This is super helpful! I was in the exact same situation last year and was so confused by the ACTC calculation. One thing that helped me understand it better was looking at Form 8812 (Additional Child Tax Credit worksheet) - it breaks down all the steps they use. The key thing I learned is that ACTC only applies when your regular CTC exceeds your tax liability, so you're basically getting the "leftover" credit as a refund. It's actually pretty generous once you understand how it works!

Just wanted to add my experience here - I had the same confusion last year with my ACTC amount! What really helped me was understanding that the ACTC calculation can vary so much based on your specific tax situation. For example, if you have multiple kids, the calculation gets more complex because each child can generate up to $1,500 in ACTC, but it all depends on your earned income and how much regular CTC you already used. The IRS Publication 972 also has some good examples that walk through different scenarios. It's definitely one of those tax provisions that seems simple on the surface but has a lot of moving parts underneath!

Quick question - does this affect how much I can contribute to an IRA? I've heard that participating in an employer retirement plan can limit IRA deductions, but now I'm confused about whether mandatory 403b contributions count for that limitation.

This is such a helpful thread! I'm dealing with the exact same situation at my nonprofit organization. We have mandatory 5% contributions plus I chose to do an additional 3% voluntary contribution. Just to confirm my understanding based on everyone's explanations: my Box 12a Code E should only show the 3% voluntary amount, not the full 8%. But both amounts are still pre-tax and reduce my Box 1 wages, correct? I was getting ready to call payroll thinking they made an error, but now I realize the W-2 is probably correct. It's frustrating how confusing these reporting requirements can be - you'd think there would be clearer documentation about this distinction somewhere!

This is such a helpful thread! I'm in a similar situation and was totally confused about the EIN requirements. Just to make sure I understand correctly: I can open a Solo 401k right now as a sole proprietor using my SSN, and then I'll need to get a separate EIN specifically for the retirement plan itself (not for my business). Is that right? Also, when you all mention "Form SS-4 for banking purposes" - is that different from the SS-4 you'd file when starting a new business? I want to make sure I'm checking the right boxes when I apply for the plan EIN. One more question - if I decide to form an LLC later for liability protection, would I need to transfer the Solo 401k to the LLC or can I keep it under my original sole proprietorship structure? Some of the comments mention it depends on how the LLC is taxed but I'm still a bit unclear on the details.

This thread has been incredibly helpful! I'm actually a tax preparer and see this confusion all the time with my self-employed clients. Just wanted to confirm what everyone's been saying and add a few practical tips: You absolutely CAN open a Solo 401k as a sole proprietor with just your SSN - I help clients do this regularly. The plan EIN is totally separate and you'll apply for it after opening the account. A few things to keep in mind: - Make sure you have legitimate self-employment income (1099s, business income, etc.) - The contribution deadline is your tax filing deadline (including extensions) - You can actually contribute for 2024 up until April 15, 2025 if you haven't already - Keep good records of your contributions for tax preparation One last tip: if you're making good money as a freelancer, definitely run the numbers on a Solo 401k vs SEP-IRA. The Solo 401k almost always wins for contribution limits, but the SEP-IRA can be simpler if you ever plan to hire employees. Most of my self-employed clients without employees go with the Solo 401k for the higher limits. Good luck with your retirement planning!

I was in this situation a few years ago. Make sure your employer is using the correct withholding tables for nonresident aliens! Many HR departments just default to the regular withholding without understanding that NRAs can't claim the standard deduction. For the penalty, file Form 2210 and check the box in Part II that says "The taxpayer requests a waiver of the penalty." Attach a statement explaining that you're new to the US tax system, on a TN visa, and that your employer was withholding incorrectly despite your best efforts. I did this and the IRS waived my penalty completely. It's worth a try!

Diego, you've actually done a really thorough job identifying the key forms! As someone who went through this exact situation on my TN visa, I can confirm you're on the right track with the 1040-NR, Schedule A, Schedule OI, and Form 8840. A few additional considerations based on what others have mentioned: **FBAR reporting** - Since your Canadian checking account exceeds $10,000 USD equivalent, you'll need to file FinCEN Form 114 separately by April 15 (with automatic extension to October 15). **Form 8938** - With your TFSA and Canadian accounts combined, you might exceed the reporting threshold for foreign financial assets. This is separate from FBAR and filed with your tax return. **PFIC complications** - If your TFSA contains mutual funds or ETFs, each one technically requires Form 8621. This is where things get really complex and expensive if you're not careful. **Treaty benefits** - Form 8833 can help you claim specific benefits under the US-Canada tax treaty that might reduce your tax burden. For the underpayment penalty, definitely request first-time penalty abatement since this is your first US filing. The IRS is generally reasonable about waiving penalties for newcomers who made good faith efforts to comply. Your employer should really be using NRA withholding tables since you can't claim the standard deduction. This is a common HR mistake that leaves TN visa holders with unexpected tax bills. You might want to have them adjust this going forward and consider making estimated payments if they can't fix the withholding immediately.

I ran into this exact same issue last year and made the mistake of claiming my pre-tax HSA contributions on line 10 initially. Thankfully my tax software flagged it before I submitted. The key thing to remember is that if your HSA contributions show up on your W-2 in box 12 with code "W", they've already reduced your taxable income for the year. Your employer essentially took that money out before calculating your federal income tax withholding, so you've already gotten the tax benefit. Line 10 on Form 1040 is specifically for HSA contributions that haven't received any tax benefit yet - like if you write a check directly to your HSA provider. Those contributions are made with after-tax dollars, so the adjustment on line 10 gives you the deduction you deserve. One thing that helped me understand this better was looking at my paystub. You can see that HSA contributions come out before federal taxes are calculated, which is why they don't need to be claimed again on your return.

This is such a common source of confusion! I made this exact mistake on my first year filing with HSA contributions. What really helped me understand it was thinking of it this way: your employer already gave you the tax break when they took the HSA money out of your paycheck before calculating your federal taxes. If you look at your final paystub for the year, you'll see your "gross pay" versus your "federal taxable wages" - the HSA contributions reduce that taxable wage amount. So when your W-2 shows lower taxable income in box 1, it's already accounting for those HSA contributions. The line 10 adjustment is only for people who made HSA contributions with money that was ALREADY taxed (like writing a personal check to fund their HSA). Those folks deserve to get their tax benefit through the adjustment to income. One tip: if you're using tax software and it seems to be double-counting, look for a question that asks whether your HSA contributions were made "through payroll deduction" or "outside of payroll." That's usually how the software determines whether to apply the line 10 adjustment or not.