Another option to consider is TaxAct - I used it last year for my 1042-S and it was much more straightforward than FreeTaxUSA. They have a specific section for "Income from foreign sources" where you can directly enter the 1042-S information. Just be aware that the federal withholding shown on your 1042-S is sometimes at a different rate than regular withholding, so double-check those amounts when you enter them. My university withheld at 14% rather than the standard rate because of how fellowships are classified.

I'm an international student advisor and see this issue constantly. For tax residents who've been here 5+ years, here's what you need to know about reporting 1042-S fellowship income: 1) If you're using FreeTaxUSA, report Box 2 amounts under "Other Income" and write "Fellowship" in the description 2) If your fellowship was for research services you actually performed (not just studying), it might be reportable as earned income instead 3) Box 7 of your 1042-S shows the income type code which is crucial for correct reporting 4) Box 10 shows withholding - make sure this gets properly credited on your return Most commercial software struggles with 1042-S. While Glacier is focused on nonresidents, it actually works fine for residents with 1042-S forms too - you just need to indicate your status correctly at setup.

Be aware that you'll need to track these business expenses carefully throughout the year! Im a freelancer and spent hours at tax time trying to figure out which Amazon purchases were business vs personal. Now I use a separate credit card for all business stuff which makes it way easier!

Great question about timing! I went through this exact same situation when I started freelancing. The IRS generally allows you to deduct business expenses as long as they're "ordinary and necessary" for your business, even if purchased before you officially start earning income. The key is being able to demonstrate business intent. Keep documentation showing you were actively preparing to start your business - save emails with potential clients, research you did about setting up your business, any business registration paperwork, etc. This helps establish that your January purchases were legitimate business preparations, not just personal shopping. One tip: consider formally establishing your business entity (LLC, sole proprietorship registration) before making major purchases. This creates a cleaner paper trail and helps establish your business start date for the IRS. Also, if any equipment will have mixed personal/business use, be conservative with your business use percentage estimates and keep detailed logs to support your claims. The fact that you're thinking about this ahead of time shows you're taking the right approach!

My brother was actually stationed at the Amundsen-Scott South Pole Station as an engineer for 14 months back in 2019-2020. He said the tax situation was handled by their employer (a contractor for the national science foundation) and they just used their permanent US address for tax purposes. He never had to select Antarctica as a country code for anything. The whole system is set up to handle the unique situation of Americans working in a place with no actual government. The funniest part was that he was there during the first COVID lockdowns and said it was the only place on Earth that remained completely COVID-free (since no one could come or go during the winter season). Talk about extreme social distancing!

This is such a fascinating thread! I had no idea there were so many people with actual Antarctica work experience. Reading about your brother's experience at the South Pole Station is incredible - I can't even imagine being that isolated, especially during COVID when the rest of the world was in lockdown. It's really interesting how the tax system handles these unique situations where Americans are working in places that technically don't belong to any country. The fact that they just use their permanent US address makes total sense from a practical standpoint. Thanks for sharing that story!

Just a quick tip - make sure you're including any state implications when amending for the missed K-1! I only amended my federal return when I had a similar situation and then got a nasty letter from my state tax agency six months later. Had to file a separate state amendment and pay additional penalties for that.

I went through this exact same situation about two years ago with a K-1 from a small business investment. The stress was real! Here's what I learned from the experience: First, definitely file that amended return sooner rather than later. The IRS matching system is automated and will eventually catch the discrepancy - it's just a matter of when, not if. By filing the amendment proactively, you show good faith and avoid the accuracy-related penalty (which is 20% of the additional tax). Second, gather ALL your tax documents from that year before you start. I made the mistake of just focusing on the K-1 and missed some other deductions I was entitled to. Since you're amending anyway, might as well make sure everything is correct. Third, keep detailed records of everything - copies of the amendment, certified mail receipts if you mail it, etc. The IRS processing times for amendments can be really long (took them 8 months to process mine), and having documentation helps if you need to follow up. One last thing - if the K-1 shows any foreign tax credits or other complex items, consider getting professional help. I tried to do mine myself initially but ended up paying a CPA anyway when I realized I was in over my head with some of the partnership accounting details. Good luck with getting this sorted out!

Does anyone know if there are exceptions to these rules? I'm military and we've rented our house out during deployments. Not sure if the IRS treats military situations differently with the home sale exclusion.

Thanks to everyone who's contributed to this thread - it's been really helpful! I'm in a similar situation to the original poster and was getting confused by the IRS examples too. Based on what I'm reading here, it sounds like the key is whether you establish the property as your primary residence BEFORE renting it out. The IRS basically rewards you for using it as your actual home first, rather than treating it as an investment property from day one. For @Amara Okafor - your situation sounds like you should qualify for the full exclusion since you lived in it for 18 months first before renting it out, and you're back living in it now. The rental period in the middle shouldn't hurt you based on what others are explaining here. One thing I'm still wondering about though - does it matter HOW LONG the rental period was? Like if someone lived in their house for 2 years, then rented it for 10 years, then moved back in for a few months before selling, would they still get the full exclusion as long as they meet the 2-out-of-5 year test at the time of sale?