Thanks for breaking that down! My state tax is about 6% and I do have a 5% 401k contribution that's automatic on all my income. When you add it all up, I guess it does get close to that 43%. Do you know if there's any way to adjust withholding specifically for bonuses? Or am I just stuck with this high withholding rate?

Unfortunately, you generally can't adjust withholding specifically for bonuses. The IRS rules for supplemental wages are pretty rigid - employers must withhold at either the flat 22% rate or use the aggregate method. Your best option is to adjust your W-4 withholding on your regular paychecks to compensate if you're consistently getting large bonuses. But be careful not to underwithhold too much or you could face penalties. The IRS withholding calculator can help you find the right balance.

Smart move! Does this work if your company has a separate bonus check? Mine always issues bonuses as a completely separate payment from regular payroll.

Did they help with state taxes too? I heard nonresident aliens sometimes have to file state returns differently than the federal.

Yes, they helped with both federal and state returns. You're right that state filing can be different - some states follow the federal definitions of residency while others have their own rules. In my case, I needed to file as a nonresident for federal purposes but was considered a resident for state tax purposes since I lived there the entire year. The VITA volunteers were trained on both federal and state requirements for international students. Just be aware that these programs usually have income limits (I think around $58,000), but most students fall under that threshold anyway.

Oh no, did you have to file an amended return? How did you fix the situation?

Thanks for the recommendation! Do they cover actual mechanics of how companies use these structures or is it more of a general overview? I'm really trying to understand the nuts and bolts of how these arrangements work.

It does cover specific mechanics - they explain how companies route profits through shell companies using techniques like transfer pricing. They interview former bankers who set up these structures who explain exactly how it works. They use diagrams to show how money flows from high-tax countries through various intermediaries before ending in the Caymans. The documentary also explains the legal frameworks that make it all possible.

Great tip! I just found Apple's subsidiary list in their latest filing and they have at least 3 Cayman entities. The filing doesn't explain what they do though - any idea how to figure that out?

Thanks for explaining this! I'm confused about the "incremental cost" part though. How exactly is that calculated? Does the IRS provide specific comparisons somewhere of EV vs gas vehicle costs?

The incremental cost calculation is indeed one of the more confusing aspects. The IRS hasn't provided an official database of comparisons, which leaves it somewhat open to interpretation. Generally, you'd need to identify a comparable gas-powered vehicle with similar features and capacity, then calculate the price difference. For many passenger vehicles and light trucks, the 30% calculation usually results in an amount exceeding $7,500, so you'll often just get the maximum $7,500 credit. The incremental cost calculation becomes more relevant for specialty commercial vehicles where the EV premium might be less pronounced or for vehicles over 14,000 lbs where the higher credit limit applies.

Did you have to make any modifications to the truck to qualify it as a business vehicle? I've heard some people say you need commercial insurance or special registration for it to count.

Doesn't setting up an S-Corp mean you have to run payroll and deal with a bunch of extra filings though? Is it really worth the hassle?

Yes, with an S-Corp you do need to run payroll (even if it's just for yourself) and there are additional tax forms and requirements. You'll need to file Form 1120-S for the corporation, issue yourself a W-2, and potentially make quarterly payroll tax deposits. The breakeven point varies by situation, but generally if you're making over $80-100K in profit, the self-employment tax savings usually outweigh the extra costs and hassle. I pay about $800/year for payroll services and additional accounting fees, but save around $7,500 in taxes. For me, it's definitely worth it, but everyone's situation is different. It's definitely something to consider once your business is stable, not necessarily right away.

Yessss! This saved me so much trouble. And get a separate credit card for business expenses too. Makes everything so much cleaner come tax time.

Thanks for the credit card tip! I actually have a dedicated business credit card now too, and it makes categorizing expenses so much easier. Most cards even give you year-end summaries by category which is super helpful for Schedule C. Plus you can often get better rewards on business cards for things like office supplies or internet services.