Great point! I actually did this for my daughter and they were super helpful. They printed out a detailed breakdown of all her financial aid by semester and explained exactly why they had to make the adjustment. Saved me a lot of guesswork.

That's good to hear! Financial aid offices deal with these forms all the time, so they're usually pretty good at explaining what each box means. One thing I learned is that different schools handle these adjustments differently, so it's always worth checking with your specific school. Sometimes they can even provide documentation that explains the adjustment, which is helpful if you need to file an amended return or if you get questions from the IRS later.

Thanks for mentioning this! We filed last year's return in February, so it sounds like we have plenty of time to figure this out. Would you recommend filing the amendment before working on this year's taxes, or should we finish this year's taxes first and then go back to amend last year's?

I'd generally recommend completing your current year's taxes first, then circling back to the amendment. This way you have a clear picture of your current situation before making changes to past returns. Just make sure to keep good notes about what you need to amend while it's fresh in your mind. Write down the exact adjustment needed and set a reminder to come back to it after tax season. Many people intend to file amendments but forget about it once the immediate tax deadline passes.

I did have a pretty expensive health insurance plan that was coming out pre-tax, plus I was maxing out my 401k that year. Could those really account for almost $95k difference between box 1/5 and box 3 though? That seems like a massive gap!

Health insurance premiums and 401(k) contributions typically reduce your Social Security wages, but $95k is an unusually large difference. Even if you maxed out your 401(k) at the 2018 limit ($18,500 plus any catch-up contributions if you were over 50), and had expensive health insurance (let's say $15,000-20,000 for a premium family plan), that would still only account for maybe $40,000 of the difference. If there's still a $55,000 gap unaccounted for, it's likely there was a reporting error. Another possibility is if you had some deferred compensation or special bonus arrangement that was treated differently for Social Security purposes. Either way, I would definitely contact your former employer for clarification.

Check if you contribute to a 457(b) plan. Those reduce your Social Security wages but not your Medicare wages. My wife works for the state and has this exact situation - big difference between box 3 and boxes 1/5 because of her 457(b) contributions and healthcare FSA.

Thanks for mentioning this! Can you explain more about Form 8843? Does everyone who's a nonresident alien need to file it? And what happens if I should have filed it in previous years but didn't know about it?

Form 8843 is for "Statement for Exempt Individuals and Individuals With a Medical Condition." You need to file it if you're claiming an exemption from the substantial presence test because you're a student, teacher, trainee, or have a medical condition that prevented you from leaving the US. If you're a nonresident alien who doesn't fit those categories, you don't need to file Form 8843. But if you should have filed it in previous years and didn't, you should file it as soon as possible. There's generally no penalty for filing Form 8843 late if you don't owe any taxes, but it's important to get compliant.

This is so true! I was a resident alien federally but NY state considered me a nonresident. Made filing really confusing until I figured it out.

Did you claim any credits like EIC or child tax credit? I heard those automatically delay processing. I'm on day 25 of waiting and getting nervous...

No special credits at all, which is why I was surprised by the delay. Just a totally vanilla return with W-2 income and the standard deduction. From what I've gathered reading online, even the simplest returns seem to be taking longer this year. The IRS apparently prioritizes certain returns with credits for lower-income filers, which is understandable, but it means even simple returns can sit in the queue longer than usual.

Try calling the IRS directly at 1-800-829-1040. I was stuck in "still processing" for almost a month, called them, and found out there was a simple identity verification issue they never bothered to notify me about. After verifying my identity, I got my refund in 9 days.

Wouldn't mailing take forever to process though? I heard the IRS has massive backlogs with paper returns and it could take 6+ months. Would FAFSA accept just a mailing receipt as proof of filing?

Current processing time for paper returns is about 6-8 weeks, not 6 months. That used to be the case during COVID, but they've caught up significantly. Most financial aid offices understand the IRS processing timelines and will accept proof of mailing (certified mail receipt) as temporary documentation while the return processes. You can follow up by ordering a tax transcript once it's processed, which is what they ultimately want to see. Just contact your financial aid office first to confirm this approach works for them - different schools have different policies.

Thanks for bringing this up! I actually looked into this. Even though they weren't required to file based on the income threshold, they had federal taxes withheld from their paychecks. So we're filing to get that refunded - it's about $300 which would help with college expenses. Also, their college financial aid office specifically requested a 2022 tax return or transcript rather than the non-filing statement. Apparently, they've had issues with the non-filing verification process this year.

That makes perfect sense. Getting that $300 back is definitely worth filing for, and if the school specifically wants the return rather than a non-filing statement, you're on the right track. Just as an FYI for future reference, for very low incomes like this, your child might be able to claim "exempt" on their W-4 to avoid having federal tax withheld in the first place. That way they get all their money upfront instead of waiting for a refund. Something to consider for their current job if applicable!