That's really helpful to hear a real-world example! Did you have to do anything special on your tax return to document the rollover and subsequent withdrawal? And did your 401k plan administrator automatically provide that contribution/earnings breakdown, or did you have to specifically request it?

You'll receive a 1099-R from your 401k provider showing the total distribution, and you'll need to report the rollover on your tax return. For the withdrawal, you'll get a 1099-R from your IRA custodian the following year. I didn't need to file any special forms since my withdrawal was less than my total contributions, but I did keep detailed records of my basis. My plan administrator provided the contribution/earnings breakdown automatically as part of the distribution paperwork. If yours doesn't, definitely request it - you need this documentation to establish your basis. Some administrators have this readily available, while others might require you to specifically ask for a "distribution statement showing contribution and earnings portions.

Wait I'm confused. So if I open my first ever Roth IRA today at age 55, then immediately roll over my Roth 401k that I've had for 20 years, I still have to wait until age 60 to access the earnings tax-free even though I'll be past 59.5?

That's exactly right. The 5-year rule for Roth IRA earnings requires that your first Roth IRA was established at least 5 tax years ago AND you're 59½ or meet another exception (disability, first-time home purchase, etc.). So in your example, if you open your first Roth IRA at 55 and roll over your 20-year Roth 401k, you could access all the contribution portions immediately without tax or penalty. However, for the earnings to come out tax-free, you'd need to wait until both: 1) you're 59½ (which you already are), and 2) it's been 5 tax years since you established your first Roth IRA - so that would be at age 60.

Thanks for this! I had no idea about Form 8843 being required even without income. Do you know if there's a deadline difference for that form compared to the regular tax filing deadline?

The Form 8843 follows the same deadline as your tax return, which is generally April 15th for the previous tax year. However, if you don't have any income to report and are ONLY filing Form 8843 (no 1040-NR needed), then you actually have until June 15th to submit it. Since you mentioned having research assistant income, you'll need to file both Form 8843 and Form 1040-NR by the April 15th deadline (unless you file for an extension). Make sure you keep copies of everything you submit - international student tax records can be important for future visa applications or if you eventually apply for permanent residency.

Most free services don't support Form 1040-NR which international students need to file. I tried FreeTaxUSA last year and had to stop halfway when I realized it wasn't designed for nonresident aliens. Ended up using Sprintax which costs money but handles both federal and state correctly for F1 students.

I hadn't even thought about checking my Social Security statement! Just logged in and interestingly there's no record of that employer or the $78k on my Social Security earnings record. Does that mean it's more likely just an IRS error than actual identity theft? Should I still follow all the identity theft steps everyone mentioned or is there a faster way to resolve this?

If it's not showing up on your Social Security earnings record, that's actually good news! It suggests it's more likely an IRS processing error rather than someone actually using your info to work somewhere. I'd still take precautions like monitoring your credit, but you might be able to resolve this more quickly by calling the IRS and specifically telling them it appears to be a processing error since the income doesn't appear on your Social Security record. Ask to speak with someone in the Wage and Income department rather than Identity Theft. In my case, they were able to remove the incorrect W-2 and release my refund within about 6 weeks of identifying the error. Still frustrating, but faster than the full identity theft resolution process!

Smart advice! But how do you approach a company you've never worked for? I'm dealing with a similar issue and worry they'll just ignore me since I'm not an employee.

Thanks for suggesting this! Do you have any idea how much a CPA typically charges for handling a simple amendment? I'm trying to weigh if the potential refund would be worth the professional fees.

For a relatively straightforward amendment like yours, most CPAs would charge somewhere between $200-500 depending on your location and the complexity of your overall tax situation. If your $3,800 business expense would significantly reduce your self-employment taxes (which can be 15.3% of your net earnings), you could potentially recover $500-700 or more, making the CPA fees worthwhile. Plus, they'll handle all the paperwork and respond to any IRS inquiries, which adds value beyond just the monetary return.

Does anyone know if the free tax filing services like FreeTaxUSA or Credit Karma support e-filing amendments? Or is this only available in the paid versions of software?

Last I checked, FreeTaxUSA does support preparing and e-filing 1040-X amendments, even in their free version for federal returns (though state amendments might have a fee). Credit Karma Tax (now Cash App Taxes) has been a bit behind on amendment e-filing support, but they might have added it by now. One important thing to note is that you can only e-file an amendment if your original return was also e-filed. If you filed by paper originally, you'll need to submit your amendment by paper too.

I did get a state tax refund actually, but it was only around $340, not the $3,750 showing on the form. And I'm pretty sure it's showing in Box 1 which says "unemployment compensation" so I don't think that's it. But thanks for the suggestion, I wouldn't have thought to check that.

If it's definitely showing in Box 1 as unemployment compensation, then you're right, it's not the tax refund. At this point, you need to contact the state agency directly as the others suggested. One other thing to check - look at the form carefully and make sure it's actually from your state's official unemployment agency. There have been some scams where fake 1099-Gs are sent out to trick people into providing personal information.

This is really good advice. My brother had a similar issue in 2023 and the documentation was what saved him. The unemployment office initially denied there was any error until he showed them his complete employment history and bank statements. They eventually fixed it but it took nearly 3 months.

It's unfortunately becoming a common problem. Another tip: pull your free credit report immediately to see if there's any other suspicious activity. Sometimes unemployment fraud is just one part of larger identity theft. You may want to place a fraud alert on your credit file too while sorting this out.