Pro tip: set up alerts with your bank. way better than refreshing wmr every 5 mins like a clown 🤡

Congrats on getting your 0405! I'm still waiting on mine but this gives me hope. Quick question - did you file early or around the usual time? Trying to figure out if filing date affects when the 0405 shows up. Also curious if anyone knows what happens if your bank rejects the deposit - does it automatically switch to a paper check or do we have to do something?

Quick tip on the PayPal/1099-K situation - PayPal is required to issue 1099-Ks for annual payments over a certain threshold, but that doesn't mean you have to pay taxes twice! When I enter my tax info, I always: 1) Enter the 1099-NEC first 2) When TurboTax asks about 1099-K, I say yes, I received one 3) When it asks if this income was already reported elsewhere, I say YES 4) It'll then ask you to identify which income it duplicates This way everything is properly documented but not double-counted. Hope that helps!

Based on your situation, here's what I'd recommend: **For the teaching income ($1,875.50):** You're absolutely right to only report this once. Use the 1099-NEC from the makerspace and ignore the PayPal 1099-K for the same payments. **For the $31.75 reimbursement:** This shouldn't be included as income since it was reimbursement for out-of-pocket expenses you incurred for the classes. You can subtract this from your total income, but then you also can't claim those material costs as expenses. **For the $25 hobby sale:** Unfortunately, yes, you need to report this as "Other Income" even though you lost money overall. The elimination of hobby expense deductions really stings in situations like yours. **Consider the business angle:** Given that you teach classes regularly at the makerspace, keep records, and have expertise in woodturning, you might actually qualify to treat this as a business rather than a hobby. This would let you use Schedule C and deduct your teaching-related expenses against your income. The key is showing profit motive - even if you're not profitable yet, if you're operating in a businesslike manner, it could qualify. I'd suggest talking to a tax professional about whether your teaching activities meet the business criteria. It could save you money and better reflect the reality of what you're doing.

One thing nobody mentioned - if you have foreign bank accounts over $10,000 combined at any point during the year, you might need to file an FBAR form (FinCEN Form 114), even if you don't need to file a tax return. This is separate from the tax filing and has different rules.

Just want to add another perspective here - I moved from Ireland on an H1B in November 2023 (so similar dual status situation) and had zero US income during my brief resident period. I didn't file anything for 2023 and never heard from the IRS. However, what I wish I'd known then is that establishing good recordkeeping from day one is really important. Even though you don't need to file, I'd recommend keeping documentation of your arrival date, visa type, and evidence that you had no income during the resident portion. This becomes useful context when you file your first full-year return in 2025. Also worth noting - if you're planning to apply for citizenship eventually, having a clean compliance record from the start (even if it's just documentation showing you correctly determined no filing was required) can be helpful during the naturalization process. The USCIS sometimes asks about tax compliance history.

The fundamental difference is corporate governance and tax structure. Public company CEOs who take $1 salaries have their compensation packages approved by independent boards of directors and compensation committees, which provides legitimacy in the eyes of regulators. Their stock options and RSUs are still subject to ordinary income tax rates when exercised/vested, plus the company pays payroll taxes on the fair market value. Small business owners face different scrutiny because S-Corp distributions avoid self-employment taxes (15.3% savings), while CEO stock compensation doesn't provide the same tax avoidance opportunity. The IRS specifically targets owner-operators who might abuse this structure. The "reasonable compensation" test for small businesses considers: your role and responsibilities, hours worked, business profits attributable to your personal services vs. capital, and what you'd pay a non-owner to do your job. There's no magic percentage - it's truly case-by-case based on these factors. Bottom line: Big company CEOs aren't actually avoiding taxes with their structure, they're just deferring timing. Small business owners using minimal salaries are potentially avoiding payroll taxes entirely, which is why the IRS watches it more closely.

This is a great question that highlights a common misconception about CEO compensation structures. The key difference isn't that CEOs get special tax treatment - it's that their compensation is still fully taxable, just structured differently for legitimate business reasons. When a CEO takes $1 salary plus stock options, those options are taxed as ordinary income when exercised (often at rates up to 37%), plus the company pays payroll taxes on that compensation. The board of directors approves this structure based on performance incentives and shareholder alignment, not tax avoidance. For small business S-Corp owners, the IRS is specifically watching for abuse of the salary vs. distribution split because distributions avoid the 15.3% self-employment tax. That's real tax savings that CEO stock compensation doesn't provide. The "reasonable compensation" standard considers your actual role, industry benchmarks, hours worked, and how much profit comes from your personal efforts vs. business assets. A marketing agency owner generating most revenue through personal services will need higher salary allocation than someone whose profits come primarily from equipment or passive investments. My advice: document your compensation decision with industry data and keep records showing your reasoning. The IRS respects good faith efforts to comply, even if your exact number might be debatable.

Don't forget that if you sell your rental property for a gain in the future, any suspended passive losses from previous years can be used at that time. So even if you can't use the losses now against your capital gains, they're not lost forever. I made this mistake years ago thinking my rental losses were just gone, but when I sold my property, my accountant was able to apply all those carried-forward losses against the gain from the sale. Saved me thousands!

This is a really common misunderstanding! I had the exact same confusion when I first started dealing with rental properties and stock trading. The key thing to remember is that the IRS has very specific definitions for different types of income, and they don't always match what we'd think of as "passive" in everyday language. Your capital gains from stock trading fall under "portfolio income" while rental activities are "passive activities" - they're in completely separate buckets for tax purposes. That said, don't get discouraged about those rental losses. As others mentioned, if your MAGI is under $100k, you might still be able to deduct up to $25k of those losses against your other income this year. And even if you can't use them now, they'll carry forward and can be incredibly valuable when you eventually sell the property. I'd definitely recommend keeping detailed records of all your rental expenses and losses - you'll thank yourself later when tax time comes around in future years!