Make sure you're considering the "tie-breaker" rules in Article 4(2) of the treaty! As a dual citizen, these determine where your tax residency is primarily located for treaty purposes. Also, are you reporting your income properly in NZ? I think they call it "schedular payments" for contractor income there, which has its own rules.

This is exactly the kind of confusing situation that kept me up at night when I first moved to NZ as a contractor! The treaty language is genuinely difficult to parse, but here's what I've learned after going through this myself: You're correct that as a US citizen, you can't escape US tax obligations regardless of the treaty - that saving clause in Article 1(3) is ironclad. However, you have several strategies to minimize double taxation: 1. **Foreign Earned Income Exclusion (Form 2555)**: Since you're living in NZ full-time, you likely qualify to exclude up to $120,000 of your 1099 income from US taxation. This is often better than relying on foreign tax credits. 2. **Totalization Agreement**: Apply for a Certificate of Coverage from NZ's Ministry of Social Development to potentially avoid US self-employment taxes (15.3%) since you're contributing to NZ's social security system. 3. **NZ Tax Planning**: In NZ, your US contractor income is foreign-sourced income. Make sure you're handling the schedular payment requirements correctly - the IRD has specific rules for this. The key is layering these strategies properly. I'd recommend tackling the FEIE first since it's the most straightforward, then working on the totalization agreement for SE tax relief. Don't try to rely solely on the treaty provisions - they're mostly neutered by the saving clause for US citizens.

Just gonna say this: if you're waiting on the IRS to contact you by mail, sign up for Informed Delivery with USPS. You'll get emails showing what mail is coming each day, so you'll know when that IRS letter finally arrives. Saved me from checking my mailbox obsessively for weeks.

I'm going through the exact same thing right now! Filed in early April, accepted same day, then got hit with topic 151 about 3 weeks ago. My transcript shows codes 570 and 971 just like yours. I've been checking my mail religiously but nothing yet. Really hoping it's just a simple verification and not something more complicated. The waiting is driving me crazy, especially since I was counting on that refund for some unexpected car repairs. Following this thread closely to see what everyone else's experiences have been!

Has anyone used TurboTax to handle this excess contribution situation? I'm trying to figure out if it walks you through this correctly or if I need something more specialized.

I'm dealing with a similar situation right now - PhD student who made excess Roth IRA contributions because I didn't realize my research fellowship didn't count as earned income. What really helped me was getting organized with all my tax documents first. Make sure your roommate gathers her 1098-T from the university, any 1099-MISC forms for the stipend, and her W-2 from the TA position that was mentioned. Having all these documents in one place makes it much easier to calculate exactly how much she can legitimately contribute based on her actual earned income. I'd also suggest she call her IRA provider (Fidelity, Vanguard, etc.) directly to ask about their process for "return of excess contributions." Each company has slightly different procedures and timelines, so getting the specifics from them upfront can save a lot of back-and-forth later. Most of them are pretty used to handling this situation with grad students!

Has anyone used Cash App taxes (formerly Credit Karma Tax)? I heard its completely free for both federal and state filing, even with 1099 income.

I've been using TurboTax Self-Employed for the past two years with a similar setup - W-2 from my main job plus 1099-NEC income from freelance web design work. While it's definitely more expensive than the options others have mentioned (around $120 for federal + state), the guidance for business deductions is really comprehensive. What I like most is how it walks you through every possible deduction category and asks specific questions about your business. For coaching, it would prompt you about things like continuing education, professional memberships, travel expenses, and equipment purchases. The mileage tracker integration with the mobile app is also pretty seamless - you can categorize trips as business/personal right from your phone. That said, after reading about some of these cheaper alternatives, I might try FreeTaxUSA next year to see if I can get the same results for less money. The key thing is making sure whatever you use properly handles Schedule C for your coaching income so you get the full tax benefit on those business expenses.

Quick question about Form 8606 - do I need to attach any proof of my contribution history when I file? I'm in a similar situation with Roth contribution withdrawals and wondering how the IRS verifies I'm only withdrawing contributions.

Just want to confirm what others have said - yes, you can absolutely leave Parts 1 and 2 blank on Form 8606 when you're only withdrawing Roth IRA contributions. I had the exact same situation last year and was worried about leaving sections blank, but my CPA assured me it was correct. Part 1 is specifically for nondeductible traditional IRA contributions, and Part 2 is for Roth conversions. Since you're dealing with direct Roth contribution withdrawals, only Part 3 applies to your situation. The key thing is making sure you accurately complete Part 3, especially line 19 where you report your total contributions (basis) in all your Roth IRAs. One tip: if you've made contributions to multiple Roth IRA accounts over the years, you need to aggregate all of them when calculating your basis - it's not done on an account-by-account basis. Keep good records of all your contribution amounts and dates in case the IRS ever has questions down the road.