If you're filing as a resident alien after passing the substantial presence test, don't forget about FBAR requirements! If you had foreign bank accounts with a combined total of over $10,000 at any point during the year, you need to file an FBAR (FinCEN Form 114). This is separate from your tax return and has really steep penalties if you miss it.

This is such a common situation that catches so many former international students off guard! I went through the exact same thing a couple years ago. One thing I'd add that hasn't been mentioned yet - make sure you understand the "closer connection" exception. Even if you pass the substantial presence test, you might still be able to file as a nonresident if you can demonstrate that you have a closer connection to your home country than to the US. Since you moved back to your home country in August 2024, you might qualify for this exception for the portion of the year you were back home. You'd file Form 8840 (Closer Connection Exception Statement) to claim this. It considers things like where your permanent home is, where your family lives, where your personal belongings are, etc. Also, regarding software - yes, you can generally use regular tax software like TurboTax now, but be careful because most mainstream software isn't great at handling the dual-status alien situation or treaty benefits. The specialized services mentioned above might be worth considering given your specific circumstances with the scholarship income and the mid-year move back home.

is it possible that the IRS notice is about something besides the extra withholding? sometimes they send W-4s for other reasons too like if your allowances are way off from what they think you should claim. did the notice mention anything specific?

I've been through this exact situation! Got a similar notice when I increased my withholding by about $40 per paycheck. The IRS notice can be scary at first, but it's really just their way of confirming you made the change intentionally. What you did is totally normal and smart - having extra withholding helps ensure you don't owe money at tax time. The IRS automated system flagged the change because it was different from your previous withholding pattern, not because you did anything wrong. Make sure to read the notice carefully for response instructions. Usually they just want you to confirm that you authorized the W-4 change. You can typically respond by phone or mail. Don't stress about it - this is more of a security check than anything punitive. Keep doing the extra withholding if it works for your financial planning!

Quick tip from someone who works in benefits admin - check if either of your plans allows mid-year changes to FSA/HSA elections based on a "change in benefit eligibility." If her FSA is making your HSA contributions problematic, some plans allow you to adjust mid-year when you discover this kind of conflict.

I went through this exact same situation last year and here's what I learned: The key issue isn't whether you're on separate health plans, but whether her FSA can be used for your family's medical expenses when you file jointly. Since you mentioned she uses her FSA for prescriptions and doctor visits, it sounds like a general medical FSA. Even though you have separate insurance, the IRS considers her FSA as available to cover your medical expenses because you file taxes together. This technically disqualifies you from HSA contributions. However, I'd strongly recommend getting the actual plan documents from her HR department - not just asking them verbally. Look specifically for language about who can use the FSA funds. Some plans restrict usage to the employee only, which could change everything. If it turns out her FSA does disqualify your HSA, ask her benefits team about switching to a limited-purpose FSA during the next enrollment period. Many employers now offer this option specifically for situations like yours. You'd lose some FSA flexibility but gain HSA eligibility, which is often worth it given the triple tax advantage of HSAs.

I'm new to this community but experiencing the exact same issue! My refund dropped from about $3,100 last year to $2,200 this year, and I was convinced I'd made some mistake on my taxes. After reading through all these responses, I finally understand what's happening. I went back and compared my pay stubs like several people suggested, and sure enough - I was taking home roughly $80 more per paycheck this year. Over 12 months, that's nearly $1,000 that I had access to throughout the year instead of waiting for it as a refund. It's definitely a mental adjustment though! I had already mentally "spent" that expected refund on a vacation fund. Now I'm thinking about setting up an automatic transfer of that extra monthly take-home into a separate savings account so I can still have that lump sum feeling, but at least it'll be earning interest for me instead of the government. Thanks to everyone who shared their experiences - this thread probably saved me hours of confusion and worry about whether I'd filed something incorrectly!

As someone new to this community, I'm so relieved to find this discussion! I've been dealing with the exact same issue - my refund went from around $2,800 last year to just $1,950 this year, and I was absolutely convinced I had made some major error on my tax return. After reading through everyone's experiences and explanations about the withholding table changes, I finally understand what happened. I dug out my old pay stubs and compared them, and it turns out I was bringing home about $70 more per paycheck this year without even realizing it. That adds up to roughly $840 over the year, which explains a big chunk of why my refund was smaller. It's such a relief to know this is happening to so many people and that it's actually the IRS trying to make withholding more accurate rather than some mistake on my part. The "interest-free loan to the government" concept really clicked for me - I never thought about refunds that way before, but it makes total sense. I think I'm going to take the advice from some of the comments here and set up an automatic transfer for that extra monthly income into a separate savings account. That way I can still get the satisfaction of having a lump sum for spring planning, but at least it'll be earning interest for me instead of sitting with the government all year! Thanks to everyone who shared their stories - this community is incredibly helpful for newcomers like me who are just trying to figure out why their taxes seem "weird" this year.

I'm really glad I stumbled across this thread! I've been working as a tax advisor for about 8 years, and I see clients panic about Form 13873-E notices all the time. It's completely understandable - these forms look intimidating and the language is pretty technical. What you're experiencing is absolutely normal and legitimate. The Form 13873-E is the IRS's way of saying "we got your transcript request, but something wasn't filled out correctly." It's actually a good thing that the IRS has this system in place - it prevents unauthorized access to your tax information by requiring everything to be completed properly. Your HELOC timeline is a dead giveaway that this is exactly what happened. Lenders almost always request tax transcripts as part of their income verification process, and clerical errors on these forms are incredibly common. I'd estimate that about 15-20% of my clients who apply for mortgages or major loans end up getting one of these notices. The silver lining is that once your lender resubmits the corrected 4506-C, the process usually moves very quickly. In my experience, clients typically get their loan processes back on track within 3-5 business days after the correction is submitted. Don't let this stress you out over the weekend - it's really just routine paperwork cleanup that your loan officer deals with regularly!

Just wanted to add my experience as someone who works in mortgage processing. I see Form 13873-E notices daily, and your situation is textbook - HELOC application 3 weeks ago, now getting this notice. It's almost certainly just a minor error on the 4506-C form your lender submitted. The most common mistakes I see are: - Wrong date format (MM/DD/YYYY vs DD/MM/YYYY) - Missing middle initial when it's on your tax return - Checking the wrong boxes for tax year or form type - Signature issues (especially with joint filers) Your loan officer will know exactly what to do with this. They'll compare the rejection notice against their original submission, fix the error, and resubmit. Usually takes 2-3 business days to get the transcripts back once corrected. Pro tip: When you call Monday, have the 13873-E form in front of you. The error codes on it will tell your loan officer exactly what went wrong, making the fix much faster. This definitely won't delay your HELOC closing - we build buffer time into our timelines specifically for these kinds of routine corrections.