Has anyone successfully e-filed with this W-2/1042-S combination? I tried using H&R Block's software and it kept giving me errors when I entered the 1042-S information. Wonder if TurboTax or TaxAct handle it better or if I just need to file a paper return.

I'm dealing with this exact same situation right now! Working in the US for half the year then remotely from Germany. One thing I learned that might help others - make sure to check if your employer properly applied the tax treaty withholding rate on your 1042-S. The standard 30% withholding can often be reduced under tax treaties. For example, the US-Germany treaty allows for reduced rates on certain types of employment income. If your employer didn't apply the treaty rate, you can still claim the benefit when filing your return, but it means waiting longer for your refund. Also, keep really good records of which days you worked where. The IRS can be picky about the physical presence test for treaty benefits, especially if you're claiming reduced withholding rates. I created a simple spreadsheet tracking my location each workday just to be safe. Has anyone had luck getting their employer to retroactively apply the correct treaty withholding rate, or do you pretty much have to wait until tax filing to get the difference back?

Don't forget to complete Form 8833 if you're claiming treaty benefits! I made this mistake my first year as a resident alien.

@Ellie Simpson - I went through almost the exact same situation! Also forgot to update my bank after becoming a resident alien and got a 1042-S instead of a 1099-INT. FreeTaxUSA handled it just fine in my experience. When you get to the income section, look for "Foreign Income" or "Other Income" - there should be a specific option for 1042-S forms. Just enter the information exactly as it appears on your form (the $780 interest amount and the income code which is probably "01" for interest). The main thing is NOT to report it as 1099-INT income since they're different forms with different tax implications. Since no tax was withheld, you won't get any withholding credits, but you'll still need to pay regular income tax on the $780. Definitely submit that W-9 to your bank ASAP so you get proper 1099-INT forms next year. Most banks will process the change pretty quickly once you submit the form. One tip: double-check if your home country has a tax treaty with the US that might affect how this income is taxed. Some treaties provide benefits for interest income that could save you money, though you might need additional forms if you claim those benefits.

Just a heads up for anyone considering the dual-status election - if you switched from nonresident to resident alien mid-year like the OP, you might want to look into making the first-year choice election. This allows you to be treated as a resident for the entire tax year instead of having a dual-status year, which can simplify your filing significantly. You'd file Form 1040 with a statement attached explaining your election. The catch is you have to meet certain requirements (like being married to a US citizen or resident) and you'll be taxed on worldwide income for the full year. But it can eliminate the complexity of dealing with the 1042-S in the context of a dual-status return. Not everyone qualifies, but it's worth checking Publication 519 to see if this election makes sense for your situation. Sometimes the simplified filing process is worth potentially paying a bit more in taxes.

One thing I'd add that might help with the TurboTax confusion - when you get to the section about entering your 1042-S, don't panic if the software seems to categorize it strangely at first. The important thing is that you correctly identify yourself as a resident alien at the beginning of the interview process. Also, double-check that you're using the right version of TurboTax. The basic version often doesn't handle international tax situations well. You'll likely need TurboTax Deluxe or Premier to properly handle the 1042-S reporting and any foreign income you might have. If you're still having trouble, consider reaching out to your university's international student services office. Many schools have staff who are familiar with these exact tax situations and can point you toward resources or even provide workshops specifically for students dealing with residency status changes.

One thing nobody has mentioned yet - your wife should check with her bank about their specific policies on international wire transfers. Some banks charge ridiculous fees (my bank takes $45 per incoming international wire), and some may have additional documentation requirements. My husband is Canadian and when he first started sending me money, my bank froze the first transfer for 5 days while they "verified" it, which was super annoying. Might be worth her calling her bank in advance just to understand their specific process.

Just to add another perspective - I'm a US citizen married to a German citizen, and we've been dealing with these international transfers for years. One thing I learned is that your wife should keep documentation not just of the transfers themselves, but also proof of your marriage relationship. We keep copies of our marriage certificate and my husband's ID readily available because banks sometimes ask for this during larger transfers to verify the spousal relationship. Also, if your wife uses online banking, she should expect to see the transfers show up with codes like "OBI" (Originator Beneficiary Information) that might look confusing but are just standard international wire identifiers. The most important thing is that this really is routine - international spousal transfers happen thousands of times daily and the banks are well equipped to handle them properly.

Have you considered whether you might qualify for the Head of Household filing status? It could make a significant difference with three dependents. Also, did you receive any advance Child Tax Credit payments during 2023? Those would need to be reconciled on your return. What about educational expenses for any of your dependents? The American Opportunity Credit or Lifetime Learning Credit might apply.

With $65k and 3 dependents, you might actually be surprised by your tax situation! The Child Tax Credit alone could give you up to $6,000 in credits ($2,000 per qualifying child under 17). Plus, if you're filing as Head of Household, your standard deduction is $20,800 for 2023, which is significantly higher than single filers. A few quick questions that could help your situation: - Are you maxing out any pre-tax retirement contributions? You still have until April 15th to contribute to a Traditional IRA - Did you have proper withholding all year, or did something change mid-year? - Are you paying for childcare? The Child and Dependent Care Credit could provide additional savings Don't panic yet - run through a tax calculator or software to get a clearer picture. You might be in much better shape than you think!