What tax software are you guys using for multi-state returns? I tried doing mine with TurboTax last year when I worked in 3 states and it got really expensive really fast because they charge extra for each state.

Just wanted to add another perspective from someone who's been through this exact situation multiple times. I've been a digital nomad for 3 years now with W2 income and have had to navigate this mess annually. A few additional tips that might help: 1. Start keeping a detailed location log NOW for next year - even a simple note in your phone each day saves massive headaches later. I use a shared Google Sheet that automatically timestamps entries. 2. Some states have "safe harbor" provisions where if you work less than a certain number of days (often 14-30), you might not owe taxes there. Worth checking each state's specific rules. 3. Don't forget about local taxes too! Some cities (like NYC) have their own income taxes on top of state taxes if you work there. 4. Consider talking to your employer about updating your state withholding if you plan to work in tax states regularly. Many payroll systems can handle multi-state withholding if you give them a heads up. The workday calculation method mentioned earlier is definitely the standard approach. Keep all those receipts and booking confirmations - even if you don't think you'll need them, having a paper trail is invaluable if questions come up later.

Has anyone considered the aggregation election for rental properties? If your client has multiple rentals and some are profitable while others show losses, electing to aggregate them as a single business for QBI purposes might be beneficial. This way, you're properly reporting everything on Form 8995, but the losses and profits offset each other. The requirements for aggregation are in Reg. 1.199A-4, and you need to meet the 50% common ownership test, plus at least 2 of the 3 factors (similar businesses, shared resources, or interdependence). For many clients with multiple rentals in the same area, this might be a viable approach.

I've been following this discussion with great interest as I've encountered similar dilemmas with my rental property clients. One approach I've found helpful is creating a clear decision matrix for each client that documents the factors supporting Section 162 trade or business status. For each rental property, I evaluate: (1) hours per week spent on management activities, (2) whether they use a management company or handle operations directly, (3) frequency of tenant interactions, (4) involvement in maintenance and repairs, and (5) marketing efforts for vacant units. I document this analysis in the client file regardless of whether I ultimately include the activity on Form 8995. What's helped me sleep better at night is being consistent in my application of these criteria across all clients. If the facts support Section 162 treatment, I include the activity on Form 8995 whether it shows a profit or loss. The tax code doesn't give us the luxury of cherry-picking only profitable QBI activities. That said, I do make sure clients understand the impact on their current-year QBI deduction when rental losses are involved. Sometimes we discuss strategies like timing of repairs or equipment purchases to help manage the overall QBI picture across multiple business activities.

Does anyone know if distributions from an HSA show up on the W-2 somewhere? I used some of my HSA funds for medical expenses last year but don't see that reflected anywhere on my W-2.

Great question! I had the same confusion when I first got an HSA. The code W in box 12b is definitely your HSA contributions, and Connor Murphy's explanation above is spot on. One thing that helped me understand it better: think of your W-2 as showing you what already happened tax-wise during the year. The $3,875 with code W was money that never got taxed as income - it went straight to your HSA before taxes were calculated. That's why your box 1 wages are lower than your actual gross pay. Form 8889 is basically just telling the IRS "hey, here's confirmation of those HSA contributions you already gave me a tax break for." You're not getting taxed on it again or getting an extra deduction - you're just documenting it. The real tax magic already happened when the money went into your HSA pre-tax throughout the year via your paychecks and employer contributions.

One thing nobody's mentioned - make sure you fill in your UK National Insurance number in the foreign tax identification section. That's a common mistake that causes forms to get rejected. And double check your date format - the US uses MM/DD/YYYY format while we use DD/MM/YYYY in the UK.

Just wanted to add some reassurance from someone who went through this exact same worry! I was terrified about signing the W8-BEN when I first started investing in US stocks about 2 years ago. I kept thinking "what if I mess up my taxes or get in trouble with the IRS?" The reality is it's incredibly straightforward. Your broker will guide you through it, and as others have mentioned, you're actually protecting yourself by completing it. I've never received any correspondence from the IRS directly - everything goes through your broker. The only "gotcha" I experienced was when I moved house in the UK and forgot to update my address on the form. My dividends got withheld at the wrong rate for a few months until I noticed and updated it. But even that was easy to fix through my broker's platform. Don't let the fear hold you back from diversifying into US markets - it's really not as scary as it seems when you're new to it!

Just want to add another perspective here - I work in banking and see these "TCS TREAS 449 MISC PAY" deposits fairly regularly. The code specifically indicates miscellaneous Treasury payments that fall outside normal tax refund processing. In most cases I've seen, these are legitimate payments from: - Amended returns that took years to process - Interest payments on delayed refunds (the IRS pays interest when they take too long) - Automatic adjustments when their systems catch calculation errors - Various tax credits that got processed separately from your main return The key thing is that the IRS almost never sends money by accident - their systems have multiple checks. But definitely verify what it's for before spending it. The advice about checking your transcripts and looking for any IRS mail is spot on. One more tip: if you do need to contact the IRS directly, try calling early morning (7-8 AM) when the phone lines first open. You'll have much better luck getting through than during peak hours.

I'm glad you figured out what your deposit was for! This is actually a pretty common situation that more people should know about. The IRS processes millions of tax returns and sometimes their automated systems catch errors or missed credits that taxpayers didn't claim. For anyone else dealing with mysterious IRS deposits, here's what I've learned from similar situations: 1. **Don't panic** - The IRS rarely sends money by mistake. Their systems have multiple verification steps. 2. **Check your mail thoroughly** - As mentioned above, they usually send an explanation letter (CP notices) that might look like junk mail at first glance. 3. **Pull your tax transcripts** - You can get these free from the IRS website and they'll show exactly what adjustments were made to your account. 4. **Education credits are tricky** - These are one of the most commonly miscalculated credits. The IRS often finds taxpayers qualified for more than they claimed, especially with the American Opportunity Credit. 5. **Keep records** - Save any letters or documentation explaining the deposit. You'll want this for your tax files. The fact that yours was related to education credits makes perfect sense. Those calculations can be complex with income limits, qualified expenses, and different credit types. The IRS computers are actually pretty good at catching when taxpayers left money on the table with these credits. Enjoy your unexpected windfall - it's legitimately yours!