're truly an independent contractor rather than an employee (which could have different tax implications). Also, since you mentioned money is tight, consider setting up a separate business checking account for this income. It makes tracking much easier come tax time and looks more professional. Many credit unions offer free business checking accounts for small businesses. The 30-35% rule mentioned earlier is solid advice, but in your first year you might want to err on the side of setting aside closer to 35-40% until you get a feel for your actual tax liability after deductions.

Great discussion here! I went through almost the exact same situation last year when my employer didn't offer health benefits. Let me share what I learned after talking to both a tax professional and the marketplace directly. The key insight is that premium tax credits are usually WAY more valuable than trying to deduct premiums as medical expenses. Here's why: 1. Medical expense deductions require itemizing AND only apply to expenses over 7.5% of your AGI. For most people, this threshold is very high. 2. Premium tax credits reduce your monthly insurance cost directly - it's like getting an immediate discount rather than waiting for tax time. 3. The credits are quite generous if you qualify. Based on your situation (tech startup employee), you might be surprised how much assistance you're eligible for. One thing I wish I'd known earlier: when you apply through the marketplace, you can choose to have the credits applied monthly to reduce your premium, or take them as a lump sum refund when you file taxes. I chose monthly and it made our budget much more manageable. Also, losing coverage through your wife's employer definitely qualifies you for a Special Enrollment Period, so you won't be stuck waiting for open enrollment. The marketplace website has a preview tool where you can see estimated costs and credits before you actually apply. Highly recommend starting there to get a sense of what you might pay.

Just to add another perspective as someone who went through this exact transition - don't forget to factor in the potential COBRA option from your wife's employer when she leaves. You have 60 days to elect COBRA coverage, which might bridge you while you're setting up marketplace coverage. COBRA is usually expensive (you pay the full premium plus 2% admin fee), but it can be worth comparing to marketplace options, especially if you have ongoing medical needs with current providers. The advantage is you keep the same plan and network temporarily. However, in most cases, marketplace coverage with premium tax credits will be significantly cheaper than COBRA. I ended up saving about $400/month by going with a marketplace plan instead of COBRA, even after factoring in the credits. One more thing - if your wife does any freelance or consulting work after leaving her job, even minimal income, she could potentially qualify for the self-employed health insurance deduction that someone mentioned. This is a really valuable "above-the-line" deduction that you can take even while using the standard deduction. Worth exploring if she has any self-employment income at all.

I'm at week 11 with my amended return to add my newborn son's SSN for the child tax credit - filed through FreeTaxUSA after we finally received his social security card (it took almost 8 weeks to arrive after birth). Like everyone else here, I've been stuck on that dreaded "Processing" status with absolutely zero movement on the tracker. This entire discussion has been incredibly helpful and honestly such a relief to read! I was getting really worried that something went wrong with my filing since there's been no progress for months, but seeing so many people in nearly identical situations is so reassuring. Learning that 20-30 weeks is the realistic timeline instead of the misleading 16 weeks the IRS advertises really helps me mentally prepare for this long wait. What's been most comforting is hearing from multiple people that adding a dependent's SSN is routine and low-risk for audit. As a new parent dealing with my first tax amendment, I was anxious this might trigger extra scrutiny or cause problems, but it sounds like this type of correction is very common and straightforward. I'm definitely going to dig through my FreeTaxUSA confirmation emails to find those processing center codes everyone mentioned to see where mine ended up. Really hoping it didn't get routed to Austin or Kansas City! It's good to know about resources like the Taxpayer Advocate Service if things get financially tight while waiting. Thanks to everyone for sharing their experiences and all the helpful resources. It's oddly comforting to know we're all in this same frustrating waiting game together with such similar situations. The waiting continues, but at least now I have realistic expectations!

I'm at week 2 with my amended return to add my son's SSN for the child tax credit - filed through H&R Block after we finally received his social security card following some delays with getting his birth certificate processed first. Just starting this journey but already feeling anxious about the wait ahead! This entire thread has been incredibly eye-opening and honestly such a relief to find! I was naively thinking the IRS's 16-week estimate was realistic, but clearly from everyone's experiences here, 20-30 weeks is much more accurate. It's helpful to know what I'm really in for so I can stop obsessively checking that tracker expecting quick updates. What's most reassuring is hearing from so many people that adding a dependent's SSN is routine and considered low-risk for audit. As someone completely new to tax amendments, I was worried this might automatically trigger problems or extra scrutiny, but it sounds like this type of correction is very standard and straightforward. I'm going to dig through my H&R Block paperwork to find those processing center codes everyone mentioned - really hoping mine doesn't end up at Austin or Kansas City based on what I'm reading about their backlogs! It's also good to know about resources like the Taxpayer Advocate Service and some of the other tools people have mentioned if I need them down the road. Thanks to everyone for sharing their timelines and experiences. Even though I'm just starting this process, it's oddly comforting to know there are so many of us going through the exact same situation with very similar circumstances. The waiting game begins!