Has anyone handled the situation where an employee makes an 83(b) election but then leaves before the shares fully vest? Our standard RSA agreement has a clawback provision for unvested shares, but I'm unclear on the tax implications for the employee and our reporting requirements in that scenario.

Quick question about RSA tax reporting - which tax forms need to be filed with the IRS when RSAs are initially granted? Is there something similar to the 3921 for ISOs?

Has anyone else had this issue with the residency calculator in TurboTax? I entered all my info (F1 status, dates, etc) and it told me I was a full-year resident even though I only hit the substantial presence test in September. When I tried H&R Block instead, it said I was dual-status. Super confused now!

I went through the exact same confusion last year! The key thing to understand is that when you become a tax resident mid-year due to the substantial presence test, you have two options: 1. **Dual-status filing**: You're a nonresident for Jan 1 - May 14, then a resident for May 15 - Dec 31. You'd file Form 1040NR for the nonresident portion and Form 1040 for the resident portion. 2. **First-Year Choice election**: You can elect to be treated as a full-year resident, which lets you file just one Form 1040 and take the standard deduction. The reason you're seeing conflicting information is that different sources emphasize different options. Your university software is probably assuming you'd benefit from the First-Year Choice election (which is often true for students), while other sites are giving you the default dual-status rule. For the Social Security taxes, that's separate from income tax residency - once your 5-year F1 exemption expires, you owe Social Security taxes on ALL wages earned after that date, regardless of which filing status you choose. I'd suggest running the numbers both ways to see which gives you a better outcome. The First-Year Choice usually works better if you have significant income throughout the year and want to take the standard deduction, but dual-status might be better if you have large scholarship amounts that qualify for treaty benefits during the nonresident period.

To add to this convo - don't forget that if you do form an LLC and keep it as a disregarded entity (basically taxed as a sole prop), you can still deduct the annual LLC fee that most states charge as a business expense on Schedule C! That's separate from your state income taxes. I pay $800/year to California for my LLC and that amount IS deductible as a business expense.

I think we're all overcomplicating this. Just use an accountant people! I tried doing my own taxes as a sole prop for 2 years and missed so many deductions. Paid $650 for an accountant last year and she found over $3k in deductions I missed. She also explained that some business structures have higher audit risk than others so it's not just about the deductions.

Try contacting your local taxpayer advocate service. They helped me bypass the whole phone nightmare

I had the exact same issue last month! The TPP phone line is absolutely swamped right now. Here's what finally worked for me: 1. **Early morning calls**: Call at exactly 7:00 AM your local time. Set multiple alarms if needed. The wait times are shortest right when they open. 2. **Local IRS office**: This was my lifesaver. Go to irs.gov/help/contact-your-local-irs-office and find your nearest Taxpayer Assistance Center. You can walk in with your ID and they'll verify you on the spot. Way faster than waiting for mail or playing phone tag. 3. **Taxpayer Advocate Service**: If you've been waiting over 30 days total, contact them. They can expedite your case and bypass some of the normal waiting periods. The verification process is frustrating but it's there to protect you from identity theft. Don't give up - you'll get through it! The in-person route saved me about 3 weeks of waiting.

Has anyone actually gone through an IRS audit with this situation? I'm worried about taking this approach and then getting flagged for audit because the IRS system doesn't understand what I'm trying to do. I mean, technically we're following the rules, but it seems like we're doing something the forms weren't designed for. Just wondering if anyone has real experience with how the IRS handles this in practice.

I've been following this discussion with great interest since I'm in a very similar situation as an expat with capital loss carryforwards. Based on what I'm reading here, it sounds like there are multiple valid approaches, but they all require very careful documentation. One thing I'm noticing is that everyone seems to agree on the importance of creating a clear paper trail with detailed statements attached to your returns. Whether you use the tax benefit rule approach that Lydia mentioned, or preserve the full loss with an explanatory statement like others have suggested, the key seems to be transparency with the IRS about what you're doing and why. I'm leaning toward calling the IRS directly using that Claimyr service several people mentioned to get official guidance for my specific situation. It seems like getting confirmation directly from an IRS agent would give me the most confidence in whatever approach I choose. Has anyone found specific IRS publications or guidance documents that address this scenario? I'd love to have some official written guidance to reference in addition to the verbal confirmation from phone calls.