As someone who went through this exact process a few years ago, I want to emphasize something that really helped me: keep detailed records of EVERYTHING from day one. Create a simple spreadsheet tracking: - Your arrival date and every time you leave/re-enter the US - All income sources (stipend, TA/RA payments, scholarships, etc.) - Any tax documents you receive (1042-S, 1098-T, etc.) - Communications with your university's payroll about tax treaty benefits The record-keeping becomes absolutely crucial when you transition from nonresident to resident alien status after 5 years. I wish someone had told me this earlier - it would have saved me hours of trying to reconstruct my tax history. Also, regarding your question about retirement plans: even though you can participate in university retirement plans as an F1 student, be aware that if you eventually return to your home country, accessing those funds early may trigger penalties. Consider whether it makes sense for your specific situation. One last tip: if your home country has a totalization agreement with the US, keep records of your Social Security contributions once you become a resident alien. This can help you qualify for benefits in either country later, even if you don't stay in the US for the full 10 years typically required.

This thread has been incredibly helpful! I'm also an incoming F1 PhD student and had similar fears about making tax mistakes. Reading through everyone's experiences has been reassuring. One thing I wanted to add that might help other international students: check if your university has an International Student Services office that specifically helps with tax questions. Mine scheduled a group session just for international students before tax season, and they walked through examples of filling out Form 8843 and Form 1040NR. They also explained something I didn't know - that even if you don't owe any taxes (due to treaty benefits or low income), you still need to file these forms to maintain your nonresident status. Missing these filings can actually affect your ability to claim treaty benefits in future years. @af00013caca2 For your specific situation with the PhD stipend, definitely reach out to your graduate school's financial aid office. They should be able to tell you exactly how your funding is classified (scholarship vs. wages) and whether any portion qualifies for treaty benefits. This classification makes a huge difference in your tax liability. Also, don't forget that many states don't tax scholarships used for tuition and required fees, even if the federal government does. So even if part of your funding is taxable federally, you might save money at the state level. The learning curve is steep, but you've got this! The international student community is usually very supportive when it comes to sharing tax experiences.

Great question! I went through the same confusion when I started trading futures. You've got the basic concept right - the 60/40 split is automatic for Section 1256 contracts like /ES and /NQ regardless of holding period. One thing to clarify: your total taxable income determines which capital gains bracket you fall into, not just your W-2 income. So if you have $65k from your job plus $20k in futures gains, you're looking at around $77k total income (after the 60/40 split calculation). This definitely puts you in the 15% long-term capital gains bracket for the 60% portion. Also, don't forget about the mark-to-market rule - any open futures positions on December 31st are treated as if you closed them for tax purposes. So even if you're holding contracts into the new year, you'll owe taxes on the unrealized gains from those positions. Make sure you're keeping good records throughout the year. Form 6781 is what you'll need to file for the Section 1256 treatment, and most brokers will provide you with a summary, but it's good to track things yourself too. Since you're 8 months in, you should definitely consider making estimated quarterly payments if you haven't already. The underpayment penalties can add up quickly on trading profits.

I've been trading futures for about 2 years now and wanted to share something that really helped me understand the tax implications better. The 60/40 treatment is definitely a huge advantage, but one thing that caught me off guard my first year was how the mark-to-market rule affects your cash flow planning. Since you're taxed on unrealized gains at year-end, you could potentially owe taxes on profits you haven't actually "cashed out" yet if you're holding positions. I learned this the hard way when I had some profitable /NQ positions going into December and suddenly owed taxes on gains I was planning to let ride into the next year. Now I make sure to either close profitable positions before year-end if I don't want the tax hit, or I set aside cash throughout the year to cover potential taxes on open positions. It's actually made me a more disciplined trader because I have to think about the tax implications of keeping positions open across year boundaries. Also, since you mentioned you're 8 months in, definitely start making those quarterly payments. The penalty for underpayment isn't huge, but it's annoying and completely avoidable. I use the safe harbor rule - just pay 100% of last year's total tax liability spread across four quarters, and you're protected from penalties even if you end up owing more.

Just wanted to add my experience to help others who might be in similar situations. I got bumped from a flight to Denver last year and received $1,500 in cash compensation. Like many of you, I initially thought it might not be taxable since it felt like reimbursement for the inconvenience. I ended up reporting it as "Other Income" on Schedule 1, line 8z of my 2024 tax return. The airline did send me a 1099-MISC in January, so they definitely reported it to the IRS. What surprised me was that I had to pay taxes on the full amount - there's no deduction for the inconvenience or lost time, it's just treated as regular income. For anyone dealing with this situation, my advice is to set aside about 20-25% of the compensation amount for taxes (depending on your tax bracket). I wish I had known that when I spent most of the money right away! The tax bill was a bit of an unpleasant surprise when I filed. Also, make sure to keep all the paperwork from the airline - not just for tax purposes, but in case there are any questions later. The documentation should clearly state the reason for the compensation and the amount received.

This is exactly the kind of situation that catches people off guard! I work in tax preparation and see this come up more often now with increased flight disruptions. Your $2,000 cash compensation is definitely taxable income that needs to be reported. A few practical tips from what I've seen: 1. You'll likely receive a 1099-MISC from the airline since it's over $600 - keep an eye out for it in January/February 2. Report it as "Other Income" on Schedule 1, line 8z of your tax return 3. Set aside about 22-24% of the $2,000 for taxes (so around $440-480) since it will be taxed at your marginal rate 4. Keep all documentation from the airline - the original compensation letter, any emails, etc. The timing works in your favor though - since you received it in 2024, you have until you file your 2024 taxes (early 2025) to prepare for the tax impact. Don't make the mistake of spending it all and being surprised by the tax bill later! One silver lining: if you had any unreimbursed expenses related to the delay (meals, hotel if you had to stay overnight), those might offset some of the tax burden depending on your situation.

This discussion has been incredibly thorough and helpful! As someone who regularly receives PayPal F&F payments from international friends for gaming subscriptions and occasional item purchases, I was getting worried about potential tax implications. The consistent message throughout this thread is really reassuring: the IRS cares about the substance of transactions, not which PayPal button was clicked. Since these are genuine cost-sharing arrangements and reimbursements between actual friends (not business activities), they're personal transfers that aren't taxable income. What I found most valuable were the practical documentation suggestions - keeping simple records like screenshots of group conversations about shared expenses, receipts showing actual costs, and basic notes about payment purposes. This creates a clear trail showing these are legitimate personal transfers without overcomplicating the record-keeping. The international aspect doesn't change anything for small personal amounts, and the PayPal reporting threshold changes that everyone discusses are really targeting business operations, not friends splitting Netflix subscriptions or shipping costs. Miguel, based on your description of gaming cost splits and snack shipping reimbursements with actual friends, you're dealing with textbook personal transfers. The amounts you mentioned ($200-300 every few months) across multiple friends for legitimate shared expenses clearly fall into non-taxable territory. Thanks to everyone who shared their experiences - it's great to see such a supportive community helping each other navigate these questions responsibly!

This has been such a comprehensive and helpful discussion! I'm in a very similar situation with friends from Europe and Asia who occasionally send me money through PayPal F&F - mostly for our shared Discord server costs, splitting streaming subscriptions, and reimbursements when I help them get specialty items from the US. What's really stood out to me throughout this thread is the consistent guidance from multiple perspectives: the IRS focuses on the actual nature of transactions, not which PayPal button was used. Since these are genuine cost-sharing arrangements between real friends (not business transactions), they qualify as personal transfers that aren't taxable income. The documentation suggestions have been particularly valuable - I love the simple phone note system and keeping screenshots of group conversations that show the context of these payments. It creates a clear record without making it overly complicated. One additional point I'd add based on my experience: I've found it helpful to be consistent about only using F&F for actual personal transfers. If there's ever any situation where I'm providing a service or selling something (even to friends), I make sure to use G&S and report it properly. This keeps a clear distinction between personal cost-sharing and any actual income-generating activities. Miguel, your situation with gaming costs and snack shipping reimbursements sounds exactly like what personal transfers are meant to cover. The amounts you described spread across multiple friends for legitimate shared expenses should give you peace of mind that you're handling this correctly!

Has anybody used the supplemental rate calculator on the IRS website? I tried using it for my bonus but I think I'm doing something wrong because it says my withholding should only be around 35% total but my company took out almost 50%.

This is completely normal and you're not alone! The 52% withholding you're seeing is exactly what I experienced with my last bonus. The key thing to remember is that this is just withholding - it's not your actual tax rate on the bonus. Your employer is required to withhold at the supplemental wage rate, which is 22% for federal taxes, plus your state rate, plus payroll taxes (Social Security and Medicare). In high-tax states, this can easily add up to 50%+ in total withholding. The good news is that when you file your taxes, your bonus gets added to your regular income and taxed at your marginal rate. Since you make $95k, your effective tax rate on the bonus will likely be much lower than 52%. You'll probably get a decent refund when you file, especially if your regular paycheck withholding is also set up correctly. I'd recommend keeping track of your total withholding throughout the year so you can adjust your W-4 if needed to avoid a massive refund (which is basically giving the government an interest-free loan). But for now, just know that most of that extra withholding will come back to you!