Quick question for everyone - my wife and I are in literally the exact same situation as OP, except my wife is only a part-time student taking 2 classes per semester. Does anyone know if the Form 8880 student restriction only applies to full-time students? Or are part-time students also disqualified?

This is such a helpful thread! I'm in a similar situation where my husband just started his master's program this fall. I was really hoping to claim the Form 8880 credit since I've been maxing out my Roth IRA contributions this year ($6,500). It's disappointing that the student rule is so strict - seems unfair that the working spouse gets penalized just because their partner is trying to better themselves through education. But I guess that's just how the tax code works sometimes. I'm definitely going to look into those education credits that others mentioned. We're probably right at the income threshold where my IRA contributions might help us qualify for a better education credit. Thanks everyone for sharing your experiences and the helpful resources!

For any other Australians filling out W-8BEN, remember to write your date in MM-DD-YYYY format instead of the DD-MM-YYYY format we use here. I had my form bounced back because I wrote the date "Australian style" and the US company's system couldn't process it. Also, make sure to write "Australia" as your country of citizenship in Part 1, not "Australian" or "AU". These little details can save you a lot of back-and-forth!

As a fellow Australian who's been through this process multiple times, I can confirm that Sean's advice about Article 14 is spot on for most freelance editing work. Just wanted to add a couple of practical tips that helped me avoid headaches: 1. When you write "Australia" in the country field, make sure it's consistent throughout the form - don't mix "Australia" and "Australian" 2. For the treaty article description, I usually write something like "Article 14 - Independent Personal Services - Video editing services provided remotely from Australia" 3. Keep a scanned copy of your completed W-8BEN for your records - some clients lose them and you'll need to provide another copy The key thing to remember is that without completing Section 2 properly, you'll have 30% withheld instead of 0% for independent contractor services. That's a huge difference when you're trying to make a living as a freelancer! The Australia-US tax treaty is actually quite favorable for our type of work, so it's definitely worth taking the time to get it right.

I've been following this discussion and wanted to add something that might help clarify the confusion between your CPA and attorney. The issue often comes down to timing and documentation requirements. Your attorney is correct that construction defect settlements are generally not taxable income when they compensate for property damage or loss of property value. However, your CPA is also right to be concerned about the 1099-MISC creating a paper trail that the IRS will expect to see reported. Here's what I'd recommend: First, get a copy of your settlement agreement and carefully review what the $87,500 was intended to cover. If it's purely for property damage/repairs, then it's likely not taxable up to your basis in the property. Second, contact the builder with a polite but firm request for a corrected 1099-MISC, explaining that construction defect settlements for property damage aren't reportable income under IRS guidelines. If the builder refuses to correct the 1099, you'll need to report the income on your return but then subtract it out with proper documentation (Form 8275 disclosure statement explaining your position). This protects you from audit issues while still claiming the correct tax treatment. The key is having solid documentation - your settlement agreement, any correspondence with the builder, and receipts for actual damages. Don't let the 1099-MISC force you into paying taxes you don't legally owe, but make sure you handle it properly to avoid IRS complications down the road.

I'm dealing with a very similar situation and wanted to share what I've learned from researching this extensively. The confusion between your CPA and attorney is actually pretty common because construction defect settlements sit at the intersection of property law and tax law. From what I've found, the key factors are: 1) What specifically was the settlement for (property damage vs. other damages), 2) Whether it exceeds your basis in the property, and 3) How to handle the 1099-MISC mismatch with the IRS. Based on the responses here, it sounds like your best approach is to first try getting the builder to issue a corrected 1099 or at least a letter acknowledging it was issued in error. If that fails, the Form 8275 route with detailed documentation seems to be the safest way to avoid paying taxes you don't owe while staying compliant. One thing I'd add - make sure you have a clear breakdown of what your $87,500 settlement actually covered. If any portion was for non-property damages (like emotional distress, punitive damages, or lost use), those parts might have different tax treatment even if the property damage portion isn't taxable. Document everything and keep all your settlement paperwork organized. From what others have shared, the IRS may question it later, but having solid documentation upfront makes resolving it much easier.

Make sure you also consider other tax benefits when planning this! My ex and I alternated claiming our daughter during college, but we didn't realize it would affect things like: 1. Filing status (head of household vs. single) 2. Earned Income Credit 3. Child Tax Credit (until age 17) 4. Higher education credits (American Opportunity Credit is worth up to $2,500) The parent NOT claiming the child in a given year should adjust their W-4 withholding at work to account for the change in tax situation that year. Also, I think one of you might be misunderstanding the savings bond education exclusion. You can only exclude the interest if the bonds are in YOUR name (not the child's) and you use them for qualified education expenses. But you also need to meet income limits, which phased out at like $98k-$128k for single filers last time I checked.

This is such great advice from everyone! I'm going through a similar situation with my ex, and reading through all these responses has been incredibly helpful. One thing I'd add is to make sure you coordinate the timing of when you complete Form 8332 each year. We learned the hard way that if the custodial parent doesn't get the form to the non-custodial parent early enough in the tax year, it can create complications when filing. Also, I'd strongly recommend sitting down together (or communicating through email if that works better) to map out a 4-year plan before your son starts college. Figure out which parent will claim him each year, and factor in things like: - Who will be using 529 funds or savings bonds in which years - Any expected changes in income that might affect education credit eligibility - Whether either parent might remarry (affecting household income thresholds) We created a simple spreadsheet showing the projected tax benefits for each scenario over all four years, and it made the decision much clearer. Having it all planned out in advance has eliminated any confusion or arguments during tax season. One last tip - keep copies of all Form 8332s and any written agreements you make. The IRS can ask for documentation if they ever question who has the right to claim the dependent in a given year.

Hey! I'm dealing with a similar situation right now and this thread has been super helpful. I just started selling on a few different platforms and was totally overwhelmed by the tax implications. One thing I'm still confused about though - if I'm using multiple platforms (like feetfinder, OnlyFans, etc.), do I need to fill out separate T2125 forms for each one, or can I combine all the income from different platforms into one business activity? Also, for anyone who's been doing this for a while - what's the best way to track payments that come in at different times? Sometimes platforms hold payments for a week or two, so I'm not sure if I should record income when I earn it or when it actually hits my account. Don't want to mess up my record keeping from the start! Thanks for all the great advice in this thread - definitely feel more confident about handling this properly now.

This is such a common question and I'm glad you're being proactive about it! I went through the exact same confusion when I started earning from similar platforms. The key thing to remember is that in Canada, ALL income must be reported regardless of the source or amount - there's no minimum threshold. Even if you only make $50, technically it should be on your tax return. The good news is that as self-employment income, you can deduct legitimate business expenses against it. Since you're in Ontario, you'll report this on your T1 return using Form T2125. Some expenses you can likely deduct include: - Portion of your internet/phone bills used for business - Any equipment purchases (camera, lighting, props, etc.) - Marketing costs if you promote yourself My advice: start tracking everything from day one. Keep a simple spreadsheet with your monthly earnings and any related expenses. Set aside about 25-30% of what you earn for taxes. And don't stress too much - once you get the hang of it, it's really not that complicated! The CRA would much rather see you reporting everything properly from the start than trying to figure it out later.