That's a good point about the tax treaty - I didn't even think about that angle. Do you know if these tax treaties typically address dependents specifically, or are they more focused on the student's own tax obligations? Also, I've never heard of Form 8843 before. Is that something she would file separately from her regular tax return?

Tax treaties typically focus more on the student's own tax obligations rather than their status as someone else's dependent. The US-Canada tax treaty (Article XX) has provisions that may exempt certain scholarship or fellowship income from US taxation for Canadian students, but it doesn't directly address dependent status. Form 8843 is filed separately if she doesn't need to file a tax return, or alongside her tax return if she does need to file one. All F-1 students must file this form regardless of whether they earned any income, as it's essentially telling the IRS "don't count my days in the US for the substantial presence test because I'm exempt as a student.

Is the Other Dependent credit different from claiming someone as a dependent? I thought they were the same thing.

That's really helpful! Do you know if I can have both a Solo 401k and a SEP IRA for the same business? And does the contribution limit apply across both plans or separately?

You can have both types of plans, but the contribution limits overlap - they're not separate. The total combined employer contributions across all defined contribution plans (401k, SEP IRA, etc.) can't exceed the annual limit ($61,000 for 2022 or $67,500 if you're eligible for catch-up contributions). If you've already made employer contributions to your Solo 401k for 2022, you'd need to subtract those from the maximum SEP IRA contribution you could make. It gets complicated quickly, which is why having a tax pro run the numbers is usually worth it. The key advantage is that you can still set up and fund a SEP IRA now for 2022, whereas the Solo 401k needed to be established by Dec 31, 2022.

I did this last year. C-corps have some advantages for retirement planning (like the ability to create defined benefit plans with much higher contribution limits), but the tax situation gets WAY more complicated. You're looking at potential double taxation issues that can offset the retirement benefits.

Would this work even if the stock is only worth like $200? Seems like a lot of hassle for the charity for such a small amount. And how do you claim the deduction - is it complicated to do on your taxes?

Yes, it works even for smaller amounts! Many charities are set up to handle stock donations of all sizes. While some very small local organizations might not have the infrastructure, most medium to large charities definitely do. For claiming the deduction, it's straightforward if you itemize deductions on Schedule A. You'll get a receipt from the charity showing the donation value (usually the market value on the transfer date). If the stock is worth more than $500, you'll also need to fill out Form 8283, but the form isn't particularly complicated. For very small donations, make sure the tax benefit of itemizing would exceed the standard deduction, otherwise there's no additional tax advantage.

Did you have to pay any fees to sell through Computershare? I heard some transfer agents charge like $25-50 for selling shares which seems ridiculous if the stock isn't worth much.

This is really helpful! How did you calculate the value of housing and food to determine that you provided more than half her support? I'm trying to figure out how to quantify that properly.

For housing, I used the fair rental value of the room she stayed in (looked at comparable rooms for rent in our area) plus a percentage of utilities based on our household size. For food, I tracked grocery expenses for a couple months and calculated her portion based on that. I also included car insurance since we added her to our policy, cell phone costs since she was on our family plan, and medical expenses we covered. For her part of the support equation, I included her earnings from her part-time job, scholarships that covered room and board (not tuition), and any other financial help she received. The IRS has a worksheet in Publication 501 that helps with this calculation. The key is being able to show that your contribution exceeded 50% of her total support from all sources. In our case, the housing value alone was significant enough to clearly demonstrate we provided most of her support.

On TurboTax you should select "Other" when it asks for the relationship. Then when it asks if this person lived with you all year, select "Yes" (assuming they did, or if they were away at college but your home was their main residence). There's also a section where it will ask you to verify that you provided more than half their support.

That's an interesting approach I hadn't considered! About how much do you typically underwithhold? And do you just make equal quarterly payments, or is there some calculation involved? I'm intrigued by the idea of having more control over our money throughout the year.

We typically underwithhold by about 15% of our total expected tax liability. For someone in your situation, that might mean underwithholding by around $30,000 total for the year, or $2,500 monthly that stays in your accounts instead of going to the IRS. The quarterly payments don't have to be equal if your income fluctuates, but we keep it simple and just divide our expected shortfall by 4. The payment due dates are April 15, June 15, September 15, and January 15 of the following year. You can make them online at the IRS website using Direct Pay or EFTPS. Just make sure you're meeting that safe harbor of 110% of your previous year's tax liability (since you're over the $150k AGI threshold). That's the easiest way to guarantee no penalties regardless of this year's actual liability.

I use it all the time and find it really accurate, but it's crucial that you include ALL income sources, not just your W-2 jobs. Make sure you're entering things like investment income, rental properties, etc. The other key is to update it quarterly since your situation might change throughout the year.