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Another option to consider is asking your university if they offer free tax preparation help for international students. My school partners with a tax service that provides free basic tax prep for students on F-1 and J-1 visas. They have volunteers who are specifically trained on nonresident tax issues. I think the program is called VITA (Volunteer Income Tax Assistance). Worth checking if your university's international student office has something similar!
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.
Quick warning from someone who messed this up last year - if you use standard tax software and incorrectly file as a resident (Form 1040 instead of 1040NR), you might actually get a BIGGER refund than you're entitled to because you'll get tax credits that nonresidents can't claim. It might seem like a win at first, but the IRS eventually caught my mistake and I had to repay the excess refund PLUS interest. It also created a headache when I was applying for a visa extension. Not worth the trouble!
Don't overlook state-level implications too. I'm a personal trainer who competes in fitness competitions, and while I worked out the federal side of deducting competition expenses as business marketing, my state had different rules. Make sure you're considering both!
Good point! Did you find that you needed different documentation for state vs federal? My state seems even pickier than the IRS about business/hobby distinctions.
Yes, I definitely needed more specific documentation for my state return. My state required me to show a more direct connection between competition participation and actual business revenue. I had to keep a log of new clients who mentioned seeing me compete or found me through competition networking. The state auditor also wanted to see that I was treating the activity consistently as a business on all fronts - separate business accounts for these expenses, formal marketing plans including competitions, and proof that I approached competitions differently than a hobbyist would. It was much more detailed than what the federal documentation required.
My friend is a professional disc golfer with small business sponsors and the way his sponsorships work is the businesses pay the tournament fees directly rather than giving him money. He gets the benefit without taxable income and they get the write-off as marketing expense. Maybe set up something similar with your business?
That's a really good idea, I hadn't thought about structuring it that way. So basically my business would directly pay the tournament fees and expenses rather than "giving me money" that I then use for tournaments. That seems cleaner from a documentation standpoint. Is your friend's face/name/image used in the business's marketing materials? I'm trying to figure out if I need to create more separation between "me the artist" and "me the player" for this to work properly.
One thing nobody has mentioned is the difference between trading in a regular brokerage account vs. a tax-advantaged account like a Roth IRA. In a Roth, your gains are completely tax-free (assuming you follow withdrawal rules). Might be worth putting some of your trading capital there if you qualify.
I thought you can't day trade in an IRA because of the limited deposits each year and trading restrictions?
You're right that there are limitations. IRAs have annual contribution limits ($7,000 for 2025 if you're under 50), and you can't use margin or do certain types of options trading. But you absolutely can do active trading within those limitations. Just no pattern day trading using margin, which requires $25,000 minimum equity in regular accounts. Some brokerages also have additional restrictions on IRAs, but the tax benefits can be huge for the trading you can do in there.
Quick tip for the original poster: start keeping a detailed log of all your trades with profits/losses clearly marked. Makes tax time WAY easier. I use a spreadsheet that automatically calculates my running net gain/loss for the year so I know roughly what I'll owe.
Another option: did u do the work yourself or hire contractors? If you hired contractors and have receipts, maybe u can claim some home improvement credit? Check if any expenses were for energy efficiency or security improvements. Some states have specific credits too!
Dealt with this exact situation last year! Here's what I learned: the expenses don't disappear, they just get handled differently. I tracked everything carefully and included it all when filing this year (2023 for me). The key is proper classification - some expenses become part of your basis (like improvements), others might qualify as immediate expenses once actively renting. Don't give up on the deductions!
Giovanni Conti
I just wanted to add something that might be helpful. Make sure you're keeping track of ALL your qualified education expenses. The American Opportunity Credit isn't just for tuition - it also covers required books, supplies, and equipment. My university only reported tuition on my 1098-T, but I was able to add another $950 in textbooks and required lab materials that I paid for out-of-pocket. That increased my credit by almost $240! Just make sure you keep your receipts in case of an audit.
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Fatima Al-Hashimi
ā¢Do digital textbooks and access codes count too? Almost all my "textbooks" are actually digital access codes that my professors require us to buy for online homework systems. Does the IRS consider those qualified expenses for the American Opportunity Credit?
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Giovanni Conti
ā¢Yes, digital textbooks and required access codes absolutely count as qualified education expenses! The IRS doesn't distinguish between physical and digital textbooks as long as they're required for your courses. Those online homework system access codes are specifically mentioned in IRS guidance as qualifying expenses when they're required for your coursework. Just make sure you keep digital receipts or confirmation emails showing your purchases. These expenses can significantly increase your credit amount when they're not included on your 1098-T.
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NeonNova
One thing nobody mentioned yet - there's an income limit for the American Opportunity Credit. For 2024 taxes (filed in 2025), the credit starts phasing out at $80,000 for single filers ($160,000 for married filing jointly) and completely phases out at $90,000 ($180,000 for joint). Since you mentioned making only about $8,500, you're well below the limit, so you should be eligible for the full credit amount assuming you meet all the other requirements!
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Dylan Campbell
ā¢Super helpful info about the income limits! Quick question though - does money received from foreign parents count toward that income limit? OP mentioned getting money from parents abroad, and I'm in a similar situation getting about $15K yearly from my parents in Korea plus my $12K campus job income.
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