Quick heads up about Form 1116 - make sure you're putting your foreign income in the correct category. Employment income goes in the "General Category Income" basket, not the "Passive Income" category. I messed this up on my first dual-status return and had to amend it. Also, don't forget to convert your foreign taxes paid using the same exchange rate method you used for the income!

One additional consideration for your dual-status situation - make sure you're aware of any potential treaty benefits between the US and Canada that might affect your tax calculation. The US-Canada Tax Treaty has specific provisions for residents who change status during the year, and there might be tie-breaker rules that could impact how you're treated for certain types of income. Also, since you mentioned you were working remotely for your Canadian employer while being a US tax resident, you'll want to verify that your employer properly handled any Canadian tax withholdings during that period. Sometimes employers don't adjust withholdings when employees become non-residents for Canadian tax purposes, which could affect your foreign tax credit calculations. Have you considered whether you need to file any additional Canadian forms (like a departure tax return) since you became a non-resident of Canada? The timing of your tax residency changes in both countries can create some complex interactions that might affect your overall tax liability.

Has anyone actually calculated how much you'd save/lose by taking the lower itemized deduction? I'm trying to figure out if it's even worth my time to run the numbers.

This is such a great question that I think many taxpayers struggle with! Beyond the excellent points already mentioned about state taxes and AMT considerations, there's another scenario worth considering - charitable contribution bunching. Sometimes taxpayers will choose to itemize in a "low" year (where itemized deductions are less than standard) as part of a multi-year strategy. For example, if you typically donate $8,000 annually to charity, you might donate $16,000 every other year and $0 in the alternate years. In the $16,000 year, you'd have enough to itemize meaningfully, but in the $0 year, your itemized deductions might be lower than standard - yet you'd still choose to itemize to maintain consistency in your tax planning strategy. Also, don't forget about the "bunching" strategy for medical expenses. Since medical expenses are only deductible above 7.5% of AGI, some people time their elective medical procedures to bunch expenses into one tax year, which might require itemizing even when the total is lower than standard deduction in order to set up the following year's bigger deduction. The key is looking at your tax situation holistically across multiple years and considering both federal AND state implications!

I learned this the hard way... kept all the profits in my S Corp thinking I wouldn't owe taxes until I took distributions. Got DESTROYED with a huge tax bill and no cash to pay it because all the money was still in the business account. Don't make my mistake!

This is exactly why proper planning is so important with S Corps! Since you're getting taxed on the profits regardless of whether you take distributions, you need to make sure you have enough cash flow to cover your tax liability. One strategy I've seen work well is to take quarterly distributions specifically to cover your estimated tax payments on the S Corp income. That way you're not stuck with a big tax bill and no cash to pay it like Keisha mentioned. Also, remember that if you're building reserves for business expenses, those retained earnings increase your basis in the S Corp, which can be helpful if you ever need to take losses or sell the business. But definitely don't let tax planning take a backseat to cash flow management - you'll need liquidity to pay those taxes!

Just wanted to add my experience since I was in almost the exact same situation last year! I was buying a vintage Rolex and had the same panic about wire transfers and IRS reporting. After doing tons of research and talking to my bank, here's what I learned: You're absolutely right to keep good records, but you don't need to stress about special reporting. The wire transfer itself isn't something you report to the IRS - that's all handled automatically by the banks. What really helped calm my nerves was keeping a simple paper trail: I saved the wire transfer confirmation, the purchase receipt, and a brief note in my files about what the transfer was for. My banker told me this was more than sufficient for any future questions. The jewelry store also gave me a detailed invoice that clearly showed the purchase amount and payment method. Between that and my bank records, everything was perfectly documented without any special forms or reporting on my end. One tip: ask your bank about any wire transfer fees beforehand. Mine charged $25 for domestic wires, which wasn't a big deal given the purchase amount, but it's good to know upfront. The whole process was actually much smoother than I expected once I got past the initial anxiety!

As someone who works in banking compliance, I can confirm what others have said - you don't need to personally report the wire transfer to the IRS. The Bank Secrecy Act requires us (the banks) to file Currency Transaction Reports for certain large transactions, but that's our responsibility, not yours. What you should know is that wire transfers over $3,000 are already tracked by banks through the Bank Secrecy Act, and transfers over $10,000 trigger additional reporting requirements - but again, all handled by the financial institutions involved. Your main job is just to keep good records for your own files. Save the wire transfer receipt, the purchase invoice from the jewelry store, and maybe a simple note about what the purchase was for. This documentation will be helpful if you ever need to explain the transaction for any reason (insurance claims, future sales, etc.). The jewelry store will likely file Form 8300 since they're receiving over $10,000, but that's standard business practice for them. You're just making a legitimate purchase with legally earned money - there's nothing suspicious or reportable about that from your end. One practical tip: call your bank ahead of time to let them know about the large wire transfer. Some banks will put a temporary hold on unusual activity, so giving them a heads up can prevent any delays or complications on the day you want to make the purchase.

Has anyone else noticed that the 1098T is often wrong for international students? My university messed up mine last year and included my TA stipend as a "scholarship" even though it was actually employment income reported on a W-2. Double check everything on your form!

I went through something very similar my first year as an international student! One thing that really helped me was creating a detailed spreadsheet tracking ALL my educational expenses - not just tuition. Things like mandatory student fees, required textbooks, lab equipment, and even technology fees can count as qualified educational expenses to offset that scholarship income. Also, definitely document your sponsor arrangement properly. Since you're repaying them the exact amount, this sounds more like an interest-free loan than a scholarship. If you can get something in writing from your sponsor confirming this is a repayment arrangement (even a simple letter), it could change your tax situation significantly. The university might have incorrectly categorized this on your 1098T. One last tip - make sure you're checking if your home country has a tax treaty with the US that might provide benefits for scholarship income. Many international students miss this and end up overpaying. Good luck with your filing!